Qualifying Registrant for E-commerce VAT in UAE
Businesses in the UAE are seeing big changes because e-commerce keeps growing every year. Online shopping has created more chances for growth but has also brought new tax challenges. The UAE government has set clear VAT rules for businesses that sell goods and services online. The term “Qualifying Registrant” is important in these rules. In this article, I will explain what a Qualifying Registrant means for e-commerce and how to meet the reporting requirements as per UAE VAT law.
What Is a “Qualifying Registrant” for E-commerce in UAE?
A “Qualifying Registrant” is a business or person who sells goods or services through online channels and meets the requirements set by the Federal Tax Authority (FTA). If your total e-commerce supplies in the UAE go over AED 100 million in a year, then you become a Qualifying Registrant. This rule is for businesses with or without a physical office in the UAE. If you reach UAE customers and your sales cross the threshold, you must register as a Qualifying Registrant and follow special VAT rules.
- Any e-commerce business can be a Qualifying Registrant if it sells enough in the UAE.
- Even if you do not have an office in the UAE, your online sales to UAE customers count.
- The AED 100 million threshold is for total supplies in a twelve-month period.
Guidelines for Emirates Reporting under VATP033
In 2023, the FTA published VATP033, which gives more details about reporting VAT for e-commerce supplies. If you’re a Qualifying Registrant, you must know and follow these rules. The FTA says you must split your VAT reports by emirate, depending on where your customers get their goods or services.
Key requirements under VATP033:
- Goods or services must be advertised on an Electronic Commerce Medium (like a website, app, or platform).
- Customers must place orders through that electronic medium, even if payment is not made online.
- For goods, delivery must be to an address that the customer picks (not owned or operated by the supplier).
- For services, the right to use the service must be given to the customer with little or no human help.
If you’re a Qualifying Registrant, you must:
- Track all your online sales by emirate (where each customer is).
- Report those sales in your VAT return, split by emirate.
- Keep good records of each transaction, with details about the customer’s location.
Emirates Reporting: Establishment Rules
The VAT rules also explain how to pick the right emirate for reporting:
- If your business has a fixed place or head office in the UAE, report sales by the emirate where you’re established.
- If you have no fixed office but a “place of establishment,” use that emirate.
- If you have neither, report sales in the emirate where your customer receives the goods or services.
Example:
Let’s say you have a website outside the UAE but sell goods to Dubai, Abu Dhabi, and Sharjah. If you meet the threshold, you must report sales by each emirate in your VAT return.
Why Emirates Reporting Matters
Emirates reporting helps the FTA keep VAT fair for all emirates. It also means the FTA can check if businesses are following the rules. It’s important for all e-commerce sellers to know the emirate-based reporting rules and always keep records, so they don’t run into trouble.
Checklist for Qualifying Registrant VAT Compliance
If you want to stay compliant, here are some important steps to follow:
- Check your online sales every month to see if you’re over the AED 100 million limit.
- Register as a Qualifying Registrant with the FTA if you reach the threshold.
- Use accounting software to keep track of sales by emirate.
- Split VAT returns by emirate, not just total sales.
- Store all order, payment, and delivery records for FTA checks.
Learn about VATP033 and review updates from the FTA often.
How Mubarak Al Ketbi (MAK) Auditing Can Help You
Mubarak Al Ketbi (MAK) Auditing has a team of tax advisors who understand the latest VAT rules in the UAE. We can help e-commerce businesses register as Qualifying Registrants, file VAT returns, and set up their records. If you’re lost in a maze of e-commerce tax rules, don’t worry. We help clients “get their ducks in a row” so your business can grow without tax worries.
- For more information visit our office:
Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates - Or contact/WhatsApp on this number:
+971 50 276 2132
