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Director fees will no longer be subject to VAT in the UAE as of Jan 1, 2023

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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