Do I charge UK VAT from my Dubai-based SaaS company?
Whether you need to charge UK VAT from your Dubai-based SaaS company depends on who you’re selling to and the type of service you provide, because UK VAT rules follow the “place of supply” principle.
If You’re Selling B2B (Business-to-Business)
If your UK client is VAT-registered, you do not charge UK VAT. Instead, the reverse charge mechanism applies — the UK business customer accounts for the VAT themselves. Your invoice should clearly state: “Reverse charge applies under UK VAT Act 1994, Section 8.”
If You’re Selling B2C (Business-to-Consumer)
If you sell digital or electronic services (like SaaS, apps, or subscriptions) directly to UK individual consumers, you must register for UK VAT, even though you’re based abroad. You are legally required to charge 20% UK VAT on these sales. This is because for B2C digital services, the place of supply is the UK, not the UAE.
Practical Scenarios
SaaS Founder: Selling to UK consumers? Yes, you must charge UK VAT and register with HMRC. Selling to UK businesses? No UK VAT is charged. Use the reverse charge.
Remote Consultant (Non-digital services): Selling B2B? No UK VAT — reverse charge applies. Selling B2C? Taxed where you (the supplier) are based — so UAE VAT rules apply instead — unless the service is digital, in which case it is taxed in the consumer’s country (UK).
Additional VAT Points to Remember
There is no minimum UK VAT threshold for non-UK sellers of B2C digital services — you must register from your first £1 of UK sales. The UAE’s 5% VAT generally does not apply to services exported outside the GCC. The UK no longer participates in the EU VAT MOSS scheme, so you must register directly with HMRC if required.
Bottom Line
B2B SaaS to UK businesses: No UK VAT. Reverse charge applies. B2C SaaS to UK consumers: Yes — register, charge, and remit UK VAT.
Always check with a qualified tax advisor to ensure you remain fully compliant with UK and UAE VAT rules.
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