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Reverse charge rules - Overseas Branch

What are reverse charge rules when UK company overseas branch received services from outside UK

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Hi All

My client is an Insurace broker. It is a UK company and it has an overseas branch in Dubai. As the company is providing exempt services, therefore it has to apply partial VAT exemption.

The question is when the overseas branch in Dubai receive services from suppliers in Dubai or outside Dubai e.g USA then when the UK company files the VAT return then does it need to reverse charge all the services received by overseas Branch in Dubai and then apply partial VAT exemption.

The overseas branch does not have a seperate legal entity in Dubai.

Typical Dubai costs are as follows.

  • Rent
  • Telephone
  • Legal and professional fees

Applying the reverse charge on Dubai expenses and then applying partial VAT exemption will cost thousands to my client every quarter.

What is your opinion on whether reverse charge need to applied and if yes, then what can they do to get around this?






Replies (2)

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By Les Howard
06th May 2020 14:42

Where supplies to the Dubai branch, these are not subject to the reverse charge in the UK.

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Replying to leshoward:
By Prestige Bookkeeping
06th May 2020 18:43

Would you declare Dubai transactions in box 7?

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