VAT REQUIREMENTS FOR ARTISTS & SOCIAL MEDIA INFLUENCERS (SMI’s)

March 15, 2023Dated:  | |

The UAE is one of the most happening places in the world, we can see people of various nationalities. Eventually, we witness the growth in career opportunities for people in the field of arts and Social Media Influencers (SMIs).  UAE authorities understood the impact of these roles on society and have set specific guidelines and introduced the tax implications for the industry, in a special manner.

Who are social media influencers?

SMI refers to artists like:

  • Performers,
  • Singers,
  • Dancers,
  • Stage artists,
  • Make-up artists,
  • DJs,
  • Poets,
  • Lyricists (songwriters), or
  • Any other individuals performing other activities or providing services like paid promotions on social media platforms (bloggers, Instagrammers and YouTubers, etc.).

Is VAT registration mandatory for artists and influencers in UAE?

  • For UAE-based SMIs the general VAT registration rules apply.
  • For activities performed, with the place of supply being UAE, then the regular VAT registration rules are applicable.
    • Voluntary registration threshold limit of AED 187,500 in the last 12 months
    • Mandatory registration threshold of crossing AED 375,000 in the last 12 months and the application for VAT registration has to be submitted within 20 working days

Is VAT return mandatory for artists and influencers under UAE VAT rules?

Upon successful VAT registration, the SMI has to file their periodic VAT returns with FTA, in the frequency as mentioned by FTA on their tax certificate. The supplies made will be classified as,

  • Standard rate,
  • Zero-rated or
  • Exempt.

What are the VAT implications for services provided in UAE by non-resident SMIs (place of supply being UAE)?

  • The service recipient is not registered with the VAT
    • Considering the services are provided by non-resident SMI in UAE, then the SMI is required to register with VAT and there is no threshold for getting registered if the recipient is not registered.
  • The service recipient is registered with the VAT
    • SMI is not required to register for VAT, since the service recipient is required to account for the VAT under the reverse charge mechanism.
  • We suggest you go through our article on reverse charge mechanism to know more about this: https://www.flyingcolourtax.com/?s=reverse+charge&submit=

Why Flying Colour?

VAT requirements and procedures may look very simple, but they are tricky as other compliances, hence it needs due diligence in understanding the business operations and the activities involved. It is highly recommended to be done by qualified and trained professionals, in order to avoid ending up making errors during notification filing or reporting because of the lack of knowledge, which results in hefty penalties.

In order to save your business from making terrible mistakes that can attract huge penalties, choose Flying Colour. Our team of experts will ensure perfection, compliance, and timelines.

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