FTA publishes new Public Clarification on ‘Mobile Phones, Airtime, and Data Packages Made Available to Employees for Business Use’

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UAE- December 14, 2021:

Due to COVID-19, there has been an increase in work-from-home arrangements, resulting in some instances where employers pay for Phones, Airtime, and Packages’ expenses to allow employees to perform their roles remotely. Many businesses enter into agreements with telecommunication service providers to make mobile phones, airtime (call minutes) and data packages available to their employees to perform their roles outside office hours or at locations away from the office.

In this regard, the UAE Federal Tax Authority (FTA) published a new VAT Public Clarification (VATP028) that provides guidance on the application of the VAT legislation in respect of the recovery of input tax incurred on Phones, Airtime, and Packages acquired for business use.