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VAT-free special offers

 alnuaimi  July 26, 2021

 844  Closed

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Numerous retailers are offering “VAT-free special offers” as promotions to entice prospective buyers to purchase goods or services within a promotional period.

Referring to “VAT-free special offers” is misleading and contrary to the VAT legislation since the goods or services are not actually supplied free of VAT.

This Public Clarification clarifies the VAT treatment of promotions where the seller absorbs VAT on promotional goods. For purposes of this clarification, the term “promotional goods” refers to goods that are sold as part of a special promotion.

VAT registered businesses should not advertise taxable goods or services as free of VAT or sell such goods or services without accounting for 5% VAT, except where the supply qualifies for zero-rating.

For more information on these services, please contact us:

Tel: +971 43 23 1183
Mob: +971 55 899 5971
E-mail: mail@alnuaimiauditors.com