Online business in the United Arab Emirates. VAT amount

10 / 09 / 2020

The e-commerce market in the United Arab Emirates is projected to generate more than $ 9.8 billion in revenue by the end of 2024. Below we will tell you about the amount of VAT if you have an online business in the United Arab Emirates.

5% VAT is imposed on the purchase of goods online, services with a delivery address in the United Arab Emirates, as well as when using the product in the UAE market.

When digital products such as e-books, games, magazines, etc. are consumed in the UAE market or when delivered within the UAE, VAT tax will be charged.

The authorities have defined clear mechanisms for tax procedures for the online business sector, due to the growing importance of this sector.

What services are subject to VAT? Taxable services include advertising on websites, domain acquisition, learning courses, live broadcasts. Also, this list includes services that are provided through mobile applications, websites and other platforms.

This year, the expected revenue from the e-commerce market is $ 5.7 billion. The United Arab Emirates has already become the most developed e-commerce market in the region.

The UAE has a developed digital infrastructure and a legislative environment necessary for quality growth. When doing business online in the UAE, you will be exempt from any other taxes other than VAT. Also, an important advantage is the absence of foreign exchange controls and restrictions on the withdrawal of profits and capital abroad.

Another significant advantage is the possibility of obtaining a resident visa for yourself, employees and family members.

What is the VAT rate for doing online business in the United Arab Emirates?

When providing digital goods in the UAE, the VAT rate is 5%. If the goods are provided outside the UAE, then there is no need to pay VAT.