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UAE Sets Out VAT Rules For Social Media Income, Performers

Friday, March 19, 2021

The United Arab Emirates' Federal Tax Authority has released a bulletin highlighting the value-added tax rights and obligations of performers and those who earn income from online platforms.

The FTA has released a new 'Basic Tax Information Bulletin', which highlights that the same VAT obligations apply to these persons as for other taxable persons. These persons must charge and remit VAT for services provided that are subject to VAT at the headline rate.

The bulletin highlights that any online promotional activities that an influencer performs on behalf of other businesses for a consideration should be subject to VAT, including but not limited to:

  • promoting a product in a blog, featuring a product in a video or otherwise promoting a business on a social media post;
  • any physical appearances, marketing, and advertising-related activities;
  • providing access to any influencer's network on social media, etc.; and
  • any other services that the influencer may provide for a consideration.

They must register for VAT when their taxable suppliers, including zero-rated supplies, in the past 12 months exceeded AED375,000, or their suppliers are expected to exceed that threshold in the next 30 days. Voluntary registration is permitted when their turnover reaches AED187,500 in the past 12 months or is expected to exceed that threshold in the next 30 days.

It highlights that non-resident artists and influencers are also required to register for VAT where they make any taxable supplies with the place of supply in the UAE and no other person is obligated to account for VAT on such supplies.

The bulletin highlights that, for the purposes of calculating the threshold, these taxpayers should take into consideration all the taxable supplies that they make, even if such supplies do not fall within the scope of their core artistic or influencer activity.

It further sets out that the normal rules apply with regards to input tax credit claims and concludes with seven FAQs regarding specific issues common with these taxpayers' affairs.