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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