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Frequently Asked Questions on VAT

Last updated on 17 August, 2018


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Why is the reverse charge mechanism needed?

When the seller does not have a business in the UAE, tracking them is hard for the tax authorities. In order to track these imported supplies and suppliers, the buyers in the UAE are made responsible for paying VAT on a reverse charge basis. This helps the FTA ensure the collection of VAT in cases where the suppliers are non-residents and do not have fixed establishments in the UAE, though the supply is made in the UAE. 

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