Export of Service’s 

VAT Decree Law defines Export of Service as “provision of Services to a Person whose Place of Establishment or Fixed Establishment is outside the State” Article (31) of the Executive Regulations of VAT Decree Law on Zero rating Export of services provides for the cases when Export of services shall be Zero rated.

That means, for any service to be zero rated it must first qualify under the definition of Export of service and only then it must be considered for Zero rating under the provisions of Article 31.

Example: PQR LLC (located in UAE) appoints ABC LLC (registered for VAT in UAE) to conduct a market survey for its products in Africa.

Analysis: In this example, one may state that since the services are performed in outside UAE (Africa) as per Article 31 it is export of services and should be zero rated. However, that may not be the case. Here, first we need to understand that these services are provided to an entity having a place of establishment in UAE thus, as per the definition of Export of services, it cannot qualify as Export of services.

If the service cannot qualify as Export of services, the question of zero rating the same under the provisions of Article 31 does not arise.

To conclude, if the Recipient of services is located in UAE and services are performed outside UAE it may not qualify as export of services and may not be zero rated except for in cases where the Place of supply itself is outside UAE (in those cases the supply shall be considered as Out of

We hope businesses have taken into consideration the above factors before zero rating any export of services.

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Chartered House Tax Consultancy

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