The document discusses value-added tax (VAT) obligations for social media influencers and artists in the United Arab Emirates (UAE). The UAE Federal Tax Authority has confirmed that influencers and artists must pay VAT on online promotional activities, blog/social media posts, paid appearances, or marketing activities. They must register for VAT if the value of services provided exceeds AED375,000 in a 12-month period. The document provides guidance on calculating VAT for barter arrangements, free services, and situations involving intermediaries or overseas work.

1. Influencer Marketing and its VAT
obligation in the UAE
We’re influenced by what we see and aesthetics are no different. 2021
redefined the role brands play in consumers’ lives, and the way in which
consumers relate to brands. Consumer habits have forced brands to prioritize
digital and adjust budgets, which has dramatically increased the role
influencers play in a brand’s overall strategies.
Influencer marketing has exploded over the past several years with the rise of
social media stars. It should be no surprise that the influencer marketing
space is expected to grow from just over $13 billion to at least $15 billion by
2022.
With the increasing trend in social media marketing and rising number of
Social media influencers the authorities have taken necessary steps in order
to ensure the compliances into the industry.
Federal Tax Authority is one of such authorities that has invested time in
ensuring tax applicability on SMIs.
Social media influencers and artists in the UAE must pay value-added tax
(VAT) on the services they provide, the UAE’s Federal Tax Authority (FTA)
has confirmed.
In a bulletin issued by the FTA, services included any online promotional
activities, such as blog or social media posts, paid physical appearances, or
any marketing activities.

2. The authority also said that if the artist or influencer recovered costs from their
client then these would also be subject to VAT. All artists and influencers are
required toregister for VAT if the value of the services they provide exceeds
AED375,000 ($102,100) in a 12-month period.
In addition, the FTA pointed out that if social media influencers or artists
received goods – such as mobile phones or other gifts – in return for their
services, instead of cash, then these too must be accounted for in their VAT
calculations. VAT was introduced in the UAE on Jan. 1, 2018 at a rate of 5
percent.
To summarise the key takeaways from the bulletin are given below.
 Supplies made by Artists and SMIs will follow the general rule of VAT and will be
subject to VAT at the appropriate rate of either 5% or 0% (subject to meeting the
zero-rate conditions).
 The recharge of costs incurred by SMIs or Artists in rendering the services will
also fall within the scope of VAT.
 As a general rule, tax invoices or simplified tax invoices must be issued for any
taxable supplies made by Artists and SMIs.
 All UAE based Artists and SMIs will need to assess their VAT registration liability
according to the normal VAT registration rules, which require a business to
register for VAT if the value of taxable supplies and imports in the last 12 months
exceeded AED 375,000, or if is anticipated the AED 375,000 threshold will be
exceeded in the next 30 days.
 Non-resident Artists and SMIs who make any taxable supplies in UAE are also
required to register for VAT if there is no other person (i.e. a VAT registered
recipient of the supply in the UAE) who is obligated to account for VAT on the
supplies on a reverse charge basis.
 There is no registration threshold for non-resident businesses so any taxable
supplies made to a non-VAT registered recipient in the UAE will create a VAT
liability for a non-resident Artist or SMI.
 The FTA has confirmed that for the purpose of calculating the threshold, the
SMIs or Artist should take into account all taxable supplies they make, even if
they do not fall under the core artistic or influencer activities.
 Where an Artist or SMI enters into barter arrangements, for instance, receiving
goods in exchange for providing services, the goods will be treated as
consideration for the service and VAT must be accounted for on the value of this
consideration. The VAT legislation provides that where all or part of the

3. consideration for a supply is non-monetary, the value will be calculated as a sum
of the monetary part and the market value of the non-monetary part, less the
VAT amount.
 Where the Artists and SMIs provide services for free, the transaction needs to be
assessed under the deemed supply provisions and treated accordingly.
 As a general rule of input VAT recovery, Artists and SMIs will be eligible to
recover the input VAT incurred fully subject to the normal restrictions under the
UAE VAT law – such as entertainment services, and the purchase, lease or
rental of motor vehicles that are available for personal use.
 The bulletin has addressed specific scenarios of the industry such as:
 Where the Artists/SMIs own an event management company, then supplies
made by the individuals will be considered as distinct from the supplies made by
the company. Therefore, VAT obligations will be required to be met separately.
 Where intermediaries act as agents on behalf of, and in the name of, Artists or
SMIs, output VAT will need to be accounted for by such intermediaries on their
commission. Artists and SMIs will then need to account for VAT on the entire
consideration charged to their client.
 Where intermediaries act in their own name, and contract with both the client and
the Artists or SMIs separately, VAT will need to be accounted for on the full
amount charged by the SMI or Artist to the intermediary and the intermediary will
account for VAT on the full amount charged to the client.
 Where an UAE resident Artist or SMI is engaged by a UAE based client to
provide advertising services outside of UAE, the supplies will be subject to the
standard rate of 5%. For instance, the UAE based client owns a resort overseas
and contracts with a UAE SMI to promote the resort by vlogging their
experiences in the resort or posting stories on social media platforms, the
supplies made by the UAE resident SMI will be subject to VAT at 5%.
Influencer Marketing and its VAT
obligation in the UAE
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