Date of Supply for Independent Directors

VAT Public Clarification issued by FTA

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

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.

• 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 the there are periodic payments or consecutive invoices i.e. earliest of following
• Date of issuance of tax invoice
• The date of payment is due as shown on the tax invoice.
• Date of receipt of payment

In the event that 12 months have passed from the date of provision of services and none of the aforesaid events has occurred, the date of supply will be triggered at the end of the 12th month.

• 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 i.e. earliest of following.
• Date of issuance of a tax invoice
• The date on which the provision of services was completed
• Date of receipt of payment.