UAE Guide: What is VAT on digital Marketing Services in Dubai?

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With the introduction of VAT in Dubai, all forms of digital marketing services are charged at a rate of 5% VAT. Digital Marketing services is being spread all over the Dubai. The digital marketing will be in the form of :

  1. Search Engine optimization.
  2. Search Engine Marketing.
  3. E-mail Marketing.
  4. Other Social Media Marketing.

The computation of VAT in Dubai, UAE is quite different with respect to determining the location of:

    1. The supplier.
    2. Recipient of service.
    3. Performance of Service

All the above factors play the main role in generating the tax invoice, by locating the place of supply of service. It is important for businesses providing digital marketing services in Dubai to have knowledge of the VAT law provisions. The digital marketing businesses also need to assess the impact of VAT on their business transactions when engaging with client entities.

Understanding place of Supply in Dubai, UAE

    1. If the marketing company and service client are in Dubai but Target Audience is outside Dubai, then place of supply of service will be outside Dubai, hence no VAT applicable.
    2. If the marketing company in Dubai but Target Audience and service client are is outside Dubai, then place of supply of service will be outside Dubai,hence no VAT applicable.
    3. If the marketing company and Target Audience in UAE but service client are is outside UAE, then place of supply of service will be inside UAE, hence VAT applicable.But this kind of transaction will be considered as export of service and will be charged as Zero rated.
    4. If all marketing company, Target Audience and service client are within UAE, then such transaction is taxable at a rate of 5%.

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