Page 75 - Focus Group
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of  service  is  narrowed  further.  Let us understand it through  authority, a non-resident will be
        According  to the new clause,  a  some examples.                        considered  as  outside  the  UAE
        person will be considered outside                                       even if they are in UAE for less
        UAE only if his presence in UAE is   Consider a situation that a non-   than a month and not connected
        less  than  a  month  and  at  same   resident supplier files a case in the   to the service received from
        time his stay is not connected      court in the UAE for collecting the   the  UAE.  Hence,  even  when
        with the service provided. Hence    debts from a UAE customer. The      the non-resident person visits
        we need to understand that          non-resident supplier appoints a    the UAE for a short vacation,
        when  a  non-resident  person  is   Lawyer in the UAE to conduct the    entertainment shows, attending
        present  in the state and  such     case. What will be taxability of    conferences, personal parties
        presence in connection with the     the legal service? The important    etc  which  is  for  less  than  30
        service provided from UAE, then     point to be considered will be      days and if not connected to any
        it may not qualify the zero rating   the presence of the non-resident   service received, then it will be
        of  export of service and need to   supplier or his representative. If   considered as outside the UAE.
        be taxed at standard rate. The      they are physically present in the
        conjunction AND used in the         UAE with related to the case, then
        sentence make both conditions       the supply cannot be zero rated
        to be qualified  to  consider a     even though it is provided to a
        person as outside the UAE for       non-resident.
        VAT purpose. Accordingly, where  In the same example discussed,
        the service is provided to a non-   assume that the non-resident or
        resident, the tax treatment will  his representative person comes
        not be zero rated if;               to the UAE to attend a business
                                            conference for a week and is not
         •  The person stays more than a                                         CA Ajil Varghese
            month in the UAE or             related to any discussion on the
                                            case. In that case the employee
         •  His    stay   is   effectively  who visited the UAE for a week
            connected with the service  will still be outside the UAE for       Disclaimer:
            provided even though the  VAT purpose.                              not be treated as opinion and/or advice in any circumstanc-
                                                                                This article and/or write ups and/or any of its content shall
            stay in UAE is less than a                                          es of the author(s) and/ or the Chapter. Reader’s to apply
            month.                          From     the    explanation    or   their best judgement in the best interest of their require-
                                                                                ment and should seek a formal opinion on any issue.
                                            clarification issued by the tax









































              The Institute of Chartered Accountants of India (Dubai) Chapter NPIO           TAX JOURNAL 2020    75
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