Is VAT charged on UAE construction work for a client based abroad?
Yes. Article 30 of the VAT Decree-Law places the supply of services related to real estate where the real estate is located, and Article 21 of the Executive Regulation includes construction, maintenance, conversion and similar work. Work on a UAE property is a UAE supply at 5% even when the client is abroad.
On this page
Why it matters
Because the place of supply for services related to real estate is where the property is, work on a UAE building is a UAE supply. A contractor should not treat it as an export of services because the client is overseas.
The reverse case
A UAE contractor working on a building in another country makes a supply whose place is outside the UAE, so no UAE VAT applies to it.
How SupaJack Construct helps
Progress invoices are raised from certificates with the 5% rate applied to UAE contracts, so the VAT treatment does not depend on where the client's invoice address is.
Related tools and guides
See the VAT guide for contractors, the VAT calculator, the payment certificate calculator, the retention calculator, finance and VAT in SupaJack Construct, the answer on whether a payment certificate triggers VAT and the meaning of e-invoicing.
Worked example
A London-based investor appoints a Dubai contractor to fit out a villa it owns in Dubai for AED 1,200,000. The contractor charges AED 60,000 of VAT, because the villa is in the UAE.
Questions people ask
Can it be zero-rated as an export?
No. The place of supply is the UAE.
Does maintenance count as related to real estate?
Yes, it is listed in Article 21.
What about work on a building abroad?
The place of supply is outside the UAE.