What is a Consultancy service?
Does VAT apply to consultancy services?: A consultancy service is simply a firm that provides professional services for a fee. For example, A client may ask whether it’s better to buy something or make it in-house, to implement some business plans, marketing, etc.. The consultant will advise the company or top management to select the best practice.
Some of the consultancy services in the UAE are Listed Below
- Management Consultant
- Financial advisory consultant
- Human resource consultant
- IT Consultant
Does VAT apply to consultancy services?
In case of supply made within the UAE from business to Business or Business to customer, the VAT will be charged for transactions either at zero or standard rate i.e., 5%
what services are VAT exempt in the UAE?
Before discussing let’s make clear what are exempt supplies in the UAE for VAT?
Exempt supplies are not taxable supplies either in standard rate or at zero rate.VAT is not charged on exempt supplies and the supplier cannot recover the VAT paid on expenses incurred to make the exempt supplies.
VAT exemption in the UAE is given to different cases and industries in which one is financial services.
The UAE VAT regulation authority is not defining what is financial services but it gives some hints to find out that.
Financial services are those services which is connected to money or its equivalent, Loans, Current, Deposit or Savings account, commission, etc.. are some of the examples of financial services exempted from VAT in the UAE.
Kindly informed that all the above said financial services are not exempted from VAT in the UAE.
If any of the above services are conducted in return of fee, Discount, Commission or gets in return which is similar as a consideration in respect of the supply of services, which will come under taxable supplies.