• • It should be a supply of service
  • • Services are for consideration
  • • Services provided must be in the course of conducting business
  • • Services are provided in the UAE
  • • Service is not an exempt supply
  • • The director undertakes services on a regular, ongoing and Independent basis
  • • The total value of taxable supplies made by the director, including supplies of director services, exceed the mandatory registration threshold i.e AED 375,000




  • • Consideration can be director’s fee, bonuses, stock options, recharges for goods and services acquired by the director etc
  • • A director may also choose to voluntarily register for VAT where the value of taxable supplies (including director fees) exceed the voluntary registration threshold of AED 187,500




  • ♣ By default, the place of supply for services is the “place of residence” of the director


  • ♣ In the case where the recipient of the services has a place of residence in another GCC Implementing State and is registered for VAT therein, the place of supply shall be the place of residence of the recipient of services


  • ♣ Where the recipient of services is in business and has a place of residence in the UAE, and the director does not have a place of residence in the UAE, the place of supply is the UAE



A Director can recover Input tax attributable to making any of the following :

  • ♣ Taxable supplies
  • ♣ Supplies that are made outside the UAE which would have been considered taxable had they been made in the UAE

For example, transportation expenses to commute to work and equipment needed for such businesses, and other similar goods and services incurred for the purpose of the business


  • ♣ The Director can use input tax apportionment rules to identify the proportion of VAT which may be recovered in case of partly acquired goods or services
  • ♣ A director should not recover any VAT in respect of expenses incurred for solely non- business purposes



  1. 1. Director providing services overseas
    • • Services will be zero-rated


For example, a UAE resident director may be contracted to physically attend board meetings in the UK




If the services are physically provided in another GCC Implementing State to a company which is resident and registered in that other GCC Implementing State, the supply will be treated as taking place in that other Implementing State. Therefore, no UAE VAT will be charged.


  1. 2. Director providing services to overseas company
    • • Services will be zero-rated if the company does not have a presence in the UAE, and the performance of the services is not received in the UAE by any person who would be able to recover VAT incurred
    • • If such services are provided to a company which is resident and registered in another GCC Implementing State, the supply will be treated as taking place in that other Implementing State. Therefore, no UAE VAT will be charged


  1. 3. Business or Government entity supply Director to serve as a director of another Government entity, company


  • • The supplier entity must account for VAT on any payment it receives for agreeing to the appointment, provided the place of supply is in the UAE.
  • • VAT may be charged at 0% if the supply is considered to be an export


  1. 4. Common Director

An individual may act as a director of a number of  companies, including in related companies

  • ◊ One company may pay all the director’s fees and then allocate the costs to recover appropriate proportions from the others
  • ◊ The individual’s services, such as attending meetings or approving expenditure, are supplied by the individual to the companies of which they are a director
  • ◊ There is no supply between the companies and accordingly, no VAT is due on the share of money recovered from each company.


  1. 5. Right to a Director

   This often occurs in situations where one company is investing in another and is exercising a legal or contractual right to appoint a Director to the board of the company in which they are investing

  • ◊ The Director has specialized knowledge and gives expert advice to the other company
  • ◊ The fee charged by the company appointing the director is treated as consideration for a taxable supply and it is subject to VAT