March 21, 2021Dated: | Byadmin admin | Social Media influencers are one of the most talked about people these days so much so much so that they are celebrities in their own right. The importance of Social Media influencers cannot be denied these days as almost all the goods and services are promoted on the social media these days. This has brought them under the radar of the Federal Tax Authority. At the time when VAT was introduced, influencers and artist were not considered themselves as if they were doing business Activities and opted to register for VAT and pay Tax on the earned revenue. But this Clarification from the Federal Tax Authority has now clarified all doubts and Malpractice in the mind of every one that they should get themselves registered for VAT and pay Tax.The Federal Tax Authority recently issued a bulletin which states that any influencer earning more than Dh375, 000 annually must pay 5 per cent VAT and the freebies will be counted towards the total amount.The Federal Tax Authority has also clarified Valuation of Consideration received by influencers and Artist:Consideration in Cash: Value of Money receivedConsideration in Kind (Good, Gift): Market value of the Goods or Gift receivedConsideration in Cash as well as in Kind: Value of Money received Plus Market value of the Goods or Gift received.It may be pointed that the influencer could be evading the tax authorities by failing to declare free gifts and experiences. The services that are subject to the tax include any kind of promotional work, which includes plugging a product, company. Physical appearances and access to influencers’ networks on social media are also taxable.FTA further stated that the cost of any free product or an experience will also be taxable as per the new rule.This law can prove to be a game-changer and it could mean an end to the influencers accepting free gifts and expensive holidays which they receive in return for promoting on their social media accounts. The bulletin further states that if you are an influencer, or an artist as long as you are promoting and work and the other party is paying you for what you are doing, all these transactions will come under the preview of VAT. VAT registration Dubai will become mandatory for every influencer once he reaches the threshold. Thus every influencer needs VAT consultancy services in Dubai to understand and timely file his VAT return.If you are a social media influencer and have any query related to VAT registration in UAE then feel free to call +971 4 4542366 today for a quality consultation or please send an inquiry to info[at]flyingcolour[dot]com.Please Note: This article was published on 21st March 2021. The information provided in the article is based on the policies and rules applicable at the time of writing it. Talk to one of our consultants for any recent update or change.