In a significant development for the influencer community in the UAE, the country has implemented new tax regulations, bringing influencers under the purview of the Corporate Tax Law. These regulations are applicable to all influencers operating with the intention of generating income in the UAE.
To comply with the new regulations, influencers must register with the Federal Tax Authority (FTA) and report their earnings. Even if influencers are currently exempt from paying taxes, the obligation to register remains. The registration process involves obtaining a Corporate Tax Registration Number (CTRN), which can be conveniently secured through the EMARATAX platform accessible on the FTA’s website.
The tax regulations categorize influencers as businesses for tax purposes, recognizing their entrepreneurial activities in marketing products or services to their audiences. Revenue generated through sponsored posts, brand deals, and advertisements, coupled with responsibilities such as content creation, contract negotiations, and financial management, places influencers in the same tax category as traditional businesses.
All influencers, including those currently exempt from tax payments, must file a Tax Return for each tax period. This includes submitting all relevant supporting documentation within nine months from the end of the respective tax period.
The UAE tax authorities are vigilant in detecting tax evasion, examining factors such as non-issuance of invoices, false input tax credits, improper exemptions, and falsification of exports. In the context of influencers, tax evasion could involve not reporting or underreporting income earned through various channels.
Individuals convicted of tax evasion may face imprisonment for up to five years and fines of up to five times the amount of tax evaded.
In light of these new regulations, influencers are urged to proactively address their tax responsibilities to avoid legal consequences.
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