Ahh what a marvellous life influencers must have. Free gifts and lavish all-paid vacations are some of the benefits influencers get on the job. It’s not all glam though because those free items are actually TAXABLE in the UAE, according to The National.

UAE influencers who earn more than AED375,000 annually are required to pay VAT and that includes the free stuff

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Value Added Tax has been implemented in the UAE since January 1, 2018 and the rate is only 5%. The Federal Tax Authority issued reminders that influencers who earn more than AED375,000 annually must pay the 5% tax and that includes the free gifts and experiences.

UAE influencers are required to declare their free gifts and holidays they receive, in order for them to be taxed.

Many of influencers’ tasks are subject to tax such as paid promotion, appearances and feebies

Paid promotional work includes product, company or venue endorsements. Physical appearances are also taxable!

 

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Experts say this could lead to influencers to think twice before accepting an expensive holiday or gift as they will be expected to promote them on their social media accounts

This type of transaction is known as “payment for services” Bastiaan Moossdorff, senior VAT adviser at Baker & McKenzie Habib Al Mulla, said.

Natasha Hatherall-Shawe, chief executive of a Dubai marketing company known as Tishtash said,

Holidays at some of these Maldives resorts cost up to Dh100,000… And for unboxing, some people are getting Dh20,000 or even Dh50,000 of products a day

A partner and legal technology expert at ICLO law firm, Saleh Alobeidli said influencers are advised to invoice their clients before receiving any payment for work.

When VAT was introduced influencers did not consider that they were doing business – even though some of them were making much more money than even a [government] minister,

he added via The National report.

“However, today, if you do anything as an influencer, or as an artist, as long as you are making any promotion of any work and someone is paying you for what you are doing, all of this money is subject to VAT.”

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