Can you claim VAT on cloud hostingin the UAE?
Last reviewed
- Can you recover the VAT?
- Recoverable
- VAT charged
- 5%
- Corporate tax
- Deductible
Recoverable for business use, through reverse charge when the provider bills from abroad.
When you can claim the VATand when it's blocked
You can claim
- Recoverable for business use.
- Some providers bill with UAE VAT through a local entity; others bill from abroad with no VAT, in which case you account for it under reverse charge.
You can't claim
- Businesses making exempt supplies must apportion.
Worked examplesand why they land that way
- Recoverable
Hosting invoice from an overseas entity with no VAT
Reverse charge 5%, recoverable.
The provider bills from abroad with no UAE VAT, so you account for 5% under reverse charge. For business use you claim it back in the same return, so the net VAT cost is zero.
- Recoverable
Provider with a UAE entity charging 5%
Recoverable with its tax invoice.
When the provider bills through a UAE entity, the 5% is on the invoice. It's recoverable for business use with the provider's tax invoice showing its TRN.
What to keepand what to watch
Documents you need
Tax invoice with TRN, or overseas invoice plus a reverse charge entry.
Corporate tax
Deductible.
GL account: Software and cloud hosting
Common mistakes
Skipping reverse charge on overseas invoices. Since 1 Jan 2026 no self-invoice is needed, but the VAT still has to be reported.
What changed recently
Self-invoicing for reverse charge removed from 1 Jan 2026.
Questions peopleask about this
How do I know if reverse charge applies?
Check the billing entity on each invoice. A UAE entity charging 5% means a normal tax invoice. An overseas entity with no VAT means you account for it under reverse charge.
Do I still need a self-invoice?
No. Since 1 January 2026 you don't issue a self-invoice under reverse charge, but you still report the VAT and keep the supplier's invoice as support.
Does a business with exempt income get full recovery?
No. A business that also makes exempt supplies apportions the VAT on shared costs like hosting.
Relatedexpenses
- SaaS/software Recoverable
- Internet and Phone Depends
- Electronics Recoverable