Reverse charge mechanism UAE: imports, local cases and the records to keep

You ask in plain English, the AI does the bookkeeping work, and you or your accountant approve the result.

• You ask: “Find foreign supplier bills this quarter that have no reverse-charge VAT posted.”
• The AI agent: HelloBooks lists bills from suppliers outside the UAE, checks each for the self-assessed output and input entries, and posts the missing pair at 5% for your approval.
• You review: You or your accountant approve each entry and confirm whether the input side is fully recoverable before the return is prepared.

Article 48(1) of Federal Decree-Law No. 8 of 2017 treats a taxable person who imports concerned goods or services for business as making a taxable supply to itself. For services, Article 30(2) places the supply in the UAE when a supplier with no UAE residence serves a business recipient in the State.

Example: a Dubai marketing agency pays EUR 4,000, converted at AED 16,200, for an annual design-software licence from Ireland. It records AED 810 of output VAT and, because the software is used for taxable work, AED 810 of input VAT. Net effect zero, but both lines appear on the return.

The reverse charge also applies inside the UAE in specific cases. Article 48(3) covers registrant-to-registrant supplies of specified hydrocarbons for resale or energy production. Article 48(8) lets the Cabinet add further cases, and the FTA has published public clarifications on additional sectors, including a 2026 clarification on metal scrap trading between UAE registrants.

Where the reverse charge applies to a supply you make, Article 59(1) of the Executive Regulation requires your tax invoice to state that the recipient must account for the tax. Article 59(5) rules out the simplified tax invoice for these supplies.

Article 48(5) of the Executive Regulation requires you to keep the supplier's invoice showing details and the consideration paid. For concerned goods, you also keep a statement from the relevant customs department showing the details and value.

• Supplier invoice with description and amount paid
• Customs statement for imported goods
• Exchange rate used to convert to AED
• Your assessment of whether the input side is fully recoverable

When a bill arrives from a supplier outside the UAE, HelloBooks marks it as reverse charge, converts it to AED, and posts both sides of the VAT. The AI agent reads invoices in English and Arabic and picks up foreign suppliers from their address and currency. Partial recovery is respected: if your accountant has set an apportionment ratio, only the recoverable share lands on the input side. The figures roll into the draft return for review.