A business with no establishment in the UAE that makes taxable supplies in the UAE must generally register for VAT from its first supply. The AED 375,000 threshold that protects small local businesses does not apply to it. The main exception is when the UAE customer is registered and accounts for the VAT itself under the reverse charge.
Who counts as a non-resident
For VAT, a non-resident is a person with no place of establishment and no fixed establishment in the UAE. A foreign company with a UAE branch, office or regular presence is treated as resident for this purpose. A foreign company that only ships goods in or provides services remotely is not.
No threshold for non-residents
Resident businesses register once taxable supplies pass AED 375,000. A non-resident that makes taxable supplies in the UAE must register regardless of value. The reasoning is that the threshold exists to relieve small domestic businesses, and a foreign business that charges UAE VAT has no equivalent need. Compare the resident rules.
The reverse charge exception
Where a non-resident supplies goods or services to a UAE business that is registered for VAT, the customer often accounts for the VAT instead. The supplier invoices without UAE VAT and the customer records the tax as both output and input. If every UAE supply falls into this category, the non-resident has no registration duty. See the reverse charge mechanism and VAT accounting entries for how the customer posts it.
The exception does not work for sales to consumers or unregistered businesses. There is nobody who can account for the tax, so the supplier must register and charge it.
Place of supply decides everything
Whether a supply is made in the UAE depends on place-of-supply rules. Goods in the UAE at the time of supply are generally supplied in the UAE. Services follow rules based on the customer's or the supplier's location and on the nature of the service. A non-resident should map each type of sale to a place of supply before deciding it has no duty to register.
How to register
- Confirm the duty. Map UAE sales to place of supply and customer type.
- Prepare documents. Foreign incorporation documents, passport copies of the owners, proof of the business activity and address, and a business bank account.
- Apply through EmaraTax. Set up an account, complete the registration form and upload the documents. See documents required for VAT registration.
- Receive a TRN and start charging VAT on invoices. See the TRN guide.
- File returns on the assigned cycle. See VAT return due dates.
A non-resident without a local presence often uses a UAE-based adviser or representative for the application and for correspondence with the FTA.
After registration
A registered non-resident has the same duties as a resident: tax invoices, returns, payment and records. It also has the same penalties; see VAT penalties in the UAE. Where input VAT exceeds output, a refund is possible; see how to claim a VAT refund.
Typical mistakes
- Assuming the AED 375,000 threshold applies.
- Assuming reverse charge covers sales to consumers.
- Waiting for the FTA to ask. The FTA can register a non-resident from the date it started supplying.
If you sell into the UAE from abroad, our VAT registration team can map your supplies, advise whether you must register and prepare the application.
A worked example
A software company in another country sells subscriptions to UAE customers.
| Customer | Treatment of the sale | Registration duty |
|---|---|---|
| A VAT-registered UAE business | Reverse charge: the customer accounts for the VAT | None for this sale |
| A UAE individual or unregistered business | The supplier must charge UAE VAT where the supply is made in the UAE | Registration needed |
The same company is therefore exempt from registration if all its UAE customers are VAT-registered businesses, and required to register as soon as it supplies one consumer in the UAE. This is why a customer list is the first document to review.
Invoicing as a non-resident
Once registered, the non-resident issues UAE tax invoices showing its TRN and the VAT. A mix of registered and unregistered customers means two invoice types: reverse-charge invoices for registered customers and standard-rated invoices for the rest. The content of a valid invoice is set out in tax invoice requirements.
Recovering UAE VAT on costs
A registered non-resident can recover UAE input VAT incurred on its business costs, such as warehousing or local services, subject to the usual conditions. A non-resident that is not required to register and incurs UAE VAT on costs has a separate route to claim it back. The route has its own conditions and deadlines, so check them with an adviser before incurring significant cost.
Leaving the UAE market
A non-resident that stops supplying in the UAE should deregister. Failing to do so leaves filing duties and penalties running. See VAT deregistration.
If you are not sure whether you are resident
The distinction turns on whether you have a place of establishment or a fixed establishment in the UAE. A fixed establishment is a place from which business is carried on with a sufficient degree of permanence, such as an office with staff or a warehouse. A single visit, a trade show or a short project usually does not create one, but a long-term local presence can. A non-resident with a local office should assess the position carefully, because a fixed establishment brings the threshold rules back into play.
The cost of getting it wrong
A non-resident that should have registered and did not faces the same exposure as a resident: the late registration penalty, VAT on past sales that it did not charge and interest-type charges on late payment. Because customers were never charged VAT, the supplier typically absorbs the amount, which can be a large share of margin. See VAT penalties in the UAE.
Frequently asked questions
Yes, if it makes taxable supplies in the UAE and has no establishment here, unless the UAE customer is registered and accounts for the VAT under the reverse charge.
No. The AED 375,000 threshold applies to residents. A non-resident that makes taxable supplies in the UAE must register regardless of value.
The UAE customer, if VAT-registered, accounts for the VAT on the supply instead of the supplier, so the supplier invoices without UAE VAT and has no duty to register for that supply.
Yes. Registration is online through EmaraTax. Many non-residents use a UAE adviser or representative for the application and FTA correspondence.
Foreign incorporation documents, passport copies of the owners, proof of business activity and address, and details of a business bank account.
The FTA can register it from the date it began supplying, and VAT becomes due on past sales, together with the late registration penalty.