Do I Charge VAT on Delivery in the UAE?

Quick answers

The rule that changed

A supply made of several components can be treated one of two ways. As a single composite supply, where one part is the main thing and the rest ride along at its rate. Or as multiple supplies, where each part is judged on its own.

Since November 2024, one condition decides it: if the price of each component is separately identified — on the invoice, in the quote, or in the contract — it is not a single composite supply.

Why that matters more than it sounds

If your goods are standard-rated, nothing changes. Delivery is 5% either way.

If your goods are zero-rated — an export, for instance — it matters a great deal. Bundled into one price, the delivery rides on the zero rate. Broken out as its own priced line, it becomes a separate supply and is assessed on its own merits.

The counterintuitive part is that itemising feels like the careful, transparent thing to do. Since the amendment it can be the thing that creates a liability that would not otherwise exist.

This applies to the quote and the contract too

The condition is not limited to the invoice. If the underlying contract or the quotation breaks out the price of each component, that is enough.

So the decision is made when you price the job, not when you produce the document. An invoice showing one figure cannot rescue a contract that itemised.

Subcontracting does not break it

A related point that used to worry people: using a courier does not stop the supply being yours.

The single-supplier condition survives subcontracting, provided you remain contractually responsible to your customer for the whole thing. Handing the parcel to a delivery company does not make the delivery a separate supply from someone else.

When delivery is its own supply anyway

If delivery is what you sell — you are the courier — it is not a component of anything. Domestic transport of goods within the UAE is standard-rated at 5%.

International transport of goods is a different case and can be zero-rated where the conditions are met, which is a rule about the movement itself rather than about how it appears on an invoice.

Recharging what the courier charged you

If you paid a courier and are passing the cost to your customer, that is a recharge, and the rules on recharging expenses apply: the invoice was in your name, so it forms part of what you are supplying rather than being a payment made on your customer's behalf.

Which brings you back to the same question — bundled into the price, or a separate line.

What to do about it

Decide deliberately rather than by habit.

If everything you sell is standard-rated, this is not a decision you need to make. Show delivery however your customers prefer to see it.

If you have zero-rated supplies — exports, or anything else at 0% — think before itemising. A single price is the simpler position, and if a customer needs the breakdown, giving it in correspondence rather than on the priced document is not the same thing as pricing the components separately.

If in doubt on a large contract, this is worth an hour of advice rather than a guess. The amendment is recent and a great deal of published guidance still describes the position before it.

Where Fatura Go fits

Delivery can be a line on the invoice with its own VAT rate, or folded into the price of what you are selling — the choice is yours and the document reflects it either way.

Because rates are set per line, an invoice mixing standard-rated and zero-rated items shows each correctly rather than applying one rate to the whole document.

Frequently asked questions