The UAE’s FTA has clarified the VAT treatment of imported services in Public Clarification VATP044, confirming that taxable persons must account for output tax on such services and may recover input tax if conditions are met.
The UAE Federal Tax Authority (FTA) issued VAT Public Clarification VATP044 on 26 May 2025, which addresses the VAT treatment of services received by taxable persons in the UAE from suppliers located outside the country, where the place of supply is considered to be within the UAE.
Taxable persons who import such services (“Concerned Services”) are treated as making taxable supplies to themselves, unless the services would have been exempt if supplied within the UAE.
A VAT-registered recipient of the Concerned Service (“Recipient”) is required to account for output tax on the service and to issue a tax invoice to themselves, unless they have obtained an administrative exception from the FTA relieving them of this requirement.
The Recipient may recover the related input tax to the extent that the Concerned Service was acquired for the purpose of making taxable supplies, provided the Recipient is VAT-registered and retains the necessary supporting documentation, such as the supplier’s invoice.
