Article (2)
Application of Reverse Charge Mechanism to Goods
1. If a supplier supplies Goods to a registered recipient, and the recipient intends to resell
them or use them to produce or manufacture Goods, the following rules shall apply:
a. The supplier shall not be responsible for calculating the tax relating to the supply
of Goods and shall not record it in his tax return.
b. The recipient of Goods must calculate the tax on the value of the Goods supplied
thereto, and shall be responsible for all tax obligations arising from that supply and
for calculating the tax due thereon.
2. The provisions of Clause (1) of this Article shall not apply if the supply of Goods is subject
to zero-rated value-added tax in accordance with Clause (1) of Article (45) of the
aforementioned Federal Decree-Law No. (8) of 2017.
3. For the purposes of applying Clause (1) of this Article, the following must be taken into
account:
a. The recipient of Goods shall commit to the following before the date of supply:
1. Providing the supplier of Goods with a written statement stating that the intention
of supplying Goods to him is for the purposes of the cases stipulated in Clause (1)
of this Article.
2. Providing the supplier of Goods with a written statement confirming that he is
registered with FTA.
b. The supplier of Goods shall commit to the following before the date of supply:
1. Receiving and keeping the permits stipulated in Paragraph (A) of Clause (3) of this
Article.
2. Verifying that the recipient of Goods is registered, in accordance with the methods
approved by FTA in this regard.
4. If the recipient of Goods does not submit the permits stipulated in Paragraph (A) of Clause
(3) of this Article, the provisions of clause (1) of this Article shall not apply to him, and said
recipient may not consider that the Goods are being used or intended to be used for the
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Cabinet Resolution of 2024 on the Application of Reverse Charge Mechanism to Precious Metals and Precious
Stones Among Registrants in the State for Value-Added Tax Purposes
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cases stipulated in Paragraph (A) and Paragraph (B) of Clause (1) of Article (54) of the
aforementioned Federal Decree-Law No. (8) of 2017.
