Please be informed that Public Clarification VATP037 replaces Public Clarification VATP031.
Article 3 of the Cabinet Decision No. 52 of 2017 on the Executive Regulation of the Federal Decree-Law No. 8 of 2017 on Value Added Tax ("Executive Regulation") has been amended by Cabinet Decision No. 99 of 2022, which introduced a new provision.
Clause (2) of Article 3 of the amended Executive Regulation states that the functions of a member of a Board of Directors (hereafter referred to as "Director"), performed by a natural person, appointed as a Director, for any Government entity or private sector establishment, shall not be considered as a supply of services.
The new provision takes effect as from 1 January 2023.
This Public Clarification provides guidance on how to apply the new provision and determine the resulting VAT obligations prior and post the date of 1 January 2023 on concerned natural persons.
With effect from 1 January 2023, the performance of a Director's function, by a natural person and for a remuneration (monetary or in kin...