What is the reverse charge mechanism under UAE VAT?

Under the reverse charge mechanism, the normal roles are flipped: instead of the supplier charging VAT and remitting it to the Federal Tax Authority, the buyer self-accounts for the VAT directly on their own return, reporting it as both output tax owed and, if entitled, input tax recovered in the same period. It applies mainly to imports of goods and services into the UAE from outside the country, and to certain specified domestic supplies between VAT-registered businesses, such as some transactions in hydrocarbons, precious metals, and scrap materials.

The practical effect for a fully taxable business is often cash-flow neutral, since the same amount is declared as both a liability and a recoverable credit in one return — but the reporting obligation and the risk of getting it wrong still sit squarely with the buyer, not the supplier. A UAE company importing consulting services from abroad, for example, must self-account for VAT on that invoice even though the foreign supplier never charged UAE VAT itself. Missing a reverse charge entry is a common and avoidable VAT filing error. RASEEKH checks import and cross-border transactions for reverse charge treatment as a standard part of VAT review.