Article 66 - Domestic Reverse Charge Mechanism

A. Where the conditions set out in Paragraph D of this Article are met, a Taxable Person who is primarily engaged in making Intra- GCC Supplies or Exports of Goods may submit an application to the Bureau, using a form prepared by the Bureau for this purpose, to use the domestic Reverse Charge Mechanism, on certain purchases of Goods and Services which are subject to Tax at the standard rate.

B. Where the Bureau approves the Taxable Person s application, and after verifying that all of the conditions are met, a certificate shall be issued to the Taxable Person granting him the right to apply the domestic Reverse Charge Mechanism on certain purchases.

C. Where the Taxable Person submits a copy of the certificate issued by the Bureau to a Taxable Person for Supplies of Goods or Services made to him and where all the conditions are met, the following shall apply:

1. The Tax on the Supply of such Goods or Services shall not be calculated by the taxable Supplier.

2. The Taxable Person receiving the Goods or Services shall calculate the Tax due on such Supplies and declare such Tax through his Tax Return.

D. In order to obtain the approval from the Bureau to apply the Reverse Charge Mechanism, the following conditions must be met:

1. The Tax due on the Goods or Services supplied to the Taxable Person shall be fully recoverable by the Taxable Person as Input Tax.

2. The Taxable Person shall demonstrate that the total amount of Intra-GCC Supplies and Exports exceeds 50% of the total value of his Supplies.

3. The Taxable Person shall provide reasonable grounds to the Bureau evidencing that the Net Tax, in accordance with his Tax Return, will be a negative amount on a recurring basis and that the negative amount will have a material impact on his financial position.

E. Where, following the receipt of approval from the Bureau to apply the domestic Reverse Charge Mechanism, one of the conditions set out in Paragraph D ceases to be met, the Taxable Person shall notify the Bureau within thirty days, of the date when he fails to meet any of these conditions. The Bureau shall revoke his approval to use the domestic Reverse Charge Mechanism.

F. In all cases, the Bureau may revoke its approval to allow the Taxable Person to apply the Domestic Reverse Charge Mechanism by a notification issued to the Taxable Person specifying the effective date of the cancellation.