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Social media influencers, artists to pay VAT in UAE

Social media VAT

Social media influencers and artists in the UAE must pay value-added tax (VAT) on the services they provide, the UAE’s Federal Tax Authority (FTA) has said.

FTA issued bulletin confirming that the services included any online promotional activities, such as blog or social media posts, paid physical appearances, or any marketing activities.

The bulletin defined artists as “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”.

It also defined influencers as “individuals who provide their services using social media to promote products and services such as bloggers, YouTube hosts, etc”.

Social Media VAT

If the artist or influencer recovered costs from their client then these would also be subject to VAT, the authority said.

Value Added Tax or VAT is a tax on the consumption or use of goods and services levied at each point of sale.

The bulletin added that all artists and influencers are required to register for VAT if the value of the services they provide exceeds AED375,000 ($102,100) in a 12-month period.

In addition, the FTA pointed out that if social media influencers or artists received goods – such as mobile phones or other gifts – in return for their services, instead of cash, then these too must be accounted for in their VAT calculations.

Value Added Tax (VAT) was introduced in the UAE on 1 January 2018. The rate of VAT is 5 per cent.

Levied in more than 180 countries around the world, VAT is a form of indirect tax. The end-consumer ultimately bears the cost. Businesses collect and account for the tax on behalf of the government. 

VAT will provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services.

It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.

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