The Federal Tax Authority (FTA) has issued a clarification on how the 5% Value Added Tax (VAT) applies to deals involving sports players in the UAE.
According to the FTA, the VAT treatment depends on the structure and nature of the agreement between the player and the club. Each case is assessed individually based on the terms of the contract.
If the player is employed by the club and receives a salary or allowances, these payments are not subject to VAT. However, if the arrangement is a service contract, where the player provides specific services to the club, the transaction falls under VAT at 5%.
The FTA emphasized that player transfers and related payments may be subject to VAT if they meet the criteria for taxable supplies, as outlined in Federal Decree-Law No. (8) of 2017 on Value Added Tax and its executive regulations.
Introduced in January 2018, VAT in the UAE applies to most goods and services at a standard rate of 5%, with certain sectors like healthcare, education, and exports either exempt or zero-rated.
Recent data from the 2024–2025 UAE Pro League winter transfer window showed total football transfer deals reaching AED 141 million, with Arab players representing AED 82.5 million of that amount.
Since the introduction of VAT, the UAE has achieved significant progress in diversifying revenue streams, strengthening fiscal stability, improving public service funding, and enhancing transparency and compliance across all business sectors, including sports.
✅ Key takeaway: The VAT treatment of athlete contracts in the UAE depends on whether the player is considered an employee or a service provider, making it essential for clubs and athletes to review their contract structures carefully.
