Do I Charge VAT to a Client Outside the UAE?

Quick answers

Do I charge VAT to a client outside the UAE?

Usually you charge 0% rather than 5% — but only if the export-of-services conditions are met, and zero-rating is never automatic just because the client is abroad. Getting this wrong is the most common cross-border VAT mistake in the UAE.

Is zero-rated the same as exempt?

A zero-rated supply is taxable, at a rate of 0%. It goes on your VAT return, it counts toward your registration threshold, and input VAT on related costs stays recoverable. An exempt supply is outside the VAT system, does not count toward the threshold, and blocks input recovery on related costs.

What is the 30-day rule for export of services?

You look at the total number of days the non-resident recipient was present in the UAE across a rolling 12-month period. Where services are supplied across a year, if the non-resident client's director spent more than 30 days in the UAE during the 12 months before the date of supply, the recipient is treated as being in the UAE.

Do overseas clients count toward the VAT registration threshold?

Yes. Zero-rated supplies count toward the threshold, so a business serving only foreign clients can still be required to register.

Is this tax advice?

No. This is general information about zero-rating exported services in the UAE. Confirm your obligations with the Federal Tax Authority or a qualified tax advisor.

Zero-rated is not the same as exempt

These get used interchangeably and they are not the same thing.

A zero-rated supply is taxable, at a rate of 0%. It goes on your VAT return, it counts toward your registration threshold, and input VAT on related costs stays recoverable.

An exempt supply is outside the VAT system, does not count toward the threshold, and blocks input recovery on related costs.

The practical consequence catches people out constantly: a UAE freelancer or agency working entirely for overseas clients can still be required to register for VAT, because zero-rated revenue counts toward the threshold exactly like standard-rated revenue does.

The conditions for zero-rating a service export

Article 31 of the Executive Regulation sets them out. In plain terms, the service is zero-rated when:

The recipient does not have a place of residence in the UAE or another implementing state, and is outside the UAE at the time the services are performed.

The service is not supplied directly in connection with real estate situated in the UAE or any improvement to it, and not directly in connection with moveable personal assets situated in the UAE at the time the services are performed.

There is also an anti-avoidance condition: if it is reasonably foreseeable that the service will actually be received in the UAE by someone else — an employee, a director, a branch of the non-resident client — zero-rating can fall away.

The 30-day rule most guides leave out

"Outside the UAE" is not decided on the day you invoice. It is decided by how much time the recipient spends in the country.

A person is regarded as being outside the UAE where their presence here is short-term — under a month — and that presence is not effectively connected with the supply.

The FTA's clarification is more specific about how to count it. You look at the total number of days the non-resident recipient was present in the UAE across a rolling 12-month period. The FTA's own example: where services are supplied across a year, if the non-resident client's director spent more than 30 days in the UAE during the 12 months before the date of supply, the recipient is treated as being in the UAE.

Two things follow that matter to anyone billing abroad:

A client who visits Dubai frequently can quietly stop qualifying, even though nothing about your service changed.

A short holiday or a transit stop with no meetings connected to your work does not break zero-rating. It is presence connected to the supply that does the damage.

What changed in November 2024

The Executive Regulation was amended with effect from 15 November 2024, and one change narrowed this area. Zero-rating for exported services now applies only where the supply is not caught by the special place-of-supply rules. Several categories of service that a supplier might previously have zero-rated for an overseas client are no longer eligible.

If your work touches installation, transport, cultural, artistic or similar categories, do not assume the older guidance you find online still applies. This is a point to raise with an accountant rather than resolve from a blog post.

Keep the evidence

Zero-rating is a position you have to be able to defend, not a box you tick.

Worth keeping with each engagement: the contract or written agreement, evidence of the client's residence outside the UAE, invoices and payment records, correspondence, the deliverables themselves, and anything showing the work was not connected to UAE real estate, UAE moveable assets, or received in the UAE by another person.

At an audit, "the client was foreign" is not evidence. The file is.

What this looks like on the invoice

A zero-rated invoice is still a tax invoice. It carries your TRN, sequential numbering and all the usual particulars — the VAT line simply shows 0% and a tax amount of zero.

It also still belongs in your VAT return. Zero-rated supplies are reported, not omitted, and a return that leaves them out understates your turnover.

In Fatura Go the rate is chosen per line — 5%, zero-rated or exempt — so one invoice can mix them, and catalogue products carry their own rate. The VAT report keeps the three apart and labels each with the box it maps to on the return: standard-rated sales to box 1, zero-rated to box 4, exempt to box 5, with the last two carrying net amounts and no tax. Where a period contains exempt supplies the report flags that input VAT on them is usually not recoverable.

When to stop reading and ask an accountant

This is the one area in UAE VAT where the honest answer is that a guide can only take you so far. Ask for professional advice if your client has any UAE presence, branch or staff; if your work relates to property or physical assets located in the UAE; if you sell through a UAE intermediary; or if the client visits the country in connection with your work.

The cost of an hour of advice is far below the cost of reclassifying a year of invoices.

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