Social Media – individuals who provide their services using social media to promote products and services such as bloggers, YouTube hosts, etc.
Is VAT chargeable on all supplies made by Artists and SMIs?
The normal rules apply for Artist and SMI, therefore, if the supplies are taxable, they would attract VAT at the appropriate rate.
Similarly, 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 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 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.
Is there a need for Artists and SMIs to register for VAT?
UAE-based Artists and SMIs who make taxable supplies (zero-rated supplies included) are required to register for VAT with the same terms:
- Mandatory – 375,500 of taxable supplies and imports in the last 12 months exceeded, or is expected to exceed in the next 30 days
- Voluntarily – 187,500 of taxable supplies and imports or taxable expenses incurred in the last 12 months exceeded, or is anticipated to exceed in the next 30 days.
Are tax invoices required to be issued?
Yes, tax invoices are required for all standard-rated supplies. Simplified tax invoices may be issued where the supply is made to an unregistered recipient or where the consideration for the supply made to a registered recipient does not exceed AED 10,000.
Are Artists and SMIs permitted to recover input tax?
Yes, Artists and SMIs making taxable supplies are eligible for a full recovery of input VAT, with the exception of blocked items such as:
– Certain entertainment services.
– Purchased, leased, or rented motor vehicles that are available for personal use.
(Source: Federal Tax Authority)