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New VAT exemption announced in UAE

Dubai: Ministry of Finance (MOF) in the UAE announced new VAT exemption in the country. The ministry informed that director services undertaken by natural persons serving as members of boards at entities and institutions across the UAE will not be subject to value-added tax (VAT) from January 1, 2023.

Meanwhile, VAT will still apply to the director services for legal persons serving as board members that delegate a natural person to act in the name of the legal persons as a member of the board of directors.

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The ministry updated that performing the duties of a member of a board of directors at a government entity or private establishment in exchange for a reward (monetary or benefits in kind) will not be considered as a supply of services for the purposes of VAT. At present, tasks performed by board members – natural and legal persons alike – are treated as taxable services subject to VAT, on the condition that the member provides them on a regular, continuous, and independent basis, and if the total value of these taxable supplies as well as any other taxable services and import transactions, exceeds the mandatory tax registration threshold.




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