The Clarification discusses the VAT principles for differentiating between a disbursement and a reimbursement, and accordingly the VAT treatment that should be applied to disbursement and / or reimbursement of expenses.
The term “reimbursement” refers to the recovery of expenses that you incur as a principal. The term disbursement, on the other hand, refers to the recovery of payments made on behalf of another person.
A disbursement of expenses is out of scope of VAT, however reimbursement of expenses falls within the scope of VAT.
Another clarification issued by Federal Tax Authority is towards Supplies of options in respect of debt securities and equity securities in return for premiums which are exempt from VAT.
Source – Federal Tax Authority
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