In a global economic hub like the UAE, businesses incur a wide variety of costs and expenses every day. It is common for business owners to make payments on behalf of customers or clients as part of business transactions. In the UAE, the VAT treatment of disbursement and reimbursement of such expenses are not the same. Businesses need to properly understand the VAT treatment of disbursement and reimbursement of expenses.
For some time, confusion existed among the business owners about how the Federal Tax Authority (FTA) defines disbursements and reimbursements of expenses. However, the FTA released a public clarification (VAT P013) which has removed the confusion regarding the VAT implications. Let’s discuss these concepts in more detail to understand the implications of VAT.
Source jcauaeaudit
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