Manpower Services vs Visa Facilitation in UAE VAT
UAE brings simple tax policies for people and businesses. The country’s tax-friendly rules attract new companies from every corner of the world. UAE always tries to help organizations and people by giving them easy ways to handle daily life and business. The UAE FTA recently gave a new public rule about manpower services and visa facilitation under VAT. Many businesses feel confused about how to label their services and work out the correct value for VAT.
This guide helps you understand the difference between manpower and visa facilitation under VAT, with clear examples and tips from Mubarak Al Ketbi (MAK) Auditing.
Defining Manpower Services for VAT in UAE
Manpower services mean finding, hiring, and sending workers to a customer. If you do this job, you supply manpower services, and your supply counts for VAT in UAE.
When you provide manpower, you are responsible for things like:
- Paying wages and salaries to your employees,
- Watching their performance at the customer’s office,
- Having control over all workers you send to other companies,
- Setting up each worker’s job and fixing working hours.
If you offer these manpower services, you must follow all UAE VAT rules on your supplies.
Valuing Supplies in Manpower Services
You must add up all the money you get, or expect to get, from the customer. This total includes any payment for wages and salaries paid directly to your staff.
Example:
Suppose Company X supplies manpower to Company Z. Company X holds the work visas and sends its employees to Company Z. It doesn’t matter if Company Z pays the workers directly. Company X still counts as the supplier of manpower services.
So, Company X should add all salaries and other payments in the total supply value, then calculate VAT on this sum, minus the VAT itself.
Understanding Visa Facilitation for UAE VAT
Visa facilitation services are different from manpower services. If you supply visa help, you must follow a set of rules:
- The facilitator and the customer are from the same corporate group, but not the same tax group,
- Both companies work under the same ownership or structure,
- If you break this rule, it becomes a manpower service.
You also must NOT:
- Offer any manpower services to outside people,
- Take care of employment duties for workers (the customer is responsible for the staff, not you),
- Sponsor workers only for the customer. If workers serve other companies too, it’s a manpower service, not visa facilitation.
If you meet all these points, you supply visa facilitation, not manpower, for VAT.
Valuing Supplies for Visa Facilitation
When you supply visa facilitation, the value is the amount you charge the customer, plus any expense you get back, like typing fees, medical test costs, or Emirates ID charges.
This value doesn’t include salaries, allowances, or benefits paid to the employees, because the customer takes care of those.
Special VAT Valuation Rules to Know
Sometimes, you face special cases:
- Related parties:
If you don’t charge the market fee, and your customer can’t claim the full input VAT, you must use the market value for your supply, even if you charged less. - No fee charged:
If you provide a service for free, it is usually a deemed supply (still counts for VAT) unless you qualify for an exception. But if you don’t claim input VAT for the supply, it’s not deemed supply.
How to Improve VAT Handling with MAK Auditing
Many companies struggle with UAE VAT rules. Mubarak Al Ketbi (MAK) Auditing helps you keep things easy. Our team gives you:
- Personal VAT solutions,
- Help with compliance,
- Training to handle VAT the right way,
- Guidance on valuing your services under new FTA rules,
- Tips for making your VAT records simple and clear.
What Can Help? – Mubarak Al Ketbi (MAK) Auditing
When you need a hand to keep your business safe and VAT-ready, Mubarak Al Ketbi (MAK) Auditing stands by your side. We’ll show you how to cut through the red tape and keep you away from trouble because we know “it’s better to be safe than sorry.”
For more information:
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Contact/WhatsApp: +971 50 276 2132
