- March 13, 2021
- Posted by: Aswani
- Category: News
The services of artists and social media influencers (SMIs) are subjected to Value Added Tax (VAT), as per the latest Basic Tax Information Bulletin issued by the Federal Tax Authority (FTA).
If any artist or SMI is offering promotional or advertising services in return for a payment, VAT will be incurred. The promotional services offered by artists and SMIs are in plenty; it could be an advantage for the country’s economy.
Artists and SMIs who engage in promoting a business through their social media accounts or a mention in their posts, blogs or videos or any physical appearance for the purpose of marketing or advertising or providing access to an influencer’s social media network, in return for consideration will be reflected as a service to be added in VAT.
Cases wherein an artist or influencer incurs any amount while providing a supply and recovers that amount from client; it will fall within the scope of VAT.
The artists can be anyone who can promote a business in their personal capacity. The bulletin also 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.”
Even if VAT was imposed on every product or service purchased, the entertainment sector was not included till now. With more people to contribute to the nation’s economy, it will flourish.