The supply of international transportation Services for Passengers and Goods and Transport-related Services shall be subject to the zero rate in the following cases:
a. Transporting passengers or Goods from a place in the State to a place outside the State.
i.e., A passenger traveling by plane from Dubai to India.
b. Transporting passengers or Goods from a place outside the State to a place in the State.
i.e., A passenger traveling through the plane from India to Dubai
c. Transporting passengers from a place in the State to another place in the State by sea or air or land as part of a supply of international transport of those passengers if either or both the first place of departure, or the final place of destination, is outside the State.
i.e., A passenger traveling by plane from India to Abu Dhabi to Dubai.
d. Transporting Goods from a place in the State to another place in the State if the Services are supplied as part, or for the purpose, of the supply of Services of transporting Goods either from a place in the State to a place outside the State from a place outside the State to a place in the State.
i.e.: Transport of goods from the UK to Dubai through plane and then from Dubai to Sharjah through the truck.
However, if in the above example in d) the transport company subcontracts the transportation in two legs then:
- International Transportation – an invoice with 0% VAT for the UK to Dubai Airport &
- Domestic transport i.e. from Dubai Airport to Sharjah warehouse should be standard rated @5%.
(Source: www.gccfintax.com)