According to the UAE Federal Tax Authority’s (FTA) E-Commerce VAT Guide (VATGEC1), foreign companies that offer electronic or remote services to individuals or non-VAT-registered businesses in the UAE are required to register for VAT and account for it directly.
Key VAT Requirements for Non-Resident Service Providers:
- VAT Registration Is Mandatory for B2C Services
- The Reverse Charge Mechanism Does Not Apply in B2C Transactions
When VAT Registration May Not Be Required
- Supplying Services to VAT-Registered UAE Companies (B2B)
- KHDA-Approved Online Educational Services
Consequences of Non-Compliance:
- Foreign suppliers who delay VAT registration may face serious financial exposure:
- AED 10,000 fine for late VAT registration
Source: zawya.com
