Is VAT charged on telecommunication services?

Answered by FinTaxIQ - TI from the Federal Tax Authority’s own law · 18 October 2026. Guidance, not tax advice: rely on the official text.

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Yes — if the service is used or enjoyed in the UAE, UAE VAT is charged on it. If it is used outside the UAE, it can usually be zero-rated, so no VAT is charged.

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The detail

Telecom services are subject to VAT in the UAE, but only to the extent they are used or enjoyed in the UAE; use and enjoyment determines the place of supply, regardless of where the contract is made or paid. To the extent the service is used outside the UAE, or is an export of a telecom service to a non-resident, it is zero-rated, so no UAE VAT is charged. Whether VAT is charged therefore turns on where the recipient actually uses the service.1 2 3

What the law says

Under Article 31 of the Federal Decree-Law No. 8 of 2017, the place of supply of telecommunications services is in the UAE to the extent of use and enjoyment in the UAE, and outside the UAE to the extent of use and enjoyment outside the UAE, regardless of the place of contract or payment.3
Article 32 of the Executive Regulation zero-rates exports of telecom services: supplies by a UAE-resident telecom supplier to a telecom supplier resident outside the Implementing States, or to a non-telecom supplier resident outside the State where the service is initiated outside the Implementing States.1
The GCC Common VAT Agreement (Article 20) sets the same rule: the place of supply of telecom services is the place of actual use or enjoyment.2

What it depends on

If the service is used (actually consumed) in the UAE, UAE VAT is charged; if used outside the UAE, no VAT is charged on that portion.2 3
To zero-rate an export under Article 32, the recipient must be resident outside the State — either a telecom supplier whose main activity is telecom services, or a non-telecom supplier where the service is initiated outside the Implementing States.1

Check before you rely on it

Check where your customer actually uses or enjoys the telecom service.
Check the customer's place of residence and, for exports, whether they are a telecom supplier or where the service is initiated.

Sources (3) — read the official text

1VAT Executive RegulationArticle 32Executive Regulation

Article 32 – Zero-Rating Exported Telecommunications Services

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Article 32 – Zero-Rating Exported Telecommunications Services 1. The export of telecommunications services shall be subject to the zero rate in the following situations: a. A supply of telecommunications services by a telecommunications supplier who has a Place of Residence in the State to a telecommunications supplier who has Place of Residence outside the Implementing States. b. A supply of telecommunications services by a telecommunications supplier who has a Place of Residence in the State to a Person who is not a telecommunications supplier and who has Place of Residence outside the State for a telecommunications service that is initiated outside the Implementing States. 2. For the purposes of paragraph (b) of Clause 1 of this Article, the place where a supply is initiated shall be identified according to the following: a. The place of the Person who commences the supply. b. If paragraph (a) of this Clause does not apply, the Person who pays in return for the services. c. If paragraphs (a) and (b) of this Clause do not apply, the Person who contracts for the purposes of the supply. 3. For the purposes of this Article, a “telecommunications supplier” means a Person whose main activity is the supply of telecommunications services.

Official PDF, p. 26Captured from the FTA website on 9 Sep 2026
2Common VAT Agreement of the States of the Gulf Cooperation Council…Article 20GCC Agreement

Article (20)

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Article (20) Supply of Wired and Wireless Telecommunication Services and Electronically Supplied Services The place of supply for wired and wireless telecommunication Services and electronically supplied Services shall be the place of actual use of or enjoyment from these Services.

Official PDF, p. 8Captured from the FTA website on 9 Sep 2026
3VAT LawArticle 31Law

Article 31 - Place of Supply of Telecommunication and

Read the article
Article 31 - Place of Supply of Telecommunication and Electronic Services 1. For telecommunications and electronic Services specified in the Executive Regulation of the Decree-Law, the place of supply shall be: a. In the State, to the extent of the use and enjoyment of the supply in the State. b. Outside the State, to the extent of the use and enjoyment of the supply outside the State. 2. The actual use and enjoyment of telecommunications and electronic Services shall be where the Services were actually used regardless of the place of contract or payment. Chapter Three – Place of Residence

Official PDF, p. 18Captured from the FTA website on 9 Sep 2026

Helpful?

Yes — if the service is used or enjoyed in the UAE, UAE VAT is charged on it. If it is used outside the UAE, it can usually be zero-rated, so no VAT is charged.

What the law says:
- Under Article 31 of the Federal Decree-Law No. 8 of 2017, the place of supply of telecommunications services is in the UAE to the extent of use and enjoyment in the UAE, and outside the UAE to the extent of use and enjoyment outside the UAE, regardless of the place of contract or payment. [3]
- Article 32 of the Executive Regulation zero-rates exports of telecom services: supplies by a UAE-resident telecom supplier to a telecom supplier resident outside the Implementing States, or to a non-telecom supplier resident outside the State where the service is initiated outside the Implementing States. [1]
- The GCC Common VAT Agreement (Article 20) sets the same rule: the place of supply of telecom services is the place of actual use or enjoyment. [2]

What it depends on:
- If the service is used (actually consumed) in the UAE, UAE VAT is charged; if used outside the UAE, no VAT is charged on that portion. [2, 3]
- To zero-rate an export under Article 32, the recipient must be resident outside the State — either a telecom supplier whose main activity is telecom services, or a non-telecom supplier where the service is initiated outside the Implementing States. [1]

Check before you rely on it:
- Check where your customer actually uses or enjoys the telecom service.
- Check the customer's place of residence and, for exports, whether they are a telecom supplier or where the service is initiated.

Sources:
1. VAT Executive Regulation — Article 32
2. Common VAT Agreement of the States of the Gulf Cooperation Council… — Article 20
3. VAT Law — Article 31

Written by AI from the FTA sources above and checked before display. Not tax advice or official FTA information - confirm with a tax adviser before you act. Full disclaimer

Is VAT charged on telecommunication services?

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