Board Of Director Fees
The General Authority of Zakat and Tax (GAZT) has announced that Board of Director fees are not subject to VAT.
GAZT issued a statement on 14 April 2019 that remuneration and amounts collected by natural persons as a member of the board of directors of companies, government institutions or if they are appointed as members of committees or any other similar bodies are not be subject to VAT. Hence, such board members (natural persons) will not be required to register for VAT in KSA, charge VAT or issue a Tax Invoices for the performance of their services done under the capacity of directors.
This statement was issued by GAZT after reviewing the matter where it was concluded that the members of the Board of directors or Board of committees or any such similar bodies are not completely independent of the company they represent and hence they do not qualify as taxable persons.
GAZT has also stated that this tax implication is applicable retrospectively from the date of introduction of VAT in KSA.
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