Question Using Multiple Companies to Optimize VAT

[rowena]

Hello,
I sell digital products and have a UAE company also another company in a different country with 0% VAT.

I spend a good amount of money on advertising via Facebook and Google. The thing is I need to pay %5 import VAT if spend via my UAE company. I'm thinking to move my all advertising operations to my other company in another country. Facebook and Google will invoice my other company and I'm not going to pay VAT(0%) but those ads are related to the products of the UAE company. What do you think about this structure?

 

[ShillGates]

fb and google uae charging you 5% vat? then uae company can be vat registered and you just claw it back.

 

[rowena]

fb and google uae charging you 5% vat? then uae company can be vat registered and you just claw it back.

If you put your VAT number to FB/Google they will not charge you 5% but it is your responsibility to pay the import VAT.

My all sales are 0% VAT because they're export, I don't collect VAT from customers that's I believe I can't recover any VAT.

 

[For Free]

Hello,
I sell digital products and have a UAE company also another company in a different country with 0% VAT.

I spend a good amount of money on advertising via Facebook and Google. The thing is I need to pay %5 import VAT if spend via my UAE company. I'm thinking to move my all advertising operations to my other company in another country. Facebook and Google will invoice my other company and I'm not going to pay VAT(0%) but those ads are related to the products of the UAE company. What do you think about this structure?

@rowena, your structure is ok if you use other company's account to run advertising for UAE business even worldwide. I spent a lot of money to pay to Facebook Ireland but under my friend BM account and no problem for VAT. Beware that Facebook may put VAT on the amount you spend in some countries, but also leave other countries to collect VAT by themselves. Check the account and policies to ensure there is no VAT on it

 

[JohnLocke]

My all sales are 0% VAT because they're export, I don't collect VAT from customers that's I believe I can't recover any VAT.

If you don't charge VAT you need the customers full contact details in order to avoid it. That may be fine if it is B2B I'm not sure if the same apply if it is B2C.

 

[ShillGates]

If you put your VAT number to FB/Google they will not charge you 5% but it is your responsibility to pay the import VAT.

My all sales are 0% VAT because they're export, I don't collect VAT from customers that's I believe I can't recover any VAT.

no although it is 0% vat , it is 0%, so you claw it back. Lets say 100 aed import vat, and output 0 aed vat, then 100- 0 = 100 back

dont confuse with being exempt, ie if you do exempt supplies, then anything you buy to use in that exempt supply cannot be claimed back

In europe its like that as well - you buy from outside EU, then no vat to you, BUT you pretend as if you were charged. So 100 EUro + 20% vat = 20 vat "charged" and output also 20 -> 20 - 20 = 0, so although you didnt pay vat or recevied it, its a paper exercise. IF form inside europe - then supplier need a vat number from you to state 0% vat, again you file out some form etc...

 

[Dandyline]

Hello,
I sell digital products and have a UAE company also another company in a different country with 0% VAT.

I spend a good amount of money on advertising via Facebook and Google. The thing is I need to pay %5 import VAT if spend via my UAE company. I'm thinking to move my all advertising operations to my other company in another country. Facebook and Google will invoice my other company and I'm not going to pay VAT(0%) but those ads are related to the products of the UAE company. What do you think about this structure?

Yes, just spend the ad money through another company. Normal.