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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