Top 8 Points Freelancers and Influencers Should Consider For VAT

0
836

Value-added tax is the responsibility that SMEs and multinational corporations have been fulfilling for years now in the UAE. There was a specific field or sector in the society that was enjoying higher-earning but was not contributing to tax. That field is freelancing or influencers. All influencers can be considered as freelancers, but all freelancers are not influencers.

Who are freelancers and influencers?

Freelancers are the ones who are not permanently employed by some organizations. They may not even work on a contractual basis but work with various parties at the same time. They provide services to vendors and employers on their own conditions. On the other hand, influencers have a significant social media following and use it to promote some idea, product, or service and earn commission through it.

Explore this article in detail to get your hands on a brief guide about VAT for freelancers and influencers in the United Arab Emirates.

Check Best Cryptocurrency Stocks To Invest In Right Now

Top 8 Points Freelancers and Influencers Should Consider For VAT

Freelancers and influencers often have a higher earning than an average employee in some organizations. Considering the rising culture of influencer promotions, the federal tax authority in the UAE has announced that they should pay value-added tax. This is a new concept for freelancers and influencers, due to which they might end up committing a few mistakes.

Here are the major points freelancers and influencers need to watch out for in terms of value-added tax in the UAE.

1) Check VAT Eligibility

The first thing freelancers and influencers must consider for VAT in the UAE is to check their eligibility. People earning more than Dh 375,000 annually are eligible to pay VAT. And if they are earning between AED 187,500 and AED 375,000, then it is optional for them to register.

Most influencers get free gifts, holidays, and a number of other services, which will be included in their annual income. Moreover, they will need to pay VAT on these free gifts at the rate of 5%.

2) Get Your License

The freelancers and influencers can also get a business license in the UAE, which will benefit them in terms of taxation. By getting a license, they can establish their individual company. The freelancers are already getting the trade license. However, the influence can get a trade license, influencer license, or a social media license to establish their entity.

3) Take Care of Registration

One of the most critical points that the freelancers and influencers need to take care of is their VAT registration. After checking their eligibility for this unique taxation system, they need to follow the proper registration procedure for VAT payments. They also need to take care of the payment deadlines to fulfill their responsibility without earning a fine.

4) Maintain Financial Records

The next thing freelancers and influencers must consider in terms of value-added tax is maintaining financial records. They need to maintain a proper record of all the invoices and share them upon inquiry. At times, these parties receive payments in other currencies too. They have to maintain the invoices and their record to avoid any complications later on.

5) Track Payment Dates

Apart from maintaining the financial records and payment invoices, the influencers and freelancers in the UAE have to track their payment dates too. The financial cycle and dealings of such parties are different from those of established business organizations. They often receive payments in advance or can face delay in it. Tracking the date will specify their VAT period and boost transparency.

6) Check VAT Return Implications

Another important point to consider in terms of value-added tax is to explore its return implications. When the value of a product or service changes, the amount of value-added tax implemented on it also changes. So, if there is any such case, the freelancers and influencers need to check the implications and find out if it is applicable to them or not.

7) Register for VAT Return

In the case freelancers and influencers meet the criteria and are eligible for VAT return in the United Arab Emirates, they need to register for it and provide all the essential documents required for it. They have to take care of the registration, and deregistration dates, to avoid any penalties or other complications.

8) Consult the Experts

Lastly, the influencers and freelancers can seek the help of experts in the UAE to handle value-added tax matters smoothly. The concept is new to them, due to which they can mistakes. These mistakes can negatively impact your reputation and fan following. So, hire the best VAT consultancy in Dubai and let the experts take care of all legal matters while you focus on your work.

Ensure VAT compliance to gain more profits!

Freelancers and influencers are becoming popular in the UAE. Being one of them, you need to fulfill your responsibility and pay tax to the authorities in case your annual income passes the given threshold. Get in touch with experts and follow all the legal procedures to earn more profit instead of a poor reputation.

 

Also Read: Essential Things You Need To Know About Stop Loss Order In Forex