UAE: Services extended by artists, influencers subject to VAT – authorities

Services offered by artists and social media influencers (SMIs) are subject to Value Added Tax (VAT), the UAE’s Federal Tax Authority (FTA) has confirmed.

In respect of supplies made by artists, the normal rules apply for the applicability of VAT. However, services supplied by SMIs are generally subject to VAT, including but not limited to:

– Any online promotional activities performed on behalf of other businesses for a consideration, such as 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 SMIs’ network on social media etc; and
– Any other services that the SMIs may provide for a consideration.

If an artist or SMI incurs any cost to make a supply and subsequently recovers the cost from its client, such reimbursement also falls within the scope of VAT in the UAE, the basic tax information bulletin issued by the FTA on the tax treatment of services by artists and SMIs, read.

Artists include individuals who make supplies in their personal capacity as performers, singers, dancers, stage artists, make-up artists, DJs, poets, song writers or any other individuals carrying out other activities, the bulletin read.

“UAE-based artists and SMIs who make taxable supplies (which include zero-rated supplies) in the UAE are required to register for VAT provided the value of their taxable supplies and imports in the last 12 months exceeded, or is expected to exceed in the next 30 days, the mandatory registration threshold of Dhs375,000,” the statement read.

The UAE government instituted a 5 per cent VAT on goods and services in January 2018, to promote the country’s economic growth and to wean itself off its dependence on oil revenues.

Earlier last year, Saudi Arabia decided to implement a spate of austerity measures, which included an increase in VAT, from 5 per cent to 15 per cent starting July 1.

Read more: Saudi Arabia triples VAT, cuts cost of living allowances

Towards the end of last year, UAE officials refuted reports of any imminent plans to scale the tax.

Read: No plans to hike VAT in the UAE, officials reiterate