The UAE’s Federal Tax Authority (FTA) have announced that any social media influencers and artists that earn more than Dh375,000 annually—including freebies—will have to pay Value Added Tax (VAT).
According to the news bulletin, companies who provide these gifts will also have to account for VAT on the supply of goods.
Any gifts such as phones, jewelry and even holidays could be subject to VAT. The implementation of VAT in the UAE began in January 2018 at a rate of 5%.
‘Artists‘ includes “performers, singers, dancers, stage artists, make-up artists, DJs, poets, song writers or any other individuals carrying out other activities” as mentioned in the bulletin.
This law will also apply to individuals that promote UAE-based businesses and companies overseas, as a VAT charge will be applied.Â
However, if an individual who is not a resident of the UAE provides services to UAE-based businesses, they do not need to register for VAT as the onus falls on the company to account for VAT under the reverse charge mechanism.
Read the detailed basic tax information bulletin here.