B2B Cross-Border Services

B2B Cross-Border Services

UAE Business Receiving Services from Abroad

When a UAE-registered business receives services from a non-resident:

• The reverse charge applies.
• The UAE business accounts for output VAT (5%) and input VAT (5%) on the same return.
• The non-resident does not need to register for UAE VAT.

UAE Business Providing Services Abroad

When a UAE business provides services to a recipient outside the GCC implementing states:

• The supply is zero-rated (0%).
• The UAE business can recover input tax on related costs.

Services to GCC Recipients

When a UAE business provides services to a recipient in another GCC implementing state (e.g., Saudi Arabia):

• The place of supply is where the recipient is located.
• If the recipient is registered for VAT in that GCC state, the reverse charge may apply there.
• The UAE supplier may zero-rate the supply if the recipient is registered.

Documentation Requirements

To support zero-rating or reverse charge treatment:

• Obtain the recipient's TRN (or equivalent GCC registration number).
• Maintain evidence that the recipient is located outside the UAE.
• Keep contracts, invoices, and correspondence confirming the cross-border nature of the supply.

Common Pitfalls

1. Failing to account for reverse charge: Missing the output/input entries on the VAT return.
2. Zero-rating domestic services: Incorrectly applying 0% to services consumed in the UAE.
3. Missing documentation: Not retaining evidence of the recipient's location or registration status.