VAT Compliance Strategies for Financial Services in the DIFC: Key Rules, Exemptions, and Pitfalls

• DIFC is treated as part of mainland UAE for VAT; standard VAT rules apply, not free zone exemptions.
• Most margin-based financial services are VAT exempt, but fee-based services (advisory, management, commissions) are taxable at 5% if the client is in the UAE.
• Firms offering both exempt and taxable services must apportion input VAT on overheads.
• Cross-border services to clients outside the GCC may be zero-rated, but strict conditions apply.
• Robust accounting systems are essential for compliance and correct VAT calculations.

Source: easmea.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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