A taxable supply is defined in the VAT legislation as a “supply of goods or services for a consideration by a person conducting business in the UAE and does not include an exempt supply”.

The following conditions would generally need to be met for taxable supply:

  • there needs to be a supply of goods or services;
  • the supply has to be for consideration; and
  • the supply has to be made by the person who is conducting business in the UAE.

Taxable supplies may either be subject to

  • the standard rate or
  • zero rate of VAT.

Exempt supply cannot be a taxable supply.

A supply can be either taxable or exempt. If the supply is neither exempt or taxable, it will be outside the scope of UAE VAT.

It is necessary to establish whether a person is supplying goods or services.

  • a supply will be of goods if there is a transfer of the ownership of any property or assets or the transfer or granting of the right to use the property or assets as the owner.
  • Some supplies are expressly treated in the legislation as a supply of goods – for example, a supply of water, energy or real estate will be treated as a supply of goods.
  • A supply of services is the supply of anything other than a supply of goods.

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The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn't constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn't accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information's provided herein above.

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