VAT for Amazon & Noon Sellers UAE: Who Pays the Tax?
Sales via Amazon UAE and Noon have made it easier for the sellers to reach consumers all over the UAE. However, the main question that always leads to confusion among online sellers :
“Is VAT the liability of Amazon/Noon, or does the seller need to handle it?”
There is no straightforward answer to the same. VAT applicability in the UAE on e-commerce depends on the role of the platform, the seller’s business model and how the goods are supplied and invoiced.
In this blog we are explaining who is responsible for VAT for the sale on Amazon and Noon platforms in UAE, common mistakes by the sellers and how to stay compliant with VAT in 2026.
Disclaimer: The examples and company names used in this blog are fictional and created solely for educational purposes.
Legal Framework for VAT on Online Marketplaces in the UAE
VAT responsibilities for marketplace transactions are governed by:
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Cabinet Decision No. 52 of 2017 (VAT Executive Regulations)
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FTA VAT Guides and Public Clarifications on E-commerce
Under the provisions of UAE VAT law, the main question is:
Who is making the supply to the customer, the online platform or the seller?
Understanding the Amazon & Noon Business Models
Amazon and Noon can act in different capacities, depending on the arrangement:
1. Marketplace (Agent) Model
2️. Fulfilment / Logistics Support Model (e.g., FBA, Noon Express)
3️. Principal (Reseller) Model
The VAT implications on each model is different.
Scenario 1: Seller Is Responsible for VAT (Most Common Case)
When Does This Apply?
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The owner of goods is the seller
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Price is determined by the seller
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The role of the platform is only the facilitation of sales
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Seller issues the tax invoice (directly or via the platform system)
In the above case, Amazon or Noon acts as an agent only, not the supplier.
VAT Responsibility
✔ VAT registration is mandatory for the seller (if threshold exceeded)
✔ Seller should charge 5% VAT on taxable supplies
✔ Seller must reports the turnover and VAT while filing the return
✔ Platform will charge commission plus VAT from the seller
Example
A registered seller in the UAE sells cosmetic products on Amazon UAE.
➡ Seller invoices the customer (through the Amazon system)
➡ Standard-rated VAT at 5% will be applicable
➡ Seller reports VAT liability, input and turnover to FTA
➡ Amazon invoices the seller for their commission together with VAT
✔ The Seller is fully accountable for VAT
Scenario 2: Platform Is Responsible for VAT (Principal Model)
When Does This Apply?
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The platform buys goods from the seller
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Platform resells goods to customers
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Price is being determined by the platform
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Platform issues the tax invoice to the customer
In the above case, Amazon or Noon is the supplier.
VAT Responsibility
✔ Platform charges VAT from the customer
✔ Output VAT is being reported by the platform
✔ Seller issues invoice to platform (B2B supply)
Example
A brand supplies goods to Noon under a wholesale agreement.
➡ Noon resells goods to customers
➡ Noon charges VAT also from customers
➡ Seller charges VAT (if applicable) from Noon
✔ Platform is responsible for customer VAT
Does Fulfilment by Amazon (FBA) or Noon Express Change VAT Responsibility?
No, fulfilment does NOT shift VAT responsibility automatically.
Even if:
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Goods are stored in the warehouses of Amazon or Noon
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The platform is handling delivery and returns
➡ VAT responsibility remains with the seller, unless the platform is acting as principal.
Non-Resident Sellers on Amazon & Noon
Non-resident sellers mainly do not understand their obligations.
Key Points:
✔ Registration of VAT is mandatory, even without a UAE presence on the first supply itself
✔ There is no threshold on VAT registration for non-residents
✔ On the imports, Customs duties and VAT may be applicable
✔ Seller will remain responsible for VAT on local supplies
Failure to register for VAT on the first supply itself can lead to FTA penalties and account suspension.
Common VAT Mistakes by Amazon & Noon Sellers
❌ Assuming that Amazon/Noon platforms will pay the VAT on the seller's behalf
❌ Not registering for VAT even though they exceeded the threshold
❌ Raising incorrect invoices for VAT
❌ Not charging for VAT on commissions
❌ Not treating VAT on returned goods and credit notes properly
These mistakes frequently lead to FTA audits.
VAT Registration Threshold for Marketplace Sellers
|
Type of Seller |
VAT Registration requirement |
|
UAE resident |
Need to register my mandatory if the supplies exceeded AED 375,000 |
|
Voluntary registration |
Once crosses supplies of AED 187,500 |
|
Non-resident supplier |
Mandatory from first taxable supply it self |
Best Practices for Marketplace Sellers in 2026
✔ Properly review the seller agreements (agent vs principal)
✔ Verify who is issuing the tax invoice
✔ Ensure VAT settings on the marketplace dashboard
✔ Ensure reconciliation of VAT returns with reports from the platform
✔ Maintain adequate records for at least 7 years
Quick VAT Responsibility Checklist
Should ask yourself:
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Do I have any inventory?
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Who is issuing the tax invoice to the customer?
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Who is determining the selling price?
If the answer to all is you, then VAT responsibility is yours.
How Flyingcolour Tax Consultant Can Help?
We assist Amazon and Noon sellers with:
✔ VAT registration requirements (resident & non-resident)
✔ Review of Marketplace VAT setup
✔ VAT return filing & reconciliation
✔ Audit support and advise on reducing the penalties
✔ Tax structuring for the e-commerce sector
Frequently Asked Questions (FAQs)
1 Does Amazon UAE pay VAT on behalf of sellers?
No. In most cases, sellers remain responsible for paying VAT.
2 Is VAT charged on Amazon and Noon commissions?
Yes. Platforms will charge VAT on their commission invoices.
3 Do FBA or Noon Express sellers need VAT registration?
Yes, if they meet the registration requirements.
4 Can a non-resident seller sell VAT-free in the UAE?
No. VAT registration is mandatory for non-residents on their first taxable supplies.
5 Who is liable if VAT is charged incorrectly?
The liability is upon the seller unless the platform is acting as principal.
To learn more about UAE VAT Guide for E-commerce Sellers on Amazon and Noon Sellers, book a free consultation with one of the Flyingcolour team advisors.
Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.