1 July 2026 · Imported services
Reverse Charge on Imported Services
When a UAE VAT-registered business buys services from a supplier outside the UAE, the reverse charge mechanism (RCM) usually applies: instead of the foreign supplier charging VAT, you self-account for it — declaring both the output VAT and (where recoverable) the input VAT in your own return. Done correctly it is often VAT-neutral, but it must still be reported.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
Buying services from abroad
RCM shifts the VAT accounting to the UAE recipient.
- You are VAT-registered in the UAE.
- You buy services from a supplier outside the UAE.
- You self-account for the VAT rather than the supplier charging it.
- You declare output VAT and recover input VAT where allowed.
Keep it compliant
Neutral does not mean ignorable.
- Identify cross-border service purchases in your records.
- Apply the correct value and rate.
- Report on both sides of the return.
- Keep supplier invoices and import documentation.
Related guides
Frequently Asked Questions
For businesses buying services from overseas suppliers.
What is the reverse charge mechanism?
A rule where the UAE recipient of certain supplies self-accounts for VAT instead of the supplier charging it — common on imported services.
Is reverse charge VAT a real cost?
Often it is VAT-neutral, because you declare output VAT and recover the same input VAT — but only if the input is recoverable and reported correctly.
Do I still report it if it nets to zero?
Yes. The transaction must be reported on both sides of your VAT return even when neutral.
Can Exiloz handle our reverse charge accounting?
Yes. We identify RCM transactions and report them correctly in your VAT return.
Handle imported-services VAT correctly
Exiloz identifies and reports your reverse charge transactions accurately.