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May 15, 2026

This Public Clarification clarifies the rules for determining the date of supply for VAT on services provided by Independent Directors. It outlines scenarios based on when board fees are determined and the payment structure. It specifies that if fees are confirmed only after the Annual General Meeting, the date of supply is when the fees are known, aligning with Article 25 of the VAT Law. For fees known upfront with periodic payments, Article 26 applies. For fees known upfront without periodic payments, Article 25 again determines the supply date based on the earliest of relevant events.

VATP009

VAT Public Clarification

Date of Supply for Independent Directors

Issue

The date of supply prescribes the point in time when a VAT Registrant needs to account for VAT. The date of supply is determined either as per the general rules or the special rules, depending on whether there will be periodic payments or consecutive invoices.

This Public Clarification discusses the date of supply for the Board fees paid to Independent Directors.

Summary

In the scenario where the Board fees for the Independent Directors are not known at the outset and are determined only upon the conclusion of the Annual General Meeting, the date of supply would be triggered when such fees are known.

In other cases where the Board fees are known at the outset, the date of supply would be determined as per Article 26 of the Federal Decree-Law No. 8 of 2017 on Value Added Tax (“VAT Law”) where there are periodic payments or consecutive invoices.

However, where there are no periodic payments or consecutive invoices, the date of supply would be determined as per Article 25 of the VAT Law.

Detailed Discussion

Instances where Board fees are known only upon conclusion of Annual General Meeting:

There may be instances where the Board fees for a given year are ascertained only after the conclusion of the Annual General Meeting ('AGM'). It is only at this point that the remuneration, if any, for the Independent Directors is known.

In the event that the Board fees are determined upon the conclusion of the AGM and the Independent Directors neither issue any invoice nor receive any payment prior to such date, the date of supply would be the date on which the provision of services was completed in accordance with Article 25 of the VAT Law.

The FTA is of the view that the services are deemed to be completed only when such fees are known upon conclusion of the AGM, despite the fact that the provision of services may have been physically completed earlier.

In view of the above, the date of supply would be triggered at the time the Board fees are known and the Independent Directors would be required to account for VAT accordingly. Further, the tax invoices would need to be issued within 14 days of the date of supply in accordance with Article 67 of the VAT Law.