Does UAE VAT apply to digital marketing services?

My business is planning to hire a digital marketing agency in the UAE, but I am unsure about the tax implications. Does UAE VAT apply to digital marketing services, and how does it affect the overall cost?

Over the last few years working in Dubai's Digital Marketing industry, I’ve seen VAT become a surprisingly common point of confusion when clients compare agency quotations. A UAE VAT-registered agency generally charges the standard 5% UAE VAT on digital marketing services, unless a specific zero-rating or exemption applies. The FTA confirms that taxable goods and services are generally taxed at 5%.

For example, if an agency quotes my business AED 10,000 for SEO, Social Media Management or Digital Advertising services, I would expect the invoice to show AED 10,000 + AED 500 VAT = AED 10,500. The VAT is collected by the agency and accounted for to the Federal Tax Authority. A UAE-resident business generally has to register for VAT once taxable supplies and imports exceed AED 375,000 over the previous 12 months or are expected to exceed that amount in the next 30 days. Voluntary registration starts at AED 187,500.

Before I partner with an agency, I always clarify whether the quoted price is VAT-inclusive or VAT-exclusive. I also check that the agency provides a proper tax invoice and displays its TRN. For overseas digital marketing providers, the treatment can differ, including potential reverse-charge rules, so I would not assume the same calculation applies.