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We are RAKEZ registered company providing consulatancy services to an organisation in KSA. However, the billing for this needs to be done to a Dubai mainland entity and payment is recieved from this entity. Does this transaction attract VAT? 

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Muhamed Ashique24/06/2022 04:17:46

Opinion: The question did not give clarity on the relationship of KSA and Dubai Mainland Entity. However, i am of the opinion that to treat a service as zero rated, the following two condition needs to be fulfilled. 1. Place of Residents of recipient should not be in UAE and 2.During the supply of service recipient should not have presence in UAE. To check if the recipient has place of residence in UAE apart from considering the Place of Establishment Test & Fixed Establishment Test, you should also consider: 1. which establishment will receive the invoice and make payment for the supply; 2. which establishment is the contractual recipient of the supply; 3. which establishment is actually benefiting from the supply; etc So, for the supply of consultation service provided to KSA based client, the place of residence will be U.A.E since it is invoiced to, and payment is collected from UAE based entity preventing to treat the supply as zero rate supply

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