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Reverse Charge Mechanism on electronic devices introduced in the UAE

The Federal Tax Authority has announced an RCM (Reverse Charge Mechanism) to come into effect as of 30th October 2023. The legislation means that the VAT on certain electrical devices will be passed on to the recipient rather than being the responsibility of the supplier.

Devices that are covered by the RCM include mobile phones, smartphones, personal computers, desktop computers, minicomputers, analogue, digital, and hybrid computers, servers, computerised engine control units (ECU) for cars, and other similar devices.

However, the TEG (The Electronics Group), a trade organisation for the electronics industry in the UAE with members such as Al Yousuf Electronics and Al Ghandi Electronics, has highlighted that further understanding and clarification is needed to classify which products are deemed as ‘parts and components’ and therefore necessary for the operation of a device.

"For other items, a careful evaluation is needed. For instance, whether a Wi-Fi dongle is necessary for a computer device's operation or features is a critical consideration. It's imperative for the industry to review its product portfolio to ensure accurate classifications".

To read the Tax Authority's announcement click here


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