02.11.2021 10:30

Top Digital Marketing Services for VAT Application

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The industry of digital marketing is one of the fastest-growing sectors in the world. The sector is widespread in various UAE emirates, where social media marketing provided through SEO email. Thus, digital services on multiple platforms like marketing through search engines.

provided through SEO emailComplications of businesses working in marketing services in the UAE usually arise with the service provider. Thus, the person receiving the service and invoicing a customer for the supply of quality services and goods. It provided through the provider and recipient of the services.

Professionals providing digital marketing services in the UAE required to know VAT law and provisions of VAT consultancy firms. It must comply with to continue doing business in the UAE.

Digital marketing services in the UAE provide business should take the following steps that required of the VAT law related to providing online services.

  1. Prepare a list containing all online marketing and advertising services under the VAT in the United Arab Emirates.
  2. Determine the location of customers as well as the target audience for the services mentioned in the list.

Following the above steps, the business will need to identify the tax deity as well as determine the tax responsibility upon entering into a contract with the customer.

Some conditions for better analysis of VAT to impact on business by providing marketing services in UAE.

Situation 1

If a marketing company based in the United Arab Emirates provides marketing and advertising services to a customer entity located inside the UAE.

The supply would be in place for VAT purposes. Considered outside the UAE and thus no VAT will impose as transactions outside the VAT purview take place in the UAE.

Situation 2

If a marketing company provides marketing and advertising services to a customer entity located outside the UAE. The target audience for which advertisements are to post also located outside the UAE. In this case, there will also be a place of fulfillment for VAT purposes.

Situation 3

They consider outside UAE as the said services will use outside the UAE. The entity providing the marketing unit will not impose any BJP on the services offered to the customer unit. Export of service and hence VAT transaction will charge at the rate of 0%.

Situation 4

If a marketing company in the United Arab Emirates provides marketing and advertising services to a customer based in the United Arab Emirates. The target audience of advertisements to post is within the UAE. The VAT supply places purposes are UAE.  Both the provider and the recipient of marketing services located inside the UAE. Furthermore, the services provided must complete on the Arabic side of the UAE. The target audience also situated inside the UAE.

United Arab Emirates VAT law provisions related to digital marketing services. Thus, those services classified as as-electronic services as per the requirements of the VAT law applicable in the UAE.

  1. They provide services for software supply and software updates.
  2. Domain Names supply.
  3. Supply of equipment with remote maintenance and web hosting programs.
  4. It helps to supply sports music and films on demand.
  5. Digital magazines supply.
  6. It helps to supply of scientific-educational entertainment or sports broadcasting of Artistic Sanskrit Policy.
  7. Supply of distance education.
  8. It is streaming live advertising content via the Internet.

Now if we summarize the conditions as mentioned earlier, then we can conclude that in the case of situation 1 and situation two, the place of supply will be outside UAE. Hence no VAT will be taken as both the transactions are considered outside the scope of the VAT of UAE. The place of supply for situation three will be within the UAE but will take at the VAT zero percent rate. Whereas the position of amount for position four will be inside the UAE, and the standard rate of 5% will charge as Vat.

Accompanying supply for electronic and telecommunications services.

According to the executive rules of the VAT law applicable in the United Arab Emirates, there will be a place of supply for telecommunications and electronic services.

  1. To an extent, the consumption of supply in the United Arab Emirates within the United Arab Emirates.
  2. Within the UAE to an extent, the consumption of supplies outside the UAE.

According to the Executive rules of the BJP law applicable in the UAE, any person will consider out of state. Therefore, if that person does not have less than one month of attendance within the country over time.

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