Instances where Board fees are known only upon conclusion of Annual General Meeting:

There may be instances where the Board fees for a given year are ascertained only after the
conclusion of the Annual General Meeting (‘AGM’). It is only at this point that the remuneration, if any, for the Independent Directors is known.

In the event that the Board fees are determined upon the conclusion of the AGM and the
Independent Directors neither issue any invoice nor receive any payment prior to such date, the
date of supply would be the date on which the provision of services was completed in accordance with Article 25 of the VAT Law.

The FTA is of the view that the services are deemed to be completed only when such fees are known upon conclusion of the AGM, despite the fact that the provision of services may have been physically completed earlier.

In view of the above, the date of supply would be triggered at the time the Board fees are known and the Independent Directors would be required to account for VAT accordingly. Further, the tax invoices would need to be issued within 14 days of the date of supply in accordance with Article 67 of the VAT Law.

Instances where the Board fees are known at the outset and involve periodic payments or multiple payments:

Where provision of Director services involves periodic payments or consecutive invoices, the
date of supply would be determined as per Article 26 of the VAT Law i.e. the date of supply would be earliest of:

  • Date of issuance of tax invoice;
  • The date 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.

Instances where Board fees are known at the outset but there are no periodic payments or multiple payments:

Where there are no periodic payments or consecutive invoices, the date of supply would be determined as per Article 25 of the VAT Law.

Accordingly, the date of supply would be the earliest of:

  • Date of issuance of a tax invoice;
  • The date on which the provision of services was completed;
  • Date of receipt of payment.