FTA issued a clarification regarding VAT on manpower and visa facilitation services

Manpower and visa facilitation are services implying that employement visas are issued by one person while the employees work under the supervision and control of another person. Hereinafter, we will refer to the person who provides the service and helds the employment visas as the Supplier, and the person under whose supervision the employees work as the Customer.

The new FTA document gives a clear distinction between the cases when the Supplier provides manpower and the cases of rendering the visa facilitation services. The document also clarifies how these services align with the VAT purposes.

Brief overview

Manpower services include identifying, recruiting, and hiring candidates and making such employees available to work for another entity, i.e. the Customer. In this case, the amounts are taken into consideartion for VAT purposes:

• amount of money received by the Customer for the manpower services provided;
• amounts of money directly paid by the Customer to the employees (such as salaries and benefits).

Visa facilitation services are classified as administrative services to facilitate the...