TAX updates 2022
VAT Public Clarification on Mobile Phones, Data Packages and Airtime Made Available to Employees for Business Use.
The UAE Federal Tax Authority (“FTA”) published a new VAT Public Clarification (VATP028) to provide guidance on the input VAT recoverability related to mobile phones, airtime, and data packages that are made available to employees for business use by their employers. The Public Clarification inter-alia clarifies that a business is entitled to recover input VAT from mobile phone usage if these costs are incurred to make taxable supplies and all the following conditions are met:
- The business is registered for VAT and has purchased Phones, Airtime, and Packages in its own name (Not in Employees name)
- The business has a detailed documented policy which clearly states that the Phones, Airtime, and Packages may only be used for business purposes, and shall also specify the consequences of any personal use.
- The business regularly monitors the use of Airtime and Packages and retains explanation for the variances
- The business acts against employees using Phones, Airtime, and Packages for personal use.
- The business shall obtain and maintain the tax invoice received from supplier against their services