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UAE FTA ADDRESSES VAT ON DONATIONS, GRANTS & SPONSORSHIPS

10-02-2019

FTA’s PUBLIC CLARIFICATION 

The United Arab Emirate’s (“UAE”) Federal Tax Authority (“FTA” or the “Authority”) has issued a new Public Clarification (the “Clarification”) to outline and address the applicability of Valued Added Tax (“VAT”) and the taxability of donations, grants and sponsorships in the country.  

Per the Clarification, in the case that the donor, grantor or sponsor received return benefit(s) on the respective payment(s), such payment(s) would be considered as a supply and thus, subject to VAT. Alternatively, should there be no benefit retained, the payment(s) would be treated as being outside the scope of VAT. 

Further, in a statement issued on 5th February 2019, the Authority emphasized that the above would be dependent on the particular facts and circumstances of the matter. 

HOW CAN TLG HELP? 
TLG’s Corporate & Commercial Division would be pleased to provide you with assistance and support in assessing the applicability, implacability and/or impact of the Public Clarification and ensure optimum compliance with all UAE VAT laws, rules and regulations.  

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