Navigating the New VAT Landscape for E-Commerce in the UAE: Insights and Assistance from Mavish Global Advisors
Emirate-Specific VAT Reporting: What You Need to Know
As of July 1, the FTA has mandated that resident taxpayers involved in e-commerce report taxable supplies in the emirate where the supply is received, provided the total value of these supplies exceeds 100 million UAE dirham ($27 million) per calendar year. This directive aims to ensure a more equitable distribution of VAT revenue among the emirates and aligns with the global trend of taxing e-commerce supplies based on the location of consumption.
The Role of Cabinet Decision No. 99 of 2022
The introduction of Cabinet Decision No. 99 of 2022 has further refined the VAT landscape, specifying record-keeping requirements for e-commerce transactions. Effective from January 1, businesses engaging in e-commerce are now required to meticulously record transactions, delineating them by the emirate in which each supply is received, once the threshold of 100 million UAE dirham in e-commerce supplies is surpassed.
Understanding E-Commerce Definitions and Thresholds
The FTA defines “e-commerce” broadly, encompassing the sale of goods or services through electronic means, including social media stores and electronic applications. The threshold for the new record-keeping requirement is set at 100 million UAE dirham of e-commerce supplies per calendar year, signaling the need for businesses to closely monitor their online sales figures.
Compliance and Voluntary Disclosures
With the introduction of Federal Decree-Law No. 28 of 2022 on Tax Procedures, the UAE has emphasized the importance of accurate emirate-level reporting. Incorrect reporting can now trigger the requirement for a voluntary disclosure, irrespective of the previously established monetary threshold. This shift highlights the FTA’s focus on precision and transparency in tax reporting.
How Mavish Global Advisors Can Assist
In this evolving VAT landscape, the need for expert guidance cannot be overstated. Mavish Global Advisors is equipped to help businesses adapt to these changes, ensuring compliance with the new e-commerce reporting requirements. Our services include:
Assessment of E-Commerce Activities: We can help determine whether your business meets the criteria for the new e-commerce reporting requirements, including the assessment of the 100 million UAE dirham threshold.
Record-Keeping and Reporting: Our team can assist in establishing the necessary processes for accurate record-keeping and reporting, tailored to the emirate-specific requirements.
Voluntary Disclosures: Should your business need to correct past reporting errors, we can guide you through the process of submitting voluntary disclosures, mitigating the risk of penalties.
Ongoing Compliance: With our comprehensive understanding of UAE VAT regulations, Mavish Global Advisors can ensure that your business remains compliant amidst the ever-changing tax landscape.
Conclusion
The FTA’s focus on emirate-specific VAT reporting for e-commerce transactions marks a significant shift in the UAE’s approach to digital economy taxation. As businesses work to align with these new requirements, the expertise of Mavish Global Advisors can provide the clarity and direction needed to navigate this complex regulatory environment successfully.
For businesses operating in the dynamic field of e-commerce, staying ahead means staying informed and compliant. Let Mavish Global Advisors be your partner in this journey, ensuring that your business not only meets the current requirements but is also poised for future success in the UAE’s digital marketplace.
Disclaimer
This article is for informational and knowledge-sharing purposes only and is not intended to substitute for professional tax, finance, or accounting advice. The views and interpretations are based on the information available at the time of writing. We recommend consulting with a professional advisor for advice specific to your situation.
