If you are in the UAE, you should be aware of the following tax updates for 2022.
VAT Public Clarification on Employees’ Access to Mobile Phones, Data Packages, and Airtime for Business Use
The UAE Federal Tax Authority (“FTA”) issued a new VAT Public Clarification (VATP028) to provide clarification on the input VAT recoverability of mobile phones, airtime, and data packages provided to employees by their employers for business usage. The Public Clarification states, among other things, that a business can reclaim input VAT on mobile phone usage provided the costs are incurred to make taxable supplies and all of the following conditions are met:
• The business is VAT registered and has purchased Phones, Airtime, and Packages in its own name (not in the name of an employee).
• The business has a detailed documented policy that clearly states that the Phones, Airtime, and Packages may only be used for business purposes, as well as the consequences of any personal use.
• The company audits the use of airtime and packages on a regular basis and keeps track of any discrepancies.
• The company takes action against employees who use company phones, airtime, and packages for personal use.
• The company must obtain and save the tax invoice received from the supplier for their services.