Place of Supply - Clauses
Pls ignore my previous Query
We have a contract with the following details:
Seller - Located in UAE
Buyer - Located in UAE
Delivery - FCA Sellers workshop (located in UAE) Containerised, to be loaded on Truck
Final Destination - Russia
Since the buyer has a disagreement on VAT arguing the case as an export (which we dont agree as for seller it is subject to tax and the buyer should claim a refund), could any one please refer the related clause numbers in FTA law:
1) Regarding the place of supply
2) Since buyer located in UAE (even though the final destination is Russia and the end buyer will be a third party)
Request advise on the export documentation as well. Is it OK we prepare export documentation with seller as shipper and consignee either the buyer or his representative? In such cases, the buyer can claim refund or not using the same set of customs documents?
Tks,
Saddik
Replies
As per the sale terms the title of the goods gets transferred to the buyer in UAE itself. So would recommend to charge VAT, buyer can have the export documents prepared under their name itself to claim Zero rating and recover the input charged by the seller. if sale term is FCA UAE then ideally the responsibility of the seller ends there and further export of goods would be the buyers responsibility. The fact that buyer intends to export the goods does not permit the seller to apply zero rating. The argument of the buyer that seller should not charge VAT does not have any justification and is merely a tool to avoid cash flow. The seller faces a higher risk if VAT not charged.
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Hi, Further to above, can you pls advise the documentation part? Our understanding is as follows: Since the delivery is FCA UAE, we need to prepare Just a delivery note to support our sale which is @5%. In order to claim refund/zero rated sales, the shipper for export documentation has to be our customer located in Abudhabi. Could you pls confirm that the above is correct? Thank you
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