New VAT laws in UAE likely to affect players’ salaries

Even the franchises earnings are bound to be taxed.

Virat Kohli IPL
Virat Kohli. (Photo Source: Twitter)

The 13th edition of the Indian Premier League (IPL) is in progress in style. The league has entered into its third week even as the action is getting more intense with almost all the teams finding their best XI. Amidst COVID-19 pandemic, the tournament is currently going on and so far, things seem to be fine in the bio-bubble. But the BCCI and the franchises have faced a bit of stick in terms of monetary gains with IPL being played in the UAE.

There is no gate money for the franchises either with the tournament being played behind closed doors. However, the stakeholders are likely to get stumped by the new taxation laws in the UAE. The earnings of the players and franchises can be taxed as per the new norms in the Middle-East nation.

The new Value Added Tax laws were introduced in the UAE back in 2018 and according to it, any service provided in the nation is taxed. As per these laws, all the players earnings are bound to be taxed. However, no such tax existed in 2014 when 20 matches of the IPL were played in the country.

“As per the new taxation norms in UAE, VAT will be levied on the IPL player salaries as they are providing services to the franchises”, one of the representative of Shuraa Tax Consultants based out of UAE told InsideSport.

IPL franchises clueless about the law

Meanwhile, the IPL franchises and stakeholders are clueless about any such taxation in the UAE. “We don’t have any idea about any such taxation. No one has informed us about it. So as of now there will be no deduction in players’ salary”, said KXIP CFO LC Gupta. It is not yet known whether the BCCI has got into some understanding with the authorities for the exemptions in tax.

Moreover, only the players’ salaries will not be deducted but the franchises earnings are bound to be taxed as well. The board officials in Dubai are yet to comment on the matter and it remains to be seen if the BCCI comes up with any statement in this case.

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