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FTA Issues Public Clarification on implementing Reverse Charge Mechanism on Electronic Devices Among UAE Registrants
Dubai October 26 2023:
The Federal Tax Authority (FTA) and registrants for Value Added Tax (VAT) with the Authority are set to begin implementing a new decision on 30 October 2023, applying the Reverse Charge Mechanism (RCM) on supplies of electronic devices among tax registrants. In this regard FTA released a new Public Clarification on Application of the Reverse Charge Mechanism on Electronic Devices among Registrants in the State for the Purposes of Value Added Tax on its website.
The RCM will result in the liability for Value Added Tax (VAT) on supplies of electronic devices – such as mobile phones, smart phones, computer devices, tablets, and their parts and pieces – to be transferred from the registered supplier to the registered recipient provided they are supplied to a registered recipient for the purpose of being resold or used in manufacturing of electronic devices. The registered recipient will then be responsible for calculating VAT on those supplies, including it in their Tax Return, and meeting specific tax obligations related to these supplies.
The Authority noted that implementing the Mechanism is in line with Cabinet Decision regarding the Application of the Reverse Charge Mechanism (RCM) on Electronic Devices for VAT purposes, which comes into effect on 30 October 2023.