July 2019


In a recent state appeal court case the authorities found that an SSC provider that involved itself in customer documentation and contract processing for its client was involved in intermediary services with respect to its client’s supply of goods, rather than classic office support services.  This caused it to lose its zero ratings for back-office services charged abroad and an 18% GST charge to apply.

This case may turn out to be a significant landmark as it opens a new door for inspectors to look into the details of what Indian SSC’s do for their clients and to apply GST in some cases. This GST would currently be an irrecoverable cost for a foreign client.


South Africa has long been one of the states that insist upon VAT registration for foreign entities supplying inward digital services, with the unusually aggressive position of this applying to B2B as well as B2C transactions.

As of 1 April, it has now widened the definition of services caught by the provision to include online advertising, online consulting, online training, online gaming, and software subscriptions. It has, however, raised the threshold for registration from ZAR 50,000 per annum to ZAR 1,000,000 (approximately US$ 71,000/ €63,000/ £ 56,000).

For more details on South African digital supplies see here.

The UAE has published the decision that official participants of Expo 2020 will be allowed VAT refunds even if they are not UAE VAT registered.

Expo 2020 is a registered exhibition due to take place in Dubai from October 2020 to April 2021. Official participants of the Expo are countries and intergovernmental organisations that have accepted the official invitation from the UAE to participate as an exhibitor.

The decision differentiates between operating expenses and the expenses incurred in relation to the exhibition space. Participants are eligible to claim VAT on supplies relating to the operations of the participant’s office and imports of goods for the personal use of the representative, staff and beneficiaries.  VAT-registered official participants may also be able to recover input tax incurred on making a taxable supply.

If the participant isn’t VAT registered, a refund entitlement certificate must be obtained from the Bureau Expo 2020 Dubai office to be audited and approved which will then allow them to claim input tax on supplies relating to the construction and dismantlement of the exhibition space and the operations and presentations within the space in addition to the operating expenses.  The VAT refund will be paid directly to the participant from the Federal Tax Authority (FTA) once approved.

If participants are UAE VAT registered, their process for recovery of VAT on operating and commercial activities will be through their VAT return submitted directly to the UAE Federal Tax Authority (FTA).

As of 1 October 2019, B2B supplies of most building and construction services will no longer require the supplier to charge UK VAT but will be reverse chargeable for the customer (see here for the rules).

The application of the law is complex as it applies to services covered by the UK’s “CIS” scheme for personal and corporate taxation in the construction sector, which has its own complex set of rules as to which activities are caught within its application. We recommend that suppliers or recipients of construction sector services in the UK confirm the application of the new rules to their transactions.

Input VAT recovery is possible on vehicles and mobile phones within Bahrain and the National Bureau for Revenue (NBR) where there is both business and personal use.

The NBR has released guidance on how to determine a fair and reasonable allocation as well as a simplified method that can be applied to make the calculation.  Under the simplified method, a fixed percentage is used to determine business and personal use; 40% fixed on all costs for motor vehicles and 60% fixed costs for mobile phones.