- The Federal Tax Authority (FTA) in the UAE has issued a Cabinet Decision on the applicability of the Reverse Charge Mechanism (RCM) on supplies of electronic devices.
- The decision defines electronic devices as mobile phones, smart phones, computer devices, tablets, and their parts.
- The RCM applies to electronic devices supplied to a UAE VAT registered recipient of goods, who will either resell the devices or use them in producing or manufacturing electronic devices.
- The recipient of goods is responsible for submitting a written declaration stating their intention to resell or use the devices in production or manufacturing, as well as confirming their UAE VAT registration.
- The supplier of the devices must receive and keep the recipient’s declaration and verify their UAE VAT registration.
- If the recipient does not submit the declaration, they will be liable to pay VAT, and the supplier should charge VAT to them.
- The Minister of Finance will issue a decision specifying the criteria for determining the pieces and parts related to electronic devices.
- The decision will be applicable 60 days from the date of publishing in the official gazette (30 August 2023).
- The introduction of the RCM for electronic devices aims to curb VAT fraud and ease cash flow requirements for businesses in the industry. Businesses dealing with electronic devices should carefully examine the applicability of the RCM.
Source: pkfuae.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
