- The FTA has issued Public Clarification VATP037 on the VAT implications for directorship services provided by natural persons.
- It updates the previous guidelines under VATP031 and reflects changes to Article 3(2) of the VAT Executive Regulations.
- Directorship services provided by natural persons, whether UAE resident or not, for a remuneration and when appointed as a director on a board of any government entity or private sector establishment are not considered a supply of services for VAT purposes.
- This means that such services are excluded from VAT, reducing the administrative burden for individuals serving as directors.
- The new provision is effective from 1 January 2023, and transitional rules are provided to determine the VAT treatment of director services before and after this date.
- Only director services performed by natural persons, whether resident in the UAE or not, can be excluded from the supply of services for UAE VAT purposes.
Source Fintedu
Click on the logo to visit the website
Latest Posts in "United Arab Emirates"
- UAE Issues New Fines for Non-Compliance with Electronic Invoicing System Under Cabinet Resolution 106
- UAE Announces New Sugar-Based Excise Tax Rates for Sweetened Drinks Effective January 2026
- UAE Updates Guide on Administrative VAT Exceptions: New Rules, Documentation, and Application Procedures
- UAE Amends VAT Law: New Exemptions, Refund Deadlines, and Stricter Input VAT Rules Effective 2026
- UAE Amends VAT and Tax Procedures Laws: Key Changes to Refunds, Compliance, and Limitation Periods
