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The Federal Tax Authority stressed the need to adhere to the accuracy of the value-added tax declaration on an emirate basis in relation to electronic commerce.
The authority stated that the recent updates to the value-added tax legislation in the UAE, specifically with regard to the declaration of e-commerce supplies in the value-added tax returns, entail additional obligations on a number of people when preparing their tax returns.
Accurate evaluation
The authority stressed the importance of businesses carefully evaluating whether they fall under the new obligations, noting that failure to comply with the updated declaration obligations, and even complying with them when doing so is not required, may lead to tax errors and fines.
And she indicated that, starting from July 1, 2023, through the declaration of value-added tax for the first tax period that began on or after that date, those who are called “eligible registrants” must declare supplies that were made via electronic commerce in box 1 of the value-added tax declaration on the basis of the Emirate in which the supply of Goods or Services is received by the Customer, and the retention of relevant supporting evidence, and if the Taxable Person is not eligible registered, or if the supply is not an electronic commerce supply, then in general, Taxable Persons must report their supplies in the Emirate in which In which the fixed establishment related to the supplies made is located.
Legislation and clarifications
The Authority called on taxpayers to review the relevant legislation and clarifications provided by the Authority, before submitting the next value-added tax returns, to ascertain whether:
1. They made supplies via electronic commerce in the calendar year that ended December 31, 2022.
2. Whether the value of the supplies they made through electronic commerce in the previous calendar year exceeded 100 million dirhams.
The authority stated that to help taxpayers prepare and submit a value-added tax return correctly, the taxable person will be asked, via the Emirates Tax platform for digital services, to answer two questions to confirm whether he is registered or not, according to the new procedures for submitting tax returns related to trade supplies. Electronic verification, as this verification contributes to submitting correct declarations, avoiding making mistakes that must be corrected later, as well as avoiding paying fines.
