Social media influencers operating in the UAE would be subject to the Value Added Tax (VAT), the country's tax authority has said.

Ankush is a journalist hailing from India, who has edited and written for publications in his home country, the UAE, US, and UK. Previously the editor of Gulf Business in Dubai and of Entrepreneur in India, Ankush is a keen student of economics, a follower of Manchester United since 1996 and a disciple of Archer.

Social media influencers operating in the UAE would be subject to the Value Added Tax (VAT), the country’s tax authority has said.

According to a local news report, which cited the Federal Tax Authority, digital businesses such as “social influencers” will be subject to VAT. In addition, online retailers, who will have to ensure that the tax is applied to all goods sold on their platforms including those sold by third parties.

VAT, known in some countries as goods and services tax, or GST, is a consumption levy imposed on a product at each stage of production, before the final sale.

The UAE and Saudi Arabia are on track to levy a 5% VAT on January 1 with the rest of the GCC following by the beginning of the following year.

Urging compliance before time, UAE’s Federal Tax Authority is urging businesses subject to the VAT to register before December 4 to avoid paying the tax from their own pockets.

Khalid Al Bustani, director general of the authority, said this week that businesses would be well advised to complete their registration formalities before December 4, as the authority requires by law 20 working days to access and process their applications.

Companies submitting applications after that date are not guaranteed to get their formalities completed, will not be able to charge 5% to their customers and may have to pay the tax from their pocket until their registrations are finished, he warned.