Contributed by Emirates Chartered Accountants Group

Supplies provided by artists and social media influencers for consideration are subject to Value Added Tax (VAT) in the United Arab Emirates (UAE)

The Federal Tax Authority (FTA) in its bulletin provided that VAT shall apply to such services provided by artists and social media influencers that include, but are not limited to, any online promotional activities performed on behalf of other businesses for a consideration, such as promoting a product in a blog or a video or otherwise promoting a business on a social media post, any physical appearances; marketing and advertising related activities; providing access to any social media influencers’ networks on social media, and any other services that the SMIs may provide for a consideration.

UAE-based artists and social media influencers who make taxable supplies will be required to register for VAT, in case 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 Dh375,000.

 

The Federal Tax Authority (FTA) Released public clarification on adjustment on Account of Bad Debt Relief

FTA of UAE has issued a VAT public clarification (VATP024) on Adjustment on Account of Bad Debt Relief. In order to avail the benefit, the following four conditions must be satisfied:

  • VAT shall be charged and accounted for by the supplier on the supply made,
  • Consideration shall be written off from the books of accounts,
  • Debt must have remained unpaid for more the six months from the date of supply,
  • Supplier should have notified the customer of the amount of consideration that has been written off.

Registration as per Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) guidelines

As per the UAE Ministry of Economy the grace period for the specified businesses to register in connection with compliance with the Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) guidelines is 30th April 2021. As per the guidelines following four selected categories of business are required to be registered on the specified platform:

  • Auditors and accountants; 
  • Company and trust service providers; 
  • Dealers in precious metals and stones; 
  • Real estate agents and brokers

Brazilian Senate Approves Pending Tax Treaty with the United Arab Emirates

On 24 February 2021, Brazil's Senate (upper chamber of the National Congress) approved the ratification of the pending Income tax treaty with the United Arab Emirates. The Treaty was signed on 12 November 2018.

Ongoing Regulations:

  • Economic Substance Regulation (ESR) : As part of the UAE’s commitment as a member of the OECD Inclusive Framework, the Regulations require UAE onshore and free zone companies and certain other business forms that carry out any of the defined “Relevant Activities” to maintain and demonstrate an adequate “economic presence” in the UAE relative to the activities they undertake.

  

  • Country-by-Country Reporting (CbCR)

Country by Country (CbC) Reporting is part of Action 13 of the Base Erosion and Profit Shifting (BEPS) initiative led by the Organization for Economic Co-operation and Development (OECD) and the Group of Twenty (G20) industrialized nations.

 

CbCR requirements are applicable to the UAE-headquartered MNE Groups with ‘financial reporting years’ starting on or after January 1st 2019.

  • Ultimate Beneficial Owner Regulation

Cabinet Resolution No. (58) of 2020 regulating Beneficial Owner Procedures (the “Resolution”) came into effect on 28 August 2020 . The Resolution introduces new requirements for all entities licensed in UAE, to disclose its beneficial owners. The main purpose is to enhance transparency of entities registered in the UAE, as well as to develop effective and sustainable executive and regulatory mechanisms and procedures in respect of beneficial owner data.

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