VAT on Samples/Gifts
Goods or services obtained for commercial purpose but then used for private use, or used as gift or samples, are referred to as considered supplies
VAT will be charged on the sales but the gifts with smaller value under 500 AED are VAT exempt. The limit here is 500 AED, and the following conditions apply to this exception.
- The goods supplied to recipients does not exceed AED 500.
- The AED 500 threshold is determined within 12 months’ time period.
- A supply made is to be used as samples or commercial gifts.
Samples that are held to give consumers an idea of what the commodity looks like are also excluded from VAT and are not considered as deemed supplies.
A supply is not considered as deemed in the following cases:
- If no Input Tax was recovered for the related Goods and Services.
- If the supply is an Exempt Supply.
- If the recovered Input Tax has been adjusted for the Goods and Services pursuant to the Capital Assets Scheme.
- If the value of the supply of the Goods, for each Recipient of Goods within a 12-month period, does not exceed the amount specified in the Executive Regulation of this Decree-Law, and the Goods were supplied as samples or commercial gifts.
5. If the total Output Tax due for all the Deemed Supplies per Person for a 12-month period is less than the amount specified in the Executive Regulation of this Decree-