Where is a service actually "supplied" for UAE VAT — and why isn't it always the customer's location?
I sold a consulting service to a client outside the UAE — is that treated as a supply inside the country, or outside it?
The general rule for the place of supply of services under UAE VAT law runs counter to what many business owners assume: the default is that the place of supply is the supplier's own location, not the customer's. If your company is established in Dubai and you provide a consulting service to a client in London, that supply is, by default, treated as taking place inside the UAE — separately from the question of whether it then qualifies for zero-rating as an export of services.
This is where the practical difference between dealing with a business customer (B2B) and an individual consumer (B2C) actually shows up. If your customer is a VAT-registered business in another GCC state that has implemented the common VAT framework, the place of supply can shift to the customer's country instead of yours. On the other side, if you are the one receiving a service from a foreign supplier not established in the UAE, and you'll use that service in your UAE business, the place of supply is the UAE — and as the registered recipient, you self-account for the VAT under the reverse charge mechanism rather than the supplier collecting it from you.
The clearest and most commonly applied exception is services connected to real estate — sale, leasing, brokerage, or construction supervision services. Here, the rule has nothing to do with either the supplier's or the customer's location; the place of supply is simply where the property itself sits. If a Dubai-based broker arranges the sale of a property in Sharjah for a client based in London, the place of supply is Sharjah — the property — regardless of where the broker or the client happen to be.
The same logic applies to cultural, artistic, sporting, educational, and entertainment services, and to services organising exhibitions and conferences: the place of supply is wherever the service is physically performed. If a company organises a conference in Abu Dhabi for attendees from outside the UAE, the place of supply is Abu Dhabi — meaning the UAE — even if the organiser and every attendee are based abroad.
Why does this matter in practice? Because getting the place of supply right determines whether a service falls inside UAE VAT's scope at all, whether it can qualify for zero-rating as an export, and whether your registration obligation is even triggered based on turnover counted as taking place inside the country. Misclassifying it can mean VAT that was never collected from the customer, or penalties on an incorrectly filed return.
At RASEEKH, we review the actual nature of each service a client provides before determining its place of supply and classifying it correctly on the return — because the general rule and its exceptions turn on the nature of the activity itself, not just on how the contract is worded.