Another important update to the Executive Regulations for VAT in the UAE with effect from 1 January 2023; Director fees will no longer be subject to VAT in the UAE!
Whilst the update – on paper – seems to be limited to a change in VAT treatment only, it is important to note that the update will likely also result in VAT Registered Directors having to (re-)assess their VAT registration position and possibly de-register for VAT where they have “ceased” making taxable supplies as a whole. A potential de-registration requirement should be monitored carefully and an application should be lodged in a timely manner in order to avoid administrative penalties, such as late de-registration penalties.
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