Place of Supply for Goods
Domestic Supply
When goods are located and supplied within the UAE, the place of supply is the UAE — standard-rated VAT (5%) applies.
Export of Goods
When goods are supplied and exported outside the GCC implementing states, the supply is zero-rated (0%), provided the exporter maintains evidence of export:
- Customs export declarations
- Transport receipts
- Proof of delivery outside the GCC
Import of Goods
When goods are imported into the UAE, VAT is due at the point of import. The importer pays import VAT (typically 5% of CIF value + customs duties) to customs.
Under certain conditions, a registered importer may account for import VAT under the reverse charge mechanism rather than paying at customs.
Goods in Designated Zones
Designated zones are specific free zone areas treated as outside the UAE for VAT purposes:
- Supply of goods within a designated zone is generally outside the scope of UAE VAT.
- Supply from a designated zone to the UAE mainland is treated as an import.
- Supply from the mainland to a designated zone may be zero-rated.
Real Estate
The place of supply of real estate is where the property is located. UAE real estate is subject to UAE VAT.
Worked Example
A Jebel Ali Free Zone company sells electronics to a Dubai mainland retailer. This is treated as an import — the mainland retailer accounts for import VAT. If the same company exports to India, the export is zero-rated with proper documentation.