As per Article 2 of the VAT Decree Law, “VAT shall be imposed on every taxable supply and deemed supply made by a taxable person and import of concerned goods into the UAE”.
The term “taxable supply” is defined in the VAT Decree Law as “a supply of goods or services for a consideration by a person conducting business in the UAE and does not include exempt supply.”
Article 30 (3) of the VAT Decree Law states that for the supply of services related to goods, such as installation of goods supplied by others, the place of supply shall be where said services were performed.
Article 31 of the Executive Regulations states that the export of services shall be zero-rated in the following cases:
“a. If the following conditions are met:
1. The services are supplied to a recipient of services who does not have a place of residence in the State and who is outside the State at the time the services are performed
2. The services are not supplied directly in connection with real estate situated in the State or any improvement to the real estate or directly in connection with moveable personal assets situated in the State at the time the services are performed.”
Referring to above, repair or refurbishment services provided by UAE Company in relation to the Goods/ machines located in the UAE cannot be considered as zero-rated export of services as these services are supplied directly in connection with the moveable personal assets (i.e. the machines ) situated in the UAE at the time the services are performed.
Note that the word " moveable personal assets " is to be construed as "moveable assets" .
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