When can I zero-rate a service to an overseas client?

Broadly, when the recipient has no place of residence in the UAE, is outside the UAE when the service is performed, and enjoys the benefit outside the UAE — subject to the specific conditions and exceptions in the VAT law (real-estate and certain other services are treated differently). HelloBooks records the residence and place-of-enjoyment facts on the engagement so the zero-rating is evidenced.

What is the reverse charge on services I buy from abroad?

When you buy a service from a supplier outside the UAE (software subscriptions, overseas subcontractors, foreign advisers), you self-account for the VAT under the reverse charge: declare output VAT and recover it as input VAT in the same VAT 201. HelloBooks posts both sides automatically on a bill flagged as a cross-border service.

Can HelloBooks handle project and retainer billing with the right tax point?

Yes. It supports retainer schedules, milestone invoices and time-based billing, and tracks the VAT tax point (earlier of invoice, payment, or due date) per document so output VAT falls in the correct return period even when cash and delivery are in different quarters.

United Arab Emirates · Professional services

Accounting software for UAE professional-services firms

Place-of-supply rules for cross-border services, zero-rating for exported services, retainer and project billing, multi-currency invoicing, and the FTA VAT 201 — for UAE consultancies, agencies and advisory firms.

United Arab EmiratesLast updated: 2026-07-10

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The short answer

For UAE professional-services firms — consultancies, agencies, law and advisory practices — the hard VAT question is rarely the rate; it is the place of supply. A service to a UAE client is standard-rated at 5%. A service to a client with no UAE presence, consumed outside the UAE, can be zero-rated. Getting that wrong in either direction is costly: charge 5% you didn't owe and you upset the client; zero-rate a supply you should have taxed and the FTA assesses the 5% plus penalties. HelloBooks makes the place-of-supply decision explicit on every invoice and prepares the VAT 201 accordingly.

The facts

UAE professional services at a glance

Field	Value
Authority	Federal Tax Authority (FTA) Services follow the general and special place-of-supply rules in the VAT law.
Services to UAE clients	5% VAT Standard-rated.
Exported services	Zero-rated (0%) Conditions on recipient residence and place of enjoyment apply.
Cross-border purchased services	Reverse charge Self-accounted when buying services from abroad.
Billing models	Retainer, milestone, time-based Tax point follows the earlier of invoice or payment.
Registration threshold	AED 375,000 mandatory Voluntary from AED 187,500.

Rates and thresholds verified against the UAE Federal Tax Authority (FTA) as at 2026-07-10. Re-verify after any Cabinet Decision that amends the VAT executive regulations.

Place of supply — the decision that sets the rate

The default rule is that a service is supplied where the supplier belongs, so a UAE firm's services are UAE-supplied and standard-rated at 5%. But exported services — broadly, services to a recipient who has no place of residence in the UAE and is outside the UAE when the service is performed, where the benefit is enjoyed outside the UAE — can be zero-rated. Special rules override the default for real-estate, telecommunications, and certain other services.

HelloBooks records the client's residence and the place of enjoyment on the engagement, applies the resulting VAT treatment to every invoice raised against it, and flags any zero-rated export of services for review — so the position is documented, not assumed.

Retainers, milestones and the tax point

Professional firms bill in ways that complicate the VAT tax point: monthly retainers, milestone invoices, and payments on account. The date of supply for VAT is generally the earliest of the invoice date, the payment date, or (for periodic supplies) the due date — so a retainer invoiced in advance creates a tax point when it is issued, not when the work is done.

HelloBooks tracks the tax point per invoice and per retainer schedule, so output VAT lands in the correct VAT 201 period even when the cash and the work fall in different quarters.

Frequently asked

Questions UAE professional services ask

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United Arab Emirates

VAT & the FTA VAT 201

5% VAT, registration thresholds, Designated Zones and the VAT 201 return.

Plans

UAE pricing

AED billing, VAT 201 preparation included on every paid plan.

Capabilities

All features

Accounting, VAT, banking, inventory, AI assist.

HelloBooks prepares the FTA VAT 201 return from your ledger — per-emirate boxes 1a–1g, zero-rated and exempt supplies, Designated-Zone handling, and the reverse charge on imports. For advisory firms it records client residence and place of enjoyment on each engagement so zero-rated exported services are evidenced, not assumed.