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Dubai: Social media giant Facebook has announced all advertisements on its platform in the UAE will now be subject to a value added tax (VAT).

This means any individual or entity looking to advertise on Facebook will have to factor in an additional five per cent VAT on its services.

The move by Facebook follows the larger implementation of VAT in the UAE since January 1 2019.

Meanwhile, Facebook Business issued UAE users a notice to this effect.

“Due to an implementation of a value-added tax (VAT) in the United Arab Emirates, Facebook is now required to charge VAT on the sale of ads in UAE. All advertisers with a 'sold to' of United Arab Emirates that have not provided a tax registration number will be charged VAT at 5% on advertising services.

If you haven't already, here is how to update your account:

  1. Go to Account settings
  2. Add or confirm your state
  3. Add your 15-digit tax registration number
  4. It is important that you provide a valid tax registration number. We are legally required to verify this number with the UAE tax authority. Invalid tax registration numbers will be disregarded and as a result, you will be charged a 5% VAT on the purchase of ads.

For additional information, you can visit Facebook's 'help content'.

About VAT in UAE

According to Facebook Business, UAE ads are subject to 5% VAT. Basically this affects advertisers whose “Sold To” country on their business or personal address is set to UAE and have not added their TRN to their Facebook ad account.

Guide to advertising

To continue advertising on Facebook, go to your account settings and ensure that your business name, address (including state and business country) and TRN are updated.

Remember, entering a TRN isn't mandatory, however, if you're registered for VAT and provide your TRN you will not be charged by Facebook.

VAT is added whenever you're charged for your ads regardless of whether you're purchasing Facebook ads for business or personal purposes. If you pay for Facebook ads with a manual payment method, VAT will be applied when your ad account is funded.

View VAT charges on your Facebook ads receipts

Check how much you've paid in VAT for a specific charge by referencing your ad receipts in the Billing section of your Ads Manager.

To view receipts and manage billing information, you have to be the admin of the ad account.

Will VAT be included in my daily budgets for my campaigns?

Your daily budget doesn't include any VAT you'll be charged for your ad purchases. If you're subject to VAT, the total amount you're charged including VAT may exceed your daily budget.

Will I be charged tax on my purchases of Facebook ads?

Whether you're charged VAT or goods and service tax (GST) on your Facebook ad purchases depends on whether you're purchasing ads for business purposes and the country of your residence.