On 8 ,October, 2023, the UAE FTA released VAT Public Clarification (VATP034). This clarification pertains to the Reverse Charge Mechanism (“RCM”) on Electronic Devices for VAT-registered entities in the UAE, as introduced by Cabinet Decision No. 91 of 2023. The Ministerial Decision No. 262 of 2023 was issued on 25 October 2023 and according to Article 3 of this decision “Components” are considered related to Electronic Devices if they meet any of the following conditions:
- The Components are used for the manufacturing or production of Electronic Devices. The Components should also be considered necessary for the normal operation of the Electronic Devices.
- The Components are not normally used for the manufacturing or production of Electronic Devices but are necessary for the operation, such as chargers, power cords, battery packs, and other similar parts.
- The Components are replacements for the Components that meet the above two conditions.
This type of goods are subject to the RCM. Furthermore, the changes are effective from 30 October 2023.