1.1.1. Short brief
VAT has been introduced in the UAE with effect from 1 January 2018. As a general consumption tax on the supply of goods and services, its effects must be understood by businesses, individual persons, and government entities in the following contexts:
• Whether director’s services that are provided to other persons, are considered a supply subject to VAT.
• How the place of supply shall be determined for director’s services in order to apply VAT to the correct country, if applicable.
• Applicability of different VAT rates to director services.
In particular, employees who perform services for their employer are not considered to be making a taxable supply. However, taxable persons who provide independent director’s services to other legal entities would be considered to be making a taxable supply of services (subject to place of supply rules). The services are subject to VAT at 5%, with a few possible exceptions where 0% VAT may apply.
This document contains guidance about the characterisation of director’s services under several models to determine w...