Public Clarification No. 38 (Manpower vs Visa facilitation services)

This is like an exception to manpower services. A supply would not be treated as a supply of manpower services but instead, as a supply of visa facilitation services when all the following conditions are satisfied:

1.The employment visa holder (“Facilitator”) and the Customer are part of the same corporate group but are not part of the same tax group. (If it is under the same tax group then such supply would be out of scope in VAT)

Here, a question arises: what is the corporate group?

These are companies operating in the same corporate structure, which includes common ownership of the companies specified under clause (2), article (9) of Executive Regulation.

2. The Facilitator’s business activities do not include the supply of manpower.

This means if the facilitator supplies any manpower services to any person the condition will not be met.

3. The facilitator is not responsible for any of the obligations related to the employee

As a part of visa facilitation, customers take responsibility for the following obligations:

• Payment of an employee’s salary.
• Payment of other monetary benefits, including financial incentives, annual flight allowances, and housing allowances.
• Provision of medical insurance and accommodation

So, the customer has to pay all these employee obligations.

And facilitator’s obligation is limited to incurring the cost relating to obtaining the employment visa

4. The Facilitator sponsors these employees to exclusively work for and under the supervision and control of the Customer.

Implies that employees exclusively work for the Customer and are under that Customer’s supervision and control, this condition would be met.

If any of the conditions above fail to be met by the facilitator, then such supply shall be treated as a supply of manpower services

Nature of Supply: Visa facilitation services are also regarded as taxable supply in UAE

Value of Supply: Value of facilitation services differ from value of manpower services

Here Value of supply = amount changed for the services which could include the recharge of expenses such as typing fees, medical tests and issuance of employee Emirates IDs

The value of the supply of visa facilitation services excludes the employee’s salary, annual flight allowance, and any other monetary benefits, as these are the obligation of the customer.

In short, what FTA trying to differentiate here is the value of supply between these two services i.e. manpower Vs visa facilitation services, which can be summaries below;