Website Last updated:

May 15, 2026

This Public Clarification, VATP034, details the application of Cabinet Decision No. 91 of 2023, introducing a mandatory VAT reverse charge mechanism for supplies of specific Electronic Devices between VAT-registered businesses in the UAE. The mechanism applies when the recipient intends to resell the devices or use them in manufacturing. It clarifies that the recipient, not the supplier, is responsible for accounting for the Due Tax. For this treatment to apply, the recipient must provide written declarations to the supplier confirming their VAT registration and intent. Failure to comply results in the supplier charging standard VAT.

VATP034

VAT Public Clarification

Application of the Reverse Charge Mechanism on Electronic Devices among Registrants in the State for the purposes of Value Added Tax

Issue

Cabinet Decision No. 91 of 2023 on the Application of Reverse Charge Mechanism on Electronic Devices among Registrants in the State for the purposes of Value Added Tax ("Cabinet Decision No. 91") has introduced a distinct VAT treatment for certain supplies that relate to Electronic Devices and requires both recipient and supplier to implement a number of compliance requirements.

This Public Clarification intends to clarify the purpose of the updates in the legislation, the goods in scope and the practical implications of the compliance requirements introduced.

Summary

Registrants supplying Electronic Devices to other registrants who intend to use these Electronic Devices for resale or manufacturing, will not account for VAT on such supplies, and Due Tax on the supplies will be accounted for under a reverse charge by the Recipient of Goods (“Recipient”). If the requirements specified in Cabinet Decision No. 91 are not met, the default rule of the supplier accounting for VAT would apply but this could result in the recipient not being able to recover input tax under Article 54(1) of the Federal Decree- Law No 8 of 2017 on Value Added Tax (“Decree- Law').

Cabinet Decision No. 91 was issued under the mandate provided by Article 48(8) of the Decree- Law.

Detailed Analysis

Scope of Transactions - For resale or to use in production or manufacturing

Transactions will only fall within the scope of Cabinet Decision No. 91 if the intention of the Recipient of the Electronic Devices was to resell these Electronic Devices or use them in producing or manufacturing Electronic Devices.

“Resell” is to be understood as being a part of the Business of the Recipient of the Electronic Devices to trade in such devices. The resale by the Recipient of the Electronic Devices can be at a wholesale or retail level.

A Recipient who is acquiring the Electronic Devices for use in his business, other than for production or manufacturing, has no “intention to resell”. This is, for example, the case for the purchase of smartphones who then will be distributed, for professional use, amongst employees, even if the employees are being charged for the receipt or use of the smartphones.