- The FTA has issued Public Clarification VATP037 on the VAT implications for directorship services provided by natural persons.
- It updates the previous guidelines under VATP031 and reflects changes to Article 3(2) of the VAT Executive Regulations.
- Directorship services provided by natural persons, whether UAE resident or not, for a remuneration and when appointed as a director on a board of any government entity or private sector establishment are not considered a supply of services for VAT purposes.
- This means that such services are excluded from VAT, reducing the administrative burden for individuals serving as directors.
- The new provision is effective from 1 January 2023, and transitional rules are provided to determine the VAT treatment of director services before and after this date.
- Only director services performed by natural persons, whether resident in the UAE or not, can be excluded from the supply of services for UAE VAT purposes.
Source Fintedu
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