All goods and services, including electronic services, that are bought online are subject to 5 per cent Value Added Tax if the delivery address is in the UAE or if the products are used locally, the Federal Tax Authority (FTA) said on Wednesday.
The FTA provided updated guidance making clear that all "electronic services supplies", including items such as e-books, music, magazines, games, movies and other services delivered digitally are subject to the tax if they are delivered to local accounts or consumed locally.
“In light of the increasing importance of the e-commerce sector, clear mechanisms for procedures have been identified,” FTA director general Khalid Al Bustani said in a statement.
“Value Added Tax, as it relates to the supply of goods and services through electronic means, contributes to supporting the activities of this vital sector … which depends on a locally developed digital and technological infrastructure,” he added.
Other services subject to VAT include the purchase of domain names, website advertising, distance learning courses or live-streamed broadcasts of a range of content including sports, entertainment, cultural, political, artistic and scientific events, the FTA said. This applies to services delivered through websites, mobile apps and other digital platforms.
The UAE is one of the most advanced e-commerce markets in the region. E-commerce revenue is projected to reach $5.7 billion (Dh20.9bn) this year and grow at a compound annual rate of 14.3 per cent to $9.8bn by 2024, according to Statista.
The FTA is keen to apply international best practice when applying VAT, Mr Al Bustani said, adding that the UAE is one of the fastest growing e-commerce markets in the region, “enhanced by the availability of an advanced digital infrastructure and a growth-friendly legislative environment”.
The FTA said that its new guide, which is available on its website, clarifies whether companies or individuals delivering services need to register for VAT or not, and whether such registration is compulsory or voluntary. It also deals with issues surrounding residency and the allowance of taxable expenses.
Did you know?
Brunch has been around, is some form or another, for more than a century. The word was first mentioned in print in an 1895 edition of Hunter’s Weekly, after making the rounds among university students in Britain. The article, entitled Brunch: A Plea, argued the case for a later, more sociable weekend meal. “By eliminating the need to get up early on Sunday, brunch would make life brighter for Saturday night carousers. It would promote human happiness in other ways as well,” the piece read. “It is talk-compelling. It puts you in a good temper, it makes you satisfied with yourself and your fellow beings, it sweeps away the worries and cobwebs of the week.” More than 100 years later, author Guy Beringer’s words still ring true, especially in the UAE, where brunches are often used to mark special, sociable occasions.
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Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
