All goods and services, including electronic services, that are bought online are subject to 5 per cent Value Added Tax if the delivery address is in the UAE or if the products are used locally, the Federal Tax Authority (FTA) said on Wednesday. The FTA provided updated guidance making clear that all "electronic services supplies", including items such as e-books, music, magazines, games, movies and other services delivered digitally are subject to the tax if they are delivered to local accounts or consumed locally. “In light of the increasing importance of the e-commerce sector, clear mechanisms for procedures have been identified,” FTA director general Khalid Al Bustani said in a statement. “Value Added Tax, as it relates to the supply of goods and services through electronic means, contributes to supporting the activities of this vital sector … which depends on a locally developed digital and technological infrastructure,” he added. Other services subject to VAT include the purchase of domain names, website advertising, distance learning courses or live-streamed broadcasts of a range of content including sports, entertainment, cultural, political, artistic and scientific events, the FTA said. This applies to services delivered through websites, mobile apps and other digital platforms. The UAE is one of the most advanced e-commerce markets in the region. E-commerce revenue is projected to reach $5.7 billion (Dh20.9bn) this year and grow at a compound annual rate of 14.3 per cent to $9.8bn by 2024, according to Statista. The FTA is keen to apply international best practice when applying VAT, Mr Al Bustani said, adding that the UAE is one of the fastest growing e-commerce markets in the region, “enhanced by the availability of an advanced digital infrastructure and a growth-friendly legislative environment”. The FTA said that its new guide, which is available on its <a href="https://www.tax.gov.ae/en">website</a>, clarifies whether companies or individuals delivering services need to register for VAT or not, and whether such registration is compulsory or voluntary. It also deals with issues surrounding residency and the allowance of taxable expenses.