PWC Alert

United Arab Emirates
Criteria and conditions for

Electronic Commerce for the
purpose of the amendment to
Emirates’ reporting of VAT
February 2023
In brief
The Minister of State for Financial Affairs issued Ministerial
Decision No. 26 of 2023 on the Criteria and Conditions for
Electronic Commerce for Purposes of Keeping Records of the
Supplies Made (“the Decision”).
In addition, the UAE Federal Tax Authority (“FTA”) published

Public Clarification VATP033 clarifying the amendment to
Emirates’ reporting of VAT.
In detail
On 22 February 2023, the Minister of State for Financial Affairs
issued Ministerial Decision No. 26 of 2023 on the Criteria and
Conditions for Electronic Commerce for Purposes of Keeping
Records of the Supplies Made.
Criteria and Conditions for Electronic Commerce
The Decision sets out the criteria and conditions for electronic
commerce according to the provisions of Clause 5 of Article 72 of
the UAE VAT Executive Regulation which were introduced
following Cabinet Decision No. 99 of 2022 amending the
provisions of Articles 3 and 72 of the UAE VAT Executive
Regulations.
Article 72 requires taxable persons making taxable supplies

through electronic commerce to keep records of the transaction
to prove the Emirate in which the supply is received. We refer to
our previous alert on the amended Article 72 for more details.
The Decision sets out that the supply of goods and services shall
be considered to be an electronic commerce supply via an
Electronic Commerce Medium where all of the following criteria
are conditions are met:
The Decision sets out the criteria A. The goods and services are listed and advertised on an
and conditions for electronic Electronic Commerce Medium;
commerce for the purpose of
B. The goods and services are ordered through the
keeping records of the supplies
Electronic Commerce Medium, regardless of whether the
made.
payment is made online or not;
Effective from 1 July 2023, C. In case of a supply of goods, the goods are delivered to a
taxpayers making taxable location specified by the customer whereby this location is
supplies through electronic not owned by the supplier nor operated by that supplier.
commerce exceeding the D. In case of a supply of services, the services are provided,
threshold of AED 100 million are
or the right to receive the services is granted to the
required to keep records to
prove the Emirate in which the
customer with minimal or no human intervention.
supply is received.
Tax and Legal Services PwC Middle East 2

Criteria and conditions for reporting of taxable
supplies made through electronic commerce
Public Clarification VATP033
The FTA published Public Clarification VATP033 on 24 February 2023 to clarify that the Electronic
Commerce Medium includes a broad range of concepts, such as stores in the metaverse, smart
kiosks, robotic devices, etc.
It furthermore provides examples and clarification on the criteria and conditions stipulated in Article 3
of the Decision and explains which factors should be taken into account to determine in which Emirate
the supply of goods or services must be reported -
● The Emirate in which the services are received, shall be determined in accordance with the
relevant factors (FTA will accept the place of residence of the customer taking precedence
over, for example, billing address or IP address).
● For the supply of goods, the Emirate in which the goods are received, shall be determined by
the location specified by the customer, taking precedence over place of residence, billing
address or IP address.
Undisclosed agent
The Public Clarification clarified that in terms of VAT liability, where the Electronic Commerce Medium
operates as an undisclosed agent, the supplier shall be regarded as supplying the goods or services
to the Electronic Commerce Medium, and the Electronic Commerce Medium shall be regarded as
supplying the same goods or services to the customer. Therefore, the operator of the Electronic
Commerce Medium shall be required to consider the supply to the end customer when determining
the value of taxable supplies made by it through e-commerce.
Incidental supplies
Activities that support online transactions, such as payment systems, logistics for the delivery of
goods and other similar platform services fall within the remit of an electronic commerce supply of
goods provided these ancillary services are provided by the same supplier of the goods. The
principles of supply of more than one component as stipulated in Article 4 of the UAE VAT Executive
Regulations will apply.
The Public Clarification also sets out more details on the calculation of the threshold (100 million AED
of taxable supplies made through electronic commerce), details on the reporting obligations and
timelines.
Tax and Legal Services PwC Middle East 3

The takeaway
Taxpayers who are supplying goods and services through Electronic Commerce Medium should
assess whether they fall within the new Emirates’ reporting mechanism for VAT. In particular, taxable
persons making taxable supplies through Electronic Commerce Medium - and subject to meeting the
threshold of AED 100 million - are now required to assess the changes related to record keeping to
prove the Emirate in which the supply is received and to report the same in the VAT return.
The new Emirates’ reporting mechanism for VAT will imply changes to systems and data collection
and additional requirements to comply with the legislation.
www.pwc.com/me
Let’s talk
For a deeper discussion of how this issue might affect your business, please contact:
Mohammed Yaghmour Chadi Abou-Chakra

Partner, Middle East Tax & Legal Services Partner, Middle East Indirect Tax Network
Leader Leader
+971 (0) 56 406 3384 +966 (0) 56 068 0291
mohammed.yaghmour@pwc.com chadi.abou-chakra@pwc.com
Maher ElAawar Antoni Turczynowicz

Partner, Middle East Indirect Tax and Fiscal Partner, Middle East TLS Managed Services
Policy Leader
+971 (0) 56 216 1109 +971 (0) 54 791 5259
maher.elaawar@pwc.com antoni.a.turczynowicz@pwc.com
Carlos Garcia Marc Collenette

Partner, Middle East Customs and
International Trade Leader Director, Indirect Tax
+971 (0) 56 682 0642 +971 (0) 50 407 2831

c.garcia@pwc.com marc.collenette@pwc.com
Anisa Kanji Bastiaan Moossdorff
Senior Manager, Indirect Tax Senior Manager, Indirect Tax, TMT specialist
+971 (0) 56 682 7121 +971 (0) 50 718 5241

anisa.x.kanji@pwc.com bastiaan.m.moossdorff@pwc.com
©2023 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity.
Please see www.pwc.com/structure for further details. This publication has been prepared for general guidance on matters of interest only, and does
not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice.
No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and,
to the extent permitted by law, PricewaterhouseCoopers, its members, employees and agents do not accept or assume any liability, responsibility or
duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for
any decision based on it.
Thank you
©2023 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal
entity. Please see www.pwc.com/structure for further details. This publication has been prepared for general guidance on matters of
interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without
obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of
the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers, its members, employees and
agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or
refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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United Arab Emirates

Criteria and conditions for

In addition, the UAE Federal Tax Authority (“FTA”) published

Criteria and Conditions for Electronic Commerce

Article 72 requires taxable persons making taxable supplies

Tax and Legal Services PwC Middle East 2

Public Clarification VATP033

Tax and Legal Services PwC Middle East 3

Mohammed Yaghmour Chadi Abou-Chakra

Maher ElAawar Antoni Turczynowicz

Carlos Garcia Marc Collenette

+971 (0) 56 682 0642 +971 (0) 50 407 2831

Anisa Kanji Bastiaan Moossdorff

+971 (0) 56 682 7121 +971 (0) 50 718 5241

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