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May 15, 2026

This official FTA guide clarifies the UAE VAT treatment for director's services. It establishes that services provided by an independent director are considered a taxable supply, subject to VAT at 5% if the mandatory registration threshold of AED 375,000 is exceeded. The guide details the place of supply rules, crucial for determining tax jurisdiction, based on the location of the director and the recipient company. It explicitly references Articles 29 and 30 of the VAT Decree-Law. It also outlines special scenarios, including when services to overseas companies may be zero-rated under Article 31 of the Executive Regulations.

Director's Services

VAT Guide | VATGDS1

March 2018

1. Guidance Note

1.1. Overview
1. 1.1.1. Short brief
  1.1.2. Purpose of this document
  1.1.3. Who should read this document?

2. Director's Services

2.1. VAT treatment of director services
1. 2.1.1. Summary
  2.1.2. Why are director's services subject to VAT?
2.2. Determining Place of Supply for Director's Services provided
2.3. Director Fee – Special scenarios
1. 2.3.1. Director working overseas
  2.3.2. Director providing services to overseas company
  2.3.3. Business supplied director
  2.3.4. Common director
  2.3.5. Right to a director

Guidance Note

Overview

Short brief

VAT has been introduced in the UAE with effect from 1 January 2018. As a general consumption tax on the supply of goods and services, its effects must be understood by businesses, individual persons, and government entities in the following contexts:

Whether director's services that are provided to other persons, are considered a supply subject to VAT.
How the place of supply shall be determined for director's services in order to apply VAT to the correct country, if applicable.
Applicability of different VAT rates to director services.

In particular, employees who perform services for their employer are not considered to be making a taxable supply. However, taxable persons who provide independent director's services to other legal entities would be considered to be making a taxable supply of services (subject to place of supply rules). The services are subject to VAT at 5%, with a few possible exceptions where 0% VAT may apply.

Purpose of this document

This document contains guidance about the characterisation of director's services under several models to determine whether a taxable supply of services exists for VAT purposes.

Who should read this document?

This document should be read by anyone appointed in a director capacity, and key stakeholders who are responsible for tax matters.