English text status

English translation published by the NBR in its bilingual Regulations file (marked unofficial). The Arabic text published in the Official Gazette remains the legal reference in the event of any discrepancy.

Practical summary

Linked Goods or Services for one price must be classified as one composite Supply or separate Supplies by their actual character. Composite treatment uses a principal and necessary or access-enhancing components, or closely linked elements whose split is artificial, with one Supplier or no separate component prices.

Who should read this?

Package, contract and invoice designers in hospitality, telecoms, construction and retail.

Why does it matter?

Marketing bundling does not automatically combine treatment, and invoice lines do not automatically separate it. Error can apply the wrong rate or exemption to the whole price.

Actual characterPrincipal and ancillaryNo artificial split

Current text

A. A Taxable Person shall be obliged, when making a Supply consisting of more than one linked Good or Service for one price, to determine whether the Supply constitutes a single composite Supply or separate multiple Supplies, in accordance with the actual characteristics of such Supply. B. A “composite Supply” means any Supply of Goods or Services constituting two or more components in the following cases: 1. Where the Supply includes a principal component and a component or other components necessary or essential for conducting the principal Supply. 2. Where the Supply includes a principal component and a component or other components that are not considered as an aim in themselves, but a means of improving access to the principal Supply. 3. Where the Supply includes two or more closely linked components where they form a single Supply which would be impossible or unnatural to split. C. A single composite Supply may occur in accordance with Paragraph B of this Article when either of the following conditions is met: 1. All components of the Supply are supplied by the Taxable Person. 2. The Taxable Person does not separately determine the price of the components of the Supply or impose a different price on each component.

Composite-Supply test

  1. 1

    Identify Customer's principal aim.

  2. 2

    Test independent aim or means to principal.

  3. 3

    Can elements be naturally split?

  4. 4

    Same Supplier?

  5. 5

    One or genuine separate prices?

  6. 6

    Document one treatment or allocation.

Connected provisions

Direct legislative link

Law — Article (5)

Composite Supply

The Article supplies composite and multiple tests.

Open connected Article
Direct legislative link

Regulations — Article (25)

Value allocation

Different treatments require allocation or highest rate can apply.

Open connected Article

Official guides and tools

Official text

VAT Executive Regulations

Article (6)

Connected Madar tools

Connected Madar tools

Tax Invoice Centre

Check the invoice route and issue deadline, and calculate VAT for a single transaction.

Illustrative example by Madar

Air-conditioner with essential installation

A unit with essential installation by the same Supplier for one price may be composite with the unit principal. Optional separately priced maintenance available elsewhere may be separate.

Questions to help you apply it

  • Principal aim?
  • Other element independent?
  • Same Supplier?
  • Separate price?
  • Natural split?