Reverse Charge Mechanism VAT| VAT in UAE- Emiratesca CEO, CA Manu Nair

Learn What is reverse charge mechanism &Place of Supply under UAE VAT, Emirates Chartered Accountants CEO, CA Manu Nair explained in detail in this video. If one is looking for the basic to the advanced concept of the reverse charge mechanism and place of supply, we assure you this is the video for you!

[@syedabbas1101]

Thank you Manu. It was very efficient and useful. Keep going!!!!!!!

[@Emiratescagroup]

Thankyou @syed abbas

[@SURESHKUMAR-wd7mu]

very useful to people who wants to understand UAE VAT, Excellent presentation SIr

[@carvillage2548]

0552405099 VAT Experts & consultants

[@cipviz4418]

It's very helpful for us...but it still works ? Or there is somewhat amendment in this concept?

[@mohanpatel-uw8cn]

you should use marker or pen to show the location of the number you are talking. overall nice explanation.

[@shaban0406]

Thanks Sir for the information....If Slandered rate of supply is less than the goods imported in UAE ..then how to post in VAT 201

[@maduraijabbar]

Dear Mr. Manu Nair, Thanks for your brief explanation, It's very useful for us. 1. my company is car interior modification company, each project take 60 to 90 days to complete, we prepare the invoice once we complete the project, which month is eligible to reimburse the Input vat tax, as per my due date i can reimburse or after invoice prepared (output tax) collection. Awaiting your Kind Advice, Regards, Abdul Jabbar

[@Emiratescagroup]

Dear Abdul, you are not required to issue output tax invoices to claim your input tax.

[@anthonyfernandes9193]

Hi Manu Nair, Thanks for the sharing, it was really helpful. Just a small confusion. As an Environment Consultant Company, when we provide services to GCC countries for example Consulting Services provided for Oman, Saudi Arabia and so on, Do we charge them 5% VAT and if we are importing Services from them do we have to claim VAT. Please advice.

[@ALAMEENKM4556]

If my CRN and TRN are not linked, I should pay the VAT in cash, right?? If it is so, how would I claim the VAT back??

[@mollynazeer9494]

Informative 🙏

[@marqjay]

Does the company has the right for RCM if someone just use its TRN to clear the shipments?

[@travelexplorer77]

Freezone company in UAE, If I develop web technology with the support of an Indian company, that development outsourced charge is Expense or Supplies Revese with VAT applicable ? The end user is based in UAE.

[@nachammain4677]

Hi , I have one doubt we have imported guds from china to uae and supplied those goods to our client in uae amd we have charged vat to them and paid that vat to government but in fta they have charged separately for the import shud i pay that vat or can i reverse it

[@Emiratescagroup]

Hi Nachammai N, from your query we understood that goods were imported to UAE from China in your TRN and hence it got prepopulated in column number 6 of the VAT Return for which RCM is applicable. We recommend you to take the input in column number 10.

[@pankajthakker2608]

Excellent how can I keep getting such lectures

[@maduraijabbar]

Dear Mr. Manu Nair, I have one small question for KSA sales we are doing car interior modification. one of our customer from KSA request us to buy a car and modify the interior and deliver to the KSA. 1. these sale comes under zero-rated tax (Export to KSA) Note: KSA Customer is Individual (Not registered in KSA VAT) Awaiting your Kind Advice. Regards, Abdul Jabbar

[@carvillage2548]

0552405099 VAT Experts & consultants

[@ConsultEase]

Nice Manu ji

[@nsankaranarayanan3672]

We are a construction company registered in Abu Dhabi and do installation services in Abu Dhabi as a subcontractor. The invoice is send to Dubai based company. Please advise where should be the place of supply in this scenario. Thanks

[@Emiratescagroup]

Dear Sir, since the installation happened in Abudhabi, it shall be reported in Abudhabi as per the place of supply provisions of UAE VAT Law.

[@muhammadakbar9049]

Hi. if a company is not registered with vat and imports goods into uae and pay vat at import stage. Later on the company gets itself registered with vat and start selling already imported goods. Can the company claim input vat paid at the time of import in its first vat return filing? Plz guide in which column or sr. # the entry of vat against imports will be made in vat form and would it be aubject to RCM?

[@aldanawystoreswll1831]

Thank you for this video and for all the information. Really a big help. We are based in Abu Dhabi and we have a customer based in a free zone in Dubai, are we supposed to charge him VAT on each invoice?

[@Emiratescagroup]

Dear Sir, if you are in mainland then you have to charge VAT to the freezone customers.

[@aakid12]

XYZ company (based in KSA) is in the business of repairs and maintenance of machinery. A UAE-based company sends it's machine to XYZ company to get repaired, XYZ Company repairs and then returns the machine back to the UAE. What are the tax implications on these types of transactions?

[@sagardhawan9487]

First you have to treat it as export and then import

[@kathikakumara4367]

It is very useful, Thank you

[@pankajthakker2608]

Also do you have full cource on vat

[@hadislibrary1325]

Dear Sir Plz make a video on the same amount of imports for non registered and registered persons etc and show how vat return will be filled for both. Or plz tell me if i file a Vat return as a registered my imports are e.g 206604 custom duty is 10330 Vat is 10846. I dont have sales But expenses are 100000 and vat on expenses is 18670 so can i claim this 10846 with 18670 total becomes 29516. Where i will make an entry for return of 10846 is it will be in adjustment column in Box 9 or 10 of the file . Plz reply me as ASP i shall really be greatfull to you

[@RahulR-cl4lx]

Sir,in case of unregistered importer or Individual,could they get back the paid VAT ?

[@preetimuthreja5161]

Very informative video..thank you

[@sharonjaring]

Hi Sir, thanks for your informative video. What if the imported goods are mentioned as "import for re-export " in the import declaration. And after 6 months it did not re-export. How do we treat this? Will it be automatically pre populated in no. 6 after 6 months.? Thank you in advance.

[@sagardhawan9487]

Hi - for import for re-export you have to file the declaration of customs and then as per the condition you have to re-export it. If this is not done, then you have to manually do the adjustment in the VAT return.

[@panktislifestyle2354]

Can you please guide how vat applicable to inter entity in UAE? Suppose I m UAE based company and my branch is at Canada. Then how to calculate vat for transactions between this two companies?

[@muhammadidrees8466]

Sir, FTA automatic enter the import amount in fta portal.but automatic not go to reverse charge.how we can claim if we have no vat invoice.only we have declaration and auction invoice without vat

[@mhamadshareefshareefk15]

Company is in free zone,buyer outside Uae,consignee inside Uae goods are exported outside Uae, VAT applicable if consignee is inside Uae?

[@manojm5332]

What if I import goods from china to dubai mainland and again re export to Oman which is not implanting state...can I claim RCM on Import?...

[@Emiratescagroup]

Dear Manoj, if your are importing for reexport within 6 months as mentioned in the Bill of Lading then, there is no need to disclose in the RCM. If you are importing only as mentioned in the Bill of Lading, then you can disclose the amount in RCM for goods imported in UAE.

[@manojm5332]

@@Emiratescagroup lets say we exported the import item within 6 months then we have to mention in export colum in that particular quarter...

[@manojm5332]

LizaMe yes u have to pay

[@manojm5332]

LizaMe imports for the purpose of export cannot claim RCM except for local sale... there is adjustment column in 201

[@muhammadidrees8466]

Dear sir.we have one group trn for both dubai and abu dhabi .we r issuing invoices from both companies.main company is in abu dhabi.how we will file vat return

[@007-l7l]

Very usefull

[@yasirahmad7005]

Thanks for great understanding

[@syedabbas1101]

Last qtr we import goods and while filing return we see in FTA portal no 6 the VAT is mentioned 2500.00 AED. We also invoiced the imported goods last qtr and tax collected from customer is 3500.00. In this scenario there will be two entries ,please help us.

[@Emiratescagroup]

Hi Syed Abbas, Any imports made by a registrant through a customs facility with valid documents gets pre populated in column number 6 of the VAT return, further the liability created in column number 6 can be adjusted in column number 10 of the VAT return thereby nullifying the VAT liability. Any further sales should be reported under 5% or 0% sales as the case may in the VAT return.

[@syedabbas1101]

@@Emiratescagroup I read "Any further sales should be reported under 5% or 0% sales " . Any imported materials, is it compulsory should we have to sell in local market claiming 5% VAT ,collect the tax and pay to the government or it is our choice to sell for 0% VAT and leave it there. Our question is who will decide it is 5% or 0% VAT for the imported materials.

[@pulkitrathi252253]

Sir, thanks for this valuable explanation. I have a small doubt if u can help me out for. If supply of goods is done from any other country to GCC (other then implementing state) and for that supplies, supplier is raising invoice to company registered in uae. Then what will be the treatment. Whether it would be out of scope of VAT?

[@NaffarHussainOfficial]

it is out of Scope

[@mahamoodvaniyambalath9460]

Our Factory is located in Abu Dhabi. But we are supplying to Dubai,Sharjah and Abu Dhabi. Is it required to show sales fiqures seprately in the vat return form or total amount only?. I have one more question We used to buy some items without vat. Did we want to show that expense amount in the vat return form or expense with vat only?. Please advise

[@Emiratescagroup]

Dear Sir, kindly note that Emirates wise record should be accounted based on the fixed establishment of the supplier. Since, your fixed establishment is Abu Dhabi, all sales should be accounted in Abu Dhabi Emirate. For more details request you to attend our VAT Return Filing workshop on 28th March. For more details kindly contact Ms. Suravi @ [phone]

[@afraansheik]

Dear sir we have our customer who are based in uae and the terms of trade agreed is FCA.Hence the goods which are purchased are imported from our supplier by the customer in their custom account. As we are also based in Uae we are eligible to collect output tax from our customer hence it is a local sale for us . Kindly please explain the process of RCM in this scenario from the local supplier point of view and also the treatment of RCM from our customers point of view. In this case can our company be treated as service providers based in uae and charge VAT

[@Emiratescagroup]

In this case since the good are imported in your customers custom code and trn number, it will be rcm forthem. Your sales will be out of scope. For more details and support you may please contact our office directly.

[@jajis]

If an agent is importing goods on behalf of customer, VAT should be passed to Customer, so the imported items exported, can we re-claim as output

[@trencherscompany8591]

Hi! The purchase from "Designated Zones" by mainland company is considered in "RCM"? thank you

[@NaffarHussainOfficial]

Yes

[@osamagadhvi8328]

How you can take input twice on Materials imported from overseas? In your example you have treated material imported as standard rated expense and also you take input as reverse charge for the same amount then it means you are taking credit twice for the same transaction?

[@nealmachado3545]

Thank you for clarifying RCM. How do we account for VAT with EURO Exchange purchases ?

[@Emiratescagroup]

In all the cases there will be a declared amount at customs on which 5% (or relevant rate customs duty as applicable). VAT will applicable on customs + declared amount on which 5% will be applicable. This amount will be auto populated in your relevant VAT return period under box 6, your vat liability will be this amount in AED.

[@MrJaiju]

Hi Sir, Our company is located in Abudhabi, and we are exporting goods to Oman by receiving transportation service from a vendor located in Oman. In this case will this transportation service be under UAE reverse charge mechanism?

[@Emiratescagroup]

Dear Mr.Jaiju from this question, we understand that you are availing the transportation service from an Omani company, not registered in the UAE under FTA. It is an import of services. The rate of tax on international transport is 0%. You should show this under RCM. If you have any confusion, feel free to contact our TAX Department.

[@ahmedwaseemleo]

great explanation manu ji

[@FarhanKhan-nl6us]

i want to know about services

[@Siaowerr]

1. we want to export goods to KSA. Do we have to include VAT in our invoices or not? Does it depend on the type of the company in the KSA, i.e. whether it is registered for VAT or not? 2. In case a registered KSA company does not require a Tax Invoice including VAT, whether we are NOT allowed to recover the import TAX for the same articles sold to it.

[@NaffarHussainOfficial]

Untill common electronic System will be implimented your sales to KSA are Exports.

[@shabbiryusuf1460]

Hello Sir, A mainlaind VAT Registered company imports goods from Oman by road. The value of goods received are not populated in Customs as per their online FTA account. Does the company apply reverse charge by stating the value of goods in Box-3 and then negate it in Box-10 Please advise.

[@NaffarHussainOfficial]

Yes

[@muhammedrafi6703]

Thank you sir. great informations

[@ifteqaruddinmohd3104]

How to do Shipping company accounting. Because shipping Company in their Services Invoice Custom Duty So for shipping company Custom Duty is Income or Expense.

[@zakirhussain33]

Why you write v80 for VAT? Is it malayali English?

[@sajitharajesh3656]

Sir, In previously filed return, by mistake, we have shown Zero rated supplies in standard rated supplies. But, VAT was calculated as Zero. So as a result, the VAT entered is not correspondant to the sales shown. Is there any provision to clarify this?

[@Emiratescagroup]

Hi @sajitha Rajesh as per FTA guidelines, rectification is possible only in scenarios where tax is involved. In the current scenario, since there won’t be any tax impact to the return filed, you don’t have an option to edit the same.

[@sajitharajesh3656]

@@Emiratescagroup sir, now we are trying for deregistration as we are closing down the company Activities. So, this error will reflect in the financial statement right?

[@harimuru3]

Company situated outside UAE suppiles software to a company in UAE. These software will be again be invoiced to its customer.How reversal mechanism works?.pls note that purchase of software is by way of email communication.

[@Emiratescagroup]

Dear Murali Krishna, in such a scenario the first transaction between your company and company outside the UAE should be booked under Reverse Charge Mechanism (RCM) and the subsequent transaction with the customer inside the UAE is taxable at 5% and should be classified under Standard Rated Sales.

[@harimuru3]

@@Emiratescagroup Will you be able to assist me on below instance. 1. Software purchase (from non-resident supplier) and date of customer invoice fall under the same tax period. How the entries are passed in the books of account.

[@Emiratescagroup]

@@harimuru3 RCM entry as below: Purchase A/C Dr XXXX Input VAT A/C Dr XXXX Bank/creditors A/C Cr XXXX Output VAT A/C Cr XXXX For more information please contact our TAX Team at [phone]

[@TravelwithSajjan]

Hi What if we received an invoice for a Domain service Like US $ 100 How I will sure it falls under RCM ? Pls Explain

[@Emiratescagroup]

Dear Sir, the place of supply for this service will be based on the actual use or enjoyment of the service. Hence, if we receive service from a company outside UAE & this electronic service is used in UAE it attracts VAT under RCM.

[@TravelwithSajjan]

so RCM Means after watching your video !! the effect will be NULL INPUT & OUTPUT VAT ON 100$ TRANSACTIONS INPUT VAT 5 WILL CANCEL OUTPUT VAT OF $5 ?

[@Emiratescagroup]

Correct.

[@mohdiffu9863]

Sir if a freezone company is purchasing from mainland company and selling it to mainland company without bringing material inside freezone, in this scenario do freezone company need to charge vat?

[@Emiratescagroup]

Dear Sir, yes you have to charge 5% VAT. We provide optimized VAT services in the UAE. For any services please contact 04 250 0290.

[@rdsshahani7257]

I am vacting my office unit after 6 months , since the landord had collected 4 cheques as quaterely rent , he will be returning me the 2 PDC cheques. He had charged 5% VAT on full years rent but now he says he cannot return the balance 6 months VAT as they have already paid in their VAT retuens. I am sure there is a way for me to get this back through issue of a credit by the Landlord but he is not agreeing. Can you help with a step wise illustration to reverse this 6 months VAT so I can forward it to my Landlord. Thanks

[@NaffarHussainOfficial]

He should Issue Credit Note and both can claim back from FTA

[@lijophilip8376]

If a registered company Imports “Zero Rated” goods in KSA from Outside KSA, will the company require to pay VAT (@ RCM) at Custom to release the Goods (which is sold at Zero Rated if purchased from KSA). (sorry for asking Saudi Law here)

[@faisaliqbal7235]

vat is required to pay at the point of import under RCM if it is intended to use in KSA.Input Vat is recoverable against standard rate or zero rate supply made in KSA

[@cell6264]

Thank you for the video. It's very informative. It would be great if you can help me on below scenario (trading of goods) Company A (VAT registered in JAFZA customs bonded area) sold taxable goods to Company B (VAT registered in DMCC Freezone) . Then, Company B sold this taxable goods to Company C (VAT registered in Dubai mainland). The goods will be delivered directly from Company A’s customs bonded area to Company C’s location in the mainland. Company C, will do the customs clearance. 1. Should Company A charge Company B 5% VAT? 2. Should Company B charge Company C 5% VAT? 3. While clearing the goods thru customs, will the reverse charge mechanism still applies even if Company C paid 5% VAT to Company B? If yes, how it will be reported in the VAT return?

[@carvillage2548]

0552405099 VAT Experts & consultants

[@mohdiffu9863]

Dear sir, do i need to pay tax initially and then take input credit? If i just show supplies under rcm in box no 6 and same supplies in box no 10 in vat returns without paying anything- it means indirectly can i consider that no vat is charged on imports. Plz reply sir

[@Emiratescagroup]

The RCM entry in box no 6 and box no 10 is just an entry. Disclosure of VAT amount in box no 6 & 10 would suffice the requirements of law.

[@Emiratescagroup]

Dear Sir, RCM is just an accounting entry where you are not entitled to pay any amount of VAT if settled through TRN. We provide VAT Advisory Services , for any assistance please contact our office 04 250 0290.

[@ikhtiarazam3479]

Dear sir, how to update/amendmend trade license expiry date in FTA portal ?

[@teyavaldez2086]

go to Amendments status then click edit you have to fill up again all required. then re-upload the documents amend

[@specialistsprofessionalsin1331]

For Real Estate Brokerage companies Mr Manu Nair how is the reversal procedures and policies Kindly explain in a video please thanks best regards Altaff Hadi Omar Bhikhba Specialists Professionals Real Estate Brokers

[@antonypylee2658]

how we can enter import purchase from india to uae , how to enter customs duty and ins figures in purchase entry in tally

[@carvillage2548]

0552405099 VAT Experts & consultants

[@thanujanilanthi7323]

Greate

[@mariamvrghs]

could you discuss on the reports needed to be submitted

[@Emiratescagroup]

Hi Mariam, we will be discussing on the above mentioned in our VAT Return Filing Workshop which is scheduled on 21st February 2018. To register kindly call Ms. Suravi at [phone]

[@Emiratescagroup]

We will be releasing another video soon on VAT Return Filing / Reporting requirements. However, in short, in the case of reverse charge VAT liability for the goods imported through UAE customs has to be shown under Box 6 (VAT Return Form 201). VAT liability for services imported from overseas are to be shown under Box 3 and the total VAT amount eligible to take input credit against Box 3 and Box 6 are to be shown under Box 10.

[@smabbas07]

by mistake Vat Charge Sales to Saudi Arabia from UAE but how can reverse vat tax

[@Emiratescagroup]

To reverse the tax wrongly charged, you can issue a Tax Credit Note.

[@suryanair3546]

Is reverse charges applicable for purchase from unregistered supplier from UAE ?

[@Emiratescagroup]

RCM is not applicable for purchases from unregistered supplier from UAE.

[@sridharps104]

nice

[@majeedabdul3640]

Sridhar ps ,Keshav Parab ,kzbin.info/www/bejne/eGOrdqt8paaApM0 watch this for complete solution on additional cost of purchase. Subscribe to get more. It's newly started

[@ifteqaruddinmohd3104]

Under UAE VAT law. plz. reply me.

[@Emiratescagroup]

ok

[@vasihallare]

sir thanks for your video regarding export goods I watched your video I have office in dxb I purchased goods from different supplier in UAE with 5% vat I export to Zimbabwe I have B/L , inspection VAT certificate available(one container) now I want to know reverse mechanism I have wasl leasing property I paid 5% VAT same dxb office name I have trn number as well waiting for reply thanks lot

[@itsmeprava180]

What is kSA means?

[@Emiratescagroup]

Dear Prava, KSA means Kingdom of Saudi Arabia.

[@IMT395]

King of Saudi Arabia

[@mnavidns4915]

KINGDOM OF SAUDIA ARABIA

[@KAN1115]

I coukdn''t understand besauce of prnouncuiation

[@saleemahmad-mk8yg]

sir thanks a lot but urs engllish is too hard to understand

[@millionmilesstory8761]

Too much irritated english accent

[@maduraijabbar]

Dear Mr. Manu Nair, Thanks for your brief explanation, It's very useful for us. 1. my company is car interior modification company, each project take 60 to 90 days to complete, we prepare the invoice once we complete the project, which month is eligible to reimburse the Input vat tax, as per my due date i can reimburse or after invoice prepared (output tax) collection. Awaiting your Kind Advice, Regards, Abdul Jabbar

[@NaffarHussainOfficial]

You can claim VAT when you received the Invoice regardless of that when you will Book output on your sales