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Tax on Influencers!
Who is the influencer?
An influencer is a person who has the ability to convey his message to the audience through his contents, which make him able to affect their opinions and decisions in various fields such as travel, cook, beauty, etc.
Why are the influencers important?
1. Marketing:
When it comes to purchasing choices, influencers can have a significant impact because Consumers are more likely to trust other people’s opinions and experiences than an advertising campaign.
2. Build personal brand:
They use their social media accounts to build their personal Brand and achieve income through advertisements and selling their product.
3. Positive changing:
Is spread through awareness about urgent issues.
Influencers and the Value Added Tax in the UAE
Services provided by influencers like Product promotion, Brand promotion subject to the VAT law in the UAE to achieve a fair taxation among Economic activities Where influencers who make a lot of sales cannot be exempted from Value Added Tax, if their sales exceed AED 375,000 in the last 12 months.
If the influencer intentionally crossed AED 375,000 and did not register it will be accounted as a tax evasion in the UAE law which is considered as crime and can even lead to 5 years of imprisonment.
How to calculate the VAT?
When the value of the taxable supplies and imports of influencers exceed AED 375,000 in the past 12 months has to register in vat by the FTA , and Fill a periodic tax return every 3 months, issuing tax invoices to their clients including the provided service amount and the vat, and the payable vat is due by the 28th of the following month.
Are tax invoices required to be issued?
Yes, tax invoices are required for all standard-rated supplies. Simplified tax invoices may be issued where the supply is made to an unregistered recipient or where the consideration for the supply made to a registered recipient does not exceed AED 10,000
Recovery of Input Tax
Great news for influencers they can now recover the input VAT on the expenses which they incur to be a influencer in UAE.
Influencers and Corporate tax in the UAE?
All influencers in UAE are required to register for Corporate Tax*
How to calculate the Corporate Tax?
The good news for all influencers is that first AED 375,000 of their Taxable Income will be exempted for Corporate Tax purposes and any income exceeding this threshold will be taxed at 9% by the FTA.
