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Understanding VATP034: Key Takeaways from the FTA’s Latest Clarification on the Reverse Charge Mechanism for Electronic Devices

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In our recent article on the newly introduced Reverse Charge Mechanism applicable to the supplies of Electronic Devices, we highlighted the anticipatory atmosphere surrounding the UAE’s Federal Tax Authority (“FTA”) and its customary issuance of clarifications following new legislative adjustments in the UAE’s tax landscape.

True to its pattern, the FTA has recently responded with its latest Public Clarification VATP034 on October 8, 2023. This clarification sheds light on the application of the reverse charge mechanism on electronic devices among VAT-registrants in the UAE for VAT purposes. In this article, we will delve into the key takeaways from VATP034 for businesses and stakeholders in the region.

This article does not aim to comment on the provisions of Cabinet Decision No. 91 of 2023, as these have already been discussed in our previous Article – “UAE’s Cabinet Subjects Electronic Devices to Domestic Reverse Charge”, and is limited to key takeaways highlighted by the FTA in its Public Clarification VATP034.

Key takeaways

The recently issued public clarification VATP034 provides valuable insights in respect of the application of Cabinet Decision No. 91 of 2023. The most important of these are stated below:

  • “Intention to resell” can only exist where part of the business of the recipient is to trade in such devices. Devices purchased to be re-sold to employees for use in business are not deemed purchased with an intention to re-sell.
  • The scope of Cabinet Decision No. 91 of 2023 is restricted to phones that operate through wireless transmission. Hence, phones operating through physical means such as wire, or fiber optic cables fall outside the scope of Cabinet Decision No. 91 of 2023 and the normal rules of VAT would apply. However, the same does not apply to computer devices, as they would fall within the scope of Cabinet Decision No. 91 of 2023 whether wireless or not.
  • E-readers (other than the commonly known tablets) do not constitute “Electronic Devices” and are hence outside the scope of Cabinet Decision No. 91 of 2023.
  • A supply of electronic devices from the UAE mainland to a VAT designated zone, or a movement of such goods from the UAE mainland to a VAT designated zone, will be subject to the provisions of Cabinet Decision No. 91 of 2023.
  • The two declarations to be provided to the supplier of electronic devices by the recipient may be combined into a single document.


The FTA’s new update, VATP034, provides more information in respect of the tax rules applicable to the supplies of electronic devices in the UAE, therefore aiding businesses in understanding their tax obligations in this regard. Nevertheless, businesses should stay up-to-date, and are recommended to seek legal advice to ensure comprehensive compliance with the effective tax legislation.

This Article is prepared by Mohamed El Baghdady, Head of Tax and Financial Crimes, and Marwan Alnooryani, Senior Tax Associate, at Habib Al Mulla & Partners Law Firm.

Seek Legal Counsel

Our expertise in tax law and regulations allows us to provide clients with effective and accurate tax advice, taking into consideration their unique circumstances and needs. Additionally, our experience and knowledge in handling tax disputes enable us to represent clients in discussions with tax authorities, as well as in court proceedings.

Our track record of successfully resolving tax disputes and helping clients minimize their tax liabilities has likely earned us a reputation as a trusted and reliable tax advisor. Our tax and financial crimes team, led by our Head of Tax and Financial Crimes, Mohamed El Baghdady, has successfully advised and represented clients across various industries, including, but not limited to, consumer goods and retail, services, real estate, oil & gas and banking and finance, before the government authorities, tax tribunals and courts. Our clients have been successful in multiple tax disputes before the committees and courts.

For further information, please contact, Mohamed El Baghdady, Head of Tax and Financial Crimes, on or any of the members of our team.

Mohamed El Khatib

Principal Partner – Head of Disputes

Mohamed ElBaghdady

Senior Associate

Marwan Alnooryani

Senior Associate

Basem Ehab


Kholoud Hafez


The content provided in this article is intended for informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy and completeness of this information, the article does not offer a guarantee or warranty regarding its content. The matters discussed in this article are subject to interpretation, and legal outcomes may vary based on specific facts and circumstances. We recommend that readers seek individual legal counsel before making any decisions based on the information provided. If you require specific legal advice, please contact us directly.

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