VAT Obligations for Artists & Social Media Influencers in the UAE

As the United Arab Emirates has an increase in the score of career possibilities in the performing arts sector and for social media influencers, UAE officials recognize the effect these roles have on society and have specified guidelines and presented adherence for the sector, particularly tax implications.

Who are social media influencers? 

The Federal Tax Authority describes artists as performers, dancers, singers, makeup artists, songwriters, stage performers, DJs, or people doing related activities and social media influencers as people who give their services utilizing social media to boost products and services like Instagrammers, bloggers, and YouTube hosts.

According to the new rule, all UAE-based SMIs and artists supplying taxable goods in the country are needed to register for VAT given the importance of imports and supplies which are taxable in the previous twelve months overreaches or are hoped to surpass AED 375,000 or AED 187,500 in the following 30 days.

VAT should be applied to all supplies formed by Artists and SMIs subject to the UAE VAT laws and would allure VAT at the right rates. Services like online promotional activities, advertising, and marketing activities will be deemed as supplies formed by VAT and SMIs will be applicable.

For computing the threshold, the Artists and SMIs must take into consideration all the taxable supplies that they form, also in case such supplies don’t come within the range of their major artistic or influencer activity.

Once the SMIs and artists are registered for VAT, a tax invoice is needed to be increased for all norm rate supplies made. This comprises online promotional activities, blogs, videos, social media posts, celebrity impressions, or any advertising activities.

SMIs and artists making taxable supplies are qualified for a complete recovery of input VAT, except for blocked products like some entertainment services and motor vehicles that are obtainable for personal utilization.

Non-resident social media influencers 

We recommend that non-resident artists and social media influencers who work to their ability must check whether the services are given to VAT-registered recipients or not in the United Arab Emirates.

In case the recipient is VAT registered, then the recipient is required to account for VAT under the reverse order means, although in case the service is to a non-registered recipient, they would be needed to register to VAT in the country instantly and collect VAT on the goods.

In case an artist or SMI acquires goods back for their services, the goods are feasted as regard for their usefulness. At the same moment, where the individual supplying the goods to the SMI or artists in exchange for the services is VAT registered, such an individual would even require to VAT account on the supply of products.

Acting through agents 

Moreover, where a VAT-registered SMI or artist doesn’t collect any consideration for its services, this must think about the provisions related to considered supplies and VAT account in case the supply comes within the meaning of a considered supply.

Or in the event of an SMI or artist owns an event management corporation, then the corporation must just for VAT on the supplies formed by the corporation. The person is deemed different from the corporation and is liable to account for VAT just on the supplies formed in his capacity.

In short, in case an Artist or SMI has a professional and the agent works in the name of and on behalf of the SMI or artist, the SMI or artists should account for VAT on the whole amount collected to the customer and the agent should account for VAT on the cost collected to the SMI or artist.

In case an SMI or artist has an agent that works in its name and projects with the customer on one hand and with the SMI or artist on the flip side, the artist or SMI should account for VAT on the amount collected to the agent and it should account for VAT on the amount collected to the customer.

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