Home / Free tools / Reverse-charge classifier

UAE Reverse-Charge VAT Classifier

Does the reverse-charge mechanism apply to your transaction? Walk the Federal Decree-Law 8/2017 Articles 48-50 + Cabinet Decision 52/2017 Article 47 decision tree in 5 questions. Returns yes/no with article cite and the VAT 201 box mapping.

Answer 5 questions — under 30 seconds

Reverse-charge only applies on the buyer side (the recipient of the supply). If you're the seller, this tool doesn't apply.
Reverse-charge mechanism only applies if you're VAT-registered with the FTA (turnover ≥ 375k OR voluntary registration ≥ 187.5k).
Cross-border = supplier outside UAE. Domestic = supplier inside UAE Mainland.
Reverse-charge rules differ by supply type. Pick the closest match.
For B2B services, place of supply is the recipient's location (Article 30(1)) — usually UAE if you're UAE-based. Skip if Q4 is not "services".

What this tool covers

The reverse-charge mechanism (RCM) shifts the obligation to account for VAT from the supplier to the buyer. It's used in the UAE for four main scenarios:

1. Imports of goods (Article 48(1))

When a UAE Taxable Person imports goods into the UAE, the customs system collects VAT at the point of import. The buyer reports this in Box 6 of VAT 201, and the recoverable portion in Box 10 — net zero if 100% used for taxable supplies.

2. Concerned services from outside UAE (Article 48(3))

When a UAE Taxable Person buys services from a non-UAE supplier (Google Ads, AWS hosting, Stripe, foreign consultants, royalties), the buyer self-accounts for VAT at 5%. Output VAT in Box 3, recoverable input VAT in Box 10. This is the most-missed reverse-charge category for UAE SMBs.

3. Gold and diamond between registered traders (Article 50)

Per Cabinet Decision 32/2018, B2B sales of investment-grade gold/diamonds between two VAT-registered traders apply reverse charge — the buyer accounts for VAT. The seller issues a zero-VAT invoice with the RC indicator.

4. Oil, gas, and petrochemical products (Cabinet Decision 25/2018)

Crude oil and natural gas supplies between registered persons apply reverse charge. Less relevant to typical UAE SMBs.

What this tool does not handle

Why getting this wrong costs real money

If you should have applied reverse charge but didn't, the FTA can:

For a single forgotten AWS invoice of USD 5,000/month over 24 months, the back-VAT + penalties can easily reach 8,000+. Multiply by every foreign-vendor invoice your business misses.

HIBR ERP catches reverse-charge transactions automatically

Every foreign-vendor invoice you create in HIBR triggers an RCM flag. The VAT 201 Box 3 + Box 10 entries auto-populate. No more audit-time surprises.

Reserve founder slot →