Under what conditions is the reverse-charge mechanism applicable on local supply?

For the reverse-charge mechanism to be applicable on local supply, the supplier must:

• Meet the eligibility criteria mentioned below to apply for the domestic reverse-charge mechanism.

  • The applicant is required to be a taxable person.

  • The VAT that is due on the goods or services supplied to the applicant must be completely recoverable by the applicant as input tax.

  • The applicant must provide evidence to prove that the total sum of their intra-GCC supplies and exports exceeds 50% of the total value of their supplies.

  • The applicant must provide credible evidence to show that they would be in a position to owe net tax and that this would impact their financial position.

• Submit an application to the NBR and receive the NBR’s approval