Is VAT chargeable to my UAE customer for intermediary services in the UK?

Forum Categories GENERAL VAT DISCUSSIONS Is VAT chargeable to my UAE customer for intermediary services in the UK?

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    Hi I hope everyone is well and in a position to help.

    I am about to provide services as an independent contractor to a company based in the UAE.  I will invoice them a set amount each month and I will be promoting their products to businesses and developing their business in the UK and Ireland.  Their product is related to packaging and technology. 

    I need to know whether or not I need to charge them VAT?

    I have looked at Notice 741A and don’t find that the answer is clear.

    Section 6.3 says that the B2B general rule is that supply is made where the customer belongs, in my case UAE.
    Section 11.2 says that “B2B intermediary services fall under the B2B general rule and are supplied where the customer belongs.

    But then I find that 15.4 possibly contradicts this by stating “acting as an intermediary in arranging a supply of services within the UK” is not zero-rated.  I find this to be open to interpretation. 

    Thanks in advance for any guidance.

    Trevor S

    Assuming that you’re only supplying your services to the UAE company (and not making supplies direct to the potential customers in the UK / Ireland) the place of supply is in the UAE. This means that it falls completely outside the scope of the UK VAT system – although I don’t know what (if any) obligations you may have in the UAE.

    The second reference you’ve quoted is part of the section on zero rating. The zero rate is technically a rate of VAT, so only needs to be considered for transactions which fall within the scope of the UK VAT system. It therefore doesn’t impact on your supplies.

    For completeness, I think that the zero rating is actually clearer in the legislation than the guidance! It’s here: Essentially what it covers is an intermediary helping a UK business supply services to overseas customers. The intermediary’s services would be subject to VAT were it not for this zero rating, as their customer is based in the UK. 15.4 is effectively pointing out that the zero rating only applies where the intermediary’s UK based customer is supplying their services to an overseas (rather than UK based) customer.


    Just to add that if you require more detailed paid advice, please do not hesitate to contact me here – simply PM on messages.

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