Is VAT charged on telecommunication services?

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.

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

There are a number of exceptions to the default place of supply rule for services: Where Then the supply takes place …services are supplied by a supplier who …in the recipient’s Implementing State. is resident in one GCC Implementing State to a recipient who is resident in another GCC Implementing State and the recipient is registered for VAT in the second Implementing State… …services are supplied by a supplier who …in the UAE. is resident outside the GCC Implementing States to a business recipient who is resident in the UAE… …services are supplied that relate to …where the services are performed. goods, such as the installation of goods… …there is supply of a means of transport …where the means of transport are to a lessee who is not a taxable person in placed at the disposal of the lessee. the UAE and is not registered for VAT in any GCC Implementing State… …there is a supply of restaurant, hotel, …where the services are performed. and catering services… …there is a supply of any cultural, artistic, …where the services are performed. sporting, educational or similar services… …there is a supply of services related to …where the real estate is located. real estate… …there is a supply of transportation …where the transportation starts. services… …there is a supply of telecommunications …where the use and enjoyment takes services or electronic services… place, to the extent of such use and enjoyment. 7.4. Reverse charge mechanism In certain situations a non-resident supplier of goods or services may be treated as making a supply in the UAE. As a consequence, the non-resident may be required to register for VAT and charge UAE VAT. The “reverse charge mechanism” is a simplification measure to avoid the need for nonresident suppliers who are resident outside the UAE to register for VAT when they make a supply of goods or services in the UAE to registered persons. Where the reverse charge mechanism applies, the non-resident supplier will not charge VAT to the recipient. Instead, the recipient must self-account for the VAT in respect of the goods and services received. This means that the recipient must record the VAT on the acquisition as output tax at the applicable rate in their system and 27 VAT Guide | Taxable Person | VATG001