UAE: Simplified documentation requirements for VAT recovery on imported services
Requirements to account for the output VAT on imported services under the reverse-charge mechanism
The Federal Tax Authority (FTA) in May 2025 issued public clarification number 44, which outlines the requirements to account for the output value added tax (VAT) on imported services under the reverse-charge mechanism and the issuance of related tax invoices, as well as the documentary requirements for recovering input tax in respect of these services.
Based on the clarification, self-tax invoices are not required to be issued by taxpayers provided that an invoice or equivalent document is received from the foreign nonresident suppliers reflecting the details and the consideration paid for the imported services. However, if invoices are not received from the foreign nonresident suppliers, taxpayers will be required to issue self-tax invoices to document the imported services. The clarification further states that when it is impractical to issue self-tax invoices, taxpayers may submit an administrative exception request to the FTA seeking an exemption from this requirement.
Further, input VAT recovery on imported services would be entitled (even where self-tax invoices are not issued) to the extent the imported services are used (or are intended to be used) to make taxable supplies and provided that an invoice or equivalent document is received from the foreign suppliers.
For more information, contact a KPMG tax professional in the UAE:
Keith Donegan | keithdonegan@kpmg.com
Luis Alonso | lalonso1@kpmg.com