Is VAT charged on management fees charged within a group?

Answered by TI from the Federal Tax Authority’s own law · 15 September 2026. Guidance, not tax advice: rely on the official text.

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It depends on whether the group is a registered VAT group. If it is, no VAT is charged between the group companies. If it is not, the management fee is a taxable supply, so you charge 5% VAT on it.

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The detail

If the companies are in the same approved VAT group (treated as a single taxable person), a management fee between them is not a supply for VAT purposes, so no VAT is charged. If the companies are not in a VAT group, the fee is the consideration for a taxable supply of services and is standard-rated at 5%, even between related parties. When the fee is below market value and the recipient cannot fully recover its input tax, VAT must be levied on the market value instead.1 2

What the law says

Under the GCC framework, a VAT group (two or more resident legal persons treated as one taxable person) makes supplies within the group invisible to VAT, since the group is a single taxable person.1
FTA guidance confirms that a service supplied between companies in the same corporate group is a taxable supply on which VAT is charged, and where the fee is below market value and the customer cannot fully recover input tax, the value of supply is the market value.2 Based on FTA guidance

What it depends on

The 'no VAT on intra‑group supplies' treatment only applies if the parties are members of the same recognised VAT group.1
If not in a VAT group and the fee is charged at below market value to a customer with restricted input recovery, VAT is due on the market value, not the actual fee.2 Based on FTA guidance

Check before you rely on it

Confirm whether the companies are registered as one VAT group.
Check the fee actually charged reflects market value.

Note: Whether a specific management fee qualifies for an exemption (for example, an exempt financial service) cannot be confirmed from the supplied sources, which do not cover the general exception list.

Sources (2) — read the official text

1Common VAT Agreement of the States of the Gulf Cooperation Council…Article 4GCC Agreement

Article (4)

Read the article
Article (4) VAT Group Each Member State may treat the VAT Group as a single Taxable Person in accordance with the rules and conditions it puts in place for that purpose. A VAT Group means two or more Corporate Persons who are Residents of the same Member State. Chapter Two Supplies within the Scope of the Tax

Official PDF, p. 4Captured from the FTA website on 9 Sep 2026
2Manpower vs Visa Facilitation ServicesFTA guidance

Read the article
3 قيمة التوريد – األطراف المرتبطة Value of Supply – Related parties3 Since the first condition for visa facilitation services نظرا ا ألن الشرط األول لخدمات كفالة الموظفين يتمثل في is that the supply must be made within the same ،أنه يجب أن يتم التوريد داخل ذات مجموعة الشركات corporate group, a special valuation rule applies if فتُطبق قاعدة قيمة توريد خاصة في حال عدم قيام الكفيل .بفرض رسوم مماثلة للرسوم المفروضة في السوق the Facilitator does not charge a market related fee. If the Facilitator charges a fee that is less than في حال قيام الكفيل بفرض رسم أقل من القيمة السوقية وكان market value and the Customer is not entitled to فإن قيمة،ال يحق للعميل استرداد ضريبة المدخلت بالكامل 7 ،6.التوريد تكون هي القيمة السوقية للتوريد full input recovery, the value of supply is the market value of the supply.6 , 7 In such instance, the Facilitator is required to يتعين على الكفيل فرض ضريبة القيمة،في هذه الحالة impose VAT on the market value of the supply, بصرف النظر عن،المضافة على القيمة السوقية للتوريد .المبلغ الفعلي المفروض نظير خدمات كفالة الموظفين regardless of the actual amount charged for the visa facilitation services. If the Facilitator charges the Customer a fee that is إذا فرض الكفيل على العميل رسما ا مساوياا للقيمة السوقية equal to the market value of the supply, the fees فسوف يُنظر للرسوم المفروضة على أنها مقابل،للتوريد 8.لتوريد الخدمات الخاضعة للضريبة charged would be regarded as consideration for the taxable supply of services. 8 قيمة التوريد – في حالة عدم فرض رسم Value of Supply – No fee is charged If the Facilitator provides the visa facilitation ،إذا قدم الكفيل خدمات كفالة الموظفين لعميله دون مقابل services to its Customer for no charge, the supply وذلك ما لم يُطبق10 ،9،فسوف يُشكل التوريد توريدا ا اعتبارياا would constitute a deemed supply,9,10 unless one .أي من االستثناءات ذات الصلة of the relevant exceptions applies. The supply would not be regarded as a deemed لن ينظر إلى التوريد على أنه توريد اعتباري إذا لم يقم الكفيل supply if the Facilitator did not recover any input 11.باسترداد أي ضريبة مدخلت تم تكبدها إلجراء التوريد tax incurred to make the supply.11 This includes ويشمل ذلك التكاليف المباشرة (مثل ضريبة القيمة المضافة direct costs (e.g. VAT charged on typing fees) as المفروضة على رسوم الطباعة) وكذلك التكاليف غير 10/14

Official PDF, p. 10Captured from the FTA website on 9 Sep 2026

Helpful?

It depends on whether the group is a registered VAT group. If it is, no VAT is charged between the group companies. If it is not, the management fee is a taxable supply, so you charge 5% VAT on it.

What the law says:
- Under the GCC framework, a VAT group (two or more resident legal persons treated as one taxable person) makes supplies within the group invisible to VAT, since the group is a single taxable person. [1]
- FTA guidance confirms that a service supplied between companies in the same corporate group is a taxable supply on which VAT is charged, and where the fee is below market value and the customer cannot fully recover input tax, the value of supply is the market value. [2]

What it depends on:
- The 'no VAT on intra‑group supplies' treatment only applies if the parties are members of the same recognised VAT group. [1]
- If not in a VAT group and the fee is charged at below market value to a customer with restricted input recovery, VAT is due on the market value, not the actual fee. [2]

Check before you rely on it:
- Confirm whether the companies are registered as one VAT group.
- Check the fee actually charged reflects market value.

Note: Whether a specific management fee qualifies for an exemption (for example, an exempt financial service) cannot be confirmed from the supplied sources, which do not cover the general exception list.

Sources:
1. Common VAT Agreement of the States of the Gulf Cooperation Council… — Article 4
2. Manpower vs Visa Facilitation Services — p. 10

Written by AI from the FTA sources above and checked before display. Not tax advice or official FTA information - confirm with a tax adviser before you act. Full disclaimer

Is VAT charged on management fees charged within a group?

The detail

What the law says

What it depends on

Check before you rely on it

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