News Update

FTA released a decision on 'The Mechanism for Calculating the Average Retail Selling Price of Excise Goods in the Market'

Date: 10 May, 2021

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External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Legislation/Excise-tax/FTA-Decision-No-1-of-2021-on-the-mechanism-of-calculating-the-ARSP-of-Excise-Goods.pdf

Dubai- May 10, 2021:

In order to calculate the average retail selling price of the excise goods in the market, the FTA has released a decision approved by the Board of Directors’ at its 15th meeting held on 20 April 2021.

For the purposes of Clause 2 of Article 14 of Cabinet Decision No. 52 of 2019, a Taxable Person shall undertake the procedures outlined in the document for the purpose of identifying the Designated Retail Selling Price as per the sequence mentioned.

Click here to view the Federal Tax Authority Decision No. 1 of 2021 (Unofficial translation) – Issued on 28th April 2021.

UAE reduces penalties on VAT, excise tax to cope with Covid-19 impact

Date: 09 May, 2021

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External URL: https://www.khaleejtimes.com/news/government/covid-impact-uae-reduces-penalties-on-vat-excise-tax

Dubai- May 9, 2021:

The UAE has reduced penalties on value-added tax (VAT) and excise tax in order to help companies and individuals better cope with the impact of the Covid-19 pandemic. According to newly-released Cabinet Decision No. 49 of 2021, tax payers who currently have penalties pending can see those reduced to 30 per cent, provided they settle them before December 31, 2021.

Going forward, late payment penalties will be reduced to four per cent per month, a substantial reduction from one per cent per day while an overall cap stays at 300 per cent.

The new provisions will be applicable 60 days as from April 28, 2021.

For more information click here.

Read : The top 8 list of VAT fines and penalties levied by FTA.

FTA releases New Public Clarification on VAT registration of Sole Establishments

Date: 08 May, 2021

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External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/VATP026---Sole-Establishments---Legal-and-Natural---05-05-2021.pdf

Dubai- May 8, 2021:

The FTA (Federal Tax Authority ) issued guidance on the value added tax (VAT) registration for sole establishments and sole proprietorships.

A natural or legal person may own a number of sole establishments. There has been uncertainty on whether each sole establishment needs to obtain a separate VAT registration or whether all such establishments should be included under one VAT registration. The Public Clarification released clarifies the VAT registration obligations of a person in respect of its sole establishments.

A person owning a number of sole establishments should obtain only one VAT registration for all its sole establishments, and it is not permissible to register each sole establishment separately for VAT.

This does not apply to a one-person company LLC or other similar legal entities that are seen as distinct and separate legal persons from their owners.

The FTA will review in certain cases the VAT registrations by taxable persons in respect of sole establishments and will inform them of the corrective steps to be taken, if any.

JAFZA extends deadlines for submission of the Notification form and ESR

Date: 06 May, 2021

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Dubai- May 6, 2021:

The Jebel Ali Free Zone (JAFZA) released revised closing dates for the submission of Notification and Economic Substance Report (ESR) by businesses under the Economic Substance Regulations. The Regulations require UAE onshore and free zone companies and certain other business forms that carry out relevant activities to submit the annual Notification form and ESR to their relevant regulatory authority.

    JAFZA has extended these deadlines for firms falling under its purview. The revised deadlines are six months after the financial year-end for the Notification Form and 12 months after the financial year-end for ESR. However, business are requested to file documents on the portal of the Ministry of Finance as soon as possible and not wait until the deadline, to avoid any compliance penalties and fines.

    If you require advice on document submissions or other compliance with ESR regulations, you may get in touch with our tax experts.

    Financial year-endNotification filing deadlineESR filing deadline
    March 31, 2020January 31, 2021 (extended deadline)March 31, 2021
    April 30, 2020January 31, 2021 (extended deadline) April 30, 2021
    May 31, 2020January 31, 2021 (extended deadline)May 31, 2021
    June 30, 2020January 31, 2021 (extended deadline)June 30, 2021
    July 31, 2020January 31, 2021July 31, 2021
    August 31, 2020February 28, 2021August 31, 2021
    September 30, 2020March 31, 2021September 30, 2021
    October 31, 2020April 30, 2021October 31, 2021
    November 30, 2020May 31, 2021November 30, 2021
    December 31, 2020June 30, 2021December 31, 2021
    January 31, 2021July 31, 2021January 31, 2022
    February 28, 2021August 31, 2021February 28, 2022
    March 31, 2021 September 30, 2021March 31, 2022
    April 30, 2021 October 31, 2021April 30, 2022
    May 31, 2021November 30, 2021May 31, 2022
    June 30, 2021December 31, 2021July 31, 2022

Bahrain: NBR releases guide on VAT Agent / VAT representative

Date: 06 May, 2021

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External URL: https://www.nbr.gov.bh/publications/view/VAT_Agent_VAT_Representative_Guide

Bahrain- May 6, 2021:

National Bureau for Revenue (NBR) in Bahrain published a guide in April 2021 on VAT agent or VAT representative.

A VAT agent is a person who is authorized by the NBR to act as an agent on behalf of a VAT payer in his name and on his behalf in relation to the VAT payer’s compliance obligations. It is a voluntary appointment by the tax payer subject to the agent being authorized by NBR.

Non-resident VAT payers who are obliged to register for VAT in Bahrain have the option to appoint a VAT representative. A VAT representative replaces the VAT payer and becomes responsible for all the VAT payer’s obligations towards the NBR.

The VAT Agent / VAT Representative Guide provides guidance and further clarification to those who would like to become a VAT Agent or Representative in Bahrain and the the criteria that must be met. Any person who is interested in becoming a VAT agent or VAT representative should go through this Guide to understand the conditions and the procedure that must be followed.

The guide provides an overview of

  • The requirements for obtaining NBR’s approval for getting registered as VAT agent/representative.
  • Rules and procedures for VAT payer to appoint a VAT agent/representative.

For any queries reach out to our tax experts.

Saudi Arabia to reconsider VAT upon GDP growth

Date: 04 May, 2021

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External URL: https://www.khaleejtimes.com/region/mena/saudi-arabia-to-reconsider-vat-after-achieving-economic-objectives

Riyadh- May 4, 2021:

The Kingdom of Saudi Arabia will reconsider value-added tax (VAT) after it has achieved certain objectives related to its economy and economic growth, a senior official has said.

The decision to increase VAT from 5 % to 15 % from July 1, 2020 was taken by the Saudi government in response to the economic impact of Covid-19 and the decline in revenues from lower oil prices. The Minister of Finance Mohammed Al-Jadaan has said that tripling value-added tax (VAT) to 15% was the best among the tough choices the government took during 2020.

He affirmed that taxes are an essential part of non-oil-dependent countries, indicating that the government’s goal is to expand the economy to reduce the economic burden, off the shoulders of their nationals or the private sector.

“Saudi Arabia will reconsider the value-added tax upon achieving certain objectives, such as the Kingdom’s gross domestic product (GDP) growth, economic broadening, and a steady rise in oil price,” Al Jadaan said.

Click here to read more.

Zero VAT for transportation of goods and services in Oman’s special zones

Date: 04 May, 2021

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External URL: https://opaz.gov.om/en/news/2021/sezad-and-free-zones-in-salalah-sohar-and-al-mazunah-are-classified-special-zones

Muscat- May 5, 2021:

SEZAD and free zones in Salalah , Sohar, and Al Mazunah are classified as Special Zones and the supply and transportation of goods and services are zero-rated of VAT.

The Public Authority for Special Economic Zones and Free Zones ( OPAZ ) said, ‘The Special Economic Zone at Duqm ( SEZAD ) and the free zones in Salalah , Sohar and Al Mazunah are classified as Special Zones in accordance with the provisions of Article ( 102 ) of the Executive Regulations of the Value Added Tax ( VAT ), issued in the Decision No ( 2021/53 ). This announcement comes post the coordination with the Tax Authority in regards to the implementation of VAT.’

In accordance with the conditions specified in the Article ( 103 ) of the regulations, all these special zones are subject to 0 % tax.

Therefore, OPAZ calls on all companies, enterprises, businesses and establishments operating in these zones to comply with the conditions stipulated in the VAT Executive Regulations, until the Tax Authority of Oman publishes detailed procedures for the purposes of applying VAT at a rate of zero percent in the Special Zones. These conditions include VAT Registration and VAT Administration.

UAE ranked among the top 10 in 28 competitive indicators for the financial and tax sector

Date: 03 May, 2021

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External URL: https://wam.ae/en/details/1395302931770

Abu Dhabi- May 3, 2021:

Five of the major international institutions specialized in assessing competitiveness have ranked the UAE among the top 10 in the world in 28 indicators of competitiveness in the financial and tax sector.

This was highlighted by a report by the Federal Competitiveness and Statistics Centre (FCSC), which documented the rankings of the IMD World Competitiveness Yearbook, the Legatum Prosperity Index, the World Economic Forum’s Travel and Tourism Competitiveness Report, the Global Talent Competitiveness Index (GTCI) and the Global Competitiveness Index 4.0. The report states that the UAE was ranked first in the Real Personal Taxes Index, the Collected Personal Income Taxes Index, the Low Tax Evasion Rate Index, the Collected Indirect Tax Revenues Index, the Lack of Wastefulness in Government Spending Index and the Best Time to File Tax Returns Index.

The UAE was also ranked second globally in the areas of corporate tax collection, real increase in government expenditures, and collection of capital and real estate taxes, while it was ranked third in the areas of intergovernmental transfers, local central governmental debt and rate of low consumption taxes.

In early January 2018, the UAE implemented VAT at 5% on most goods and services that are supplied at every stage of the supply chain. Prior to that in 2017, an excise tax was applied to restrict the consumption of substances that affect health such as tobacco products and energy drinks.

At a time when many countries of the world tend to increase taxes on personal and corporate profits, the UAE ranked first in the world in the absence of income taxes and low rates of tax evasion which strengthens its eligibility to attract foreign investment.

Click here to view more.

FTA releases Real Estate Guide

Date: 02 May, 2021

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External URL: https://www.tax.gov.ae/-/media/Files/EN/PDF/Guides/Real-Estate-Guide-VATGRE1---EN---19-04-2021.pdf

Dubai- May 2, 2021:

Federal Tax Authority (FTA) releases ‘Real Estate Guide‘ that throws guidance on the VAT treatment of supplies of real estate, as well as various common transactions which occur within the real estate sector. The purpose of the document is to provide guidance on how VAT affects businesses which operate within the real estate sector, as well as for owners or landlords of real estate.

This document is meant for owners of commercial and residential real estate, landlords making supplies of commercial or residential real estate, and businesses operating within the construction industry, or making supplies which relate to real estate. Property managers and owners’ associations may also find this guide useful.

Saudi Arabia has no plans to introduce income tax: Crown Prince Mohammed Bin Salman

Date: 29 Apr, 2021

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External URL: https://gulfnews.com/world/gulf/saudi/saudi-arabia-has-no-plans-to-introduce-income-tax-crown-prince-mohammed-bin-salman-1.1619558916351

Riyadh- April 29, 2021:

Saudi Arabia has no plans to introduce income tax and the 15 percent VAT rate is a temporary decision for 5 years, Crown Prince Mohammed Bin Salman said in a TV interview. He also spoke on plans to eventually reduce the VAT rate, iterating that the move to increase the rate to 15 percent was a painful decision that he had to undertake.

In a wide-ranging TV interview to mark the fifth anniversary of the Saudi Vision 2030 strategy, the Crown Prince spoke about the Kingdom’s economic plans, developments and achievements made since the launch of Vision 2030, which aims to diversify the Kingdom’s economy without reliance on oil.

The Crown Prince explained figures related to housing policies, legislation and the private sector’s contribution to the Kingdom’s economy, reviewing many economic figures, most notably the growth reflected in the Saudi stock market index.

Speaking of the future, Mohammed bin Salman said “We would launch vision 2040 after achievement of goals of vision 2030. He also revealed that the Kingdom is in discussions to sell 1 percent of state oil firm Saudi Aramco to a leading global energy company. Aramco previously sold a sliver of its shares on the Saudi bourse in December 2019, generating $29.4 billion in the world’s biggest initial public offering.

Click here to read more.

UAE participates in 113th meeting of GCC Financial and Economic Cooperation Committee

Date: 28 Apr, 2021

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External URL: http://wam.ae/en/details/1395302928924

Abu Dhabi- April 28, 2021:

Obaid Humaid Al Tayer, Minister of State for Financial Affairs, participated in the 113th meeting of the GCC Financial and Economic Cooperation Committee, held virtually on April 22, 2021 and discussed strengthening financial and economic cooperation among GCC countries.

The Committee discussed the recommendations submitted by the GCC Committee of Monetary Authorities and Central Banks Governors during the 76th meeting; the 25th meeting of GCC Customs Union Authority; and the Gulf Market Committee at its 30th and 31st meetings.

Also discussed were the minutes of the 8th meeting of Committee of Heads and Directors of Tax Administrations in the GCC States; the budget for supporting joint activities and programmes to develop youth work in the GCC countries; and the G20 Finance Track’s initiatives that can be issued to the GCC countries. That, in addition to the decisions of the 41st Session of GCC Supreme Council and the decisions of the 21st meeting of the GCC Ministerial Committee of following up the implementation of the GCC Joint Work Decisions.

The committee reviewed the GCC Supreme Council’s decision on agreeing on a system of linking payments in the GCC countries; discussing the programme on achieving economic unity among the GCC countries by 2025; and discussing the issues proposed to the International Monetary Fund (IMF), which they will study and submit at the joint meeting of the GCC Financial and Economic Cooperation Committee, the GCC Committee of Governors of Monetary Institutions and Central Banks and the Director-General of the IMF.

It also reviewed the latest developments related to the GCC-Takamul system, which is an electronic gateway for complaints and enquiries related to the Gulf Common Market. The committee praised its experimental launch among the GCC countries, and asked member countries to provide the data of those in charge of the system in the ministries of finance to the General Secretariat. The official launch of the system will take place during the next meeting of the GCC Financial and Economic Cooperation Committee in October 2021.

Click here to read more.

FTA collects tax liabilities worth AED74 million in Q1-21

Date: 27 Apr, 2021

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External URL: http://wam.ae/en/details/1395302930003

Abu Dhabi- April 27, 2021:

The Federal Tax Authority (FTA) has conducted more than 2,707 field inspection visits through 35 inspection campaigns across UAE markets in the first quarter of 2021 (Q1-21). This is as part of its ongoing efforts to protect consumer rights and increase the level of tax compliance.

FTA revealed that 256 VAT violations were detected and 248 violations with a total value of AED74 million during Q1.

FTA Director-General, Khalid Ali Al Bustani, confirmed that the sophisticated, cutting-edge tools adopted by the authority during inspections enable teams to accurately carry out their tasks through the latest field electronic mechanisms which correspond to best practices. This contributes to tightening controls on UAE markets to prevent the sale, circulation, and stockpiling of products that have not fulfilled their Excise or VAT obligations.

One of these tools is the mandatory marking of tobacco and tobacco related products which came into effect on 1st January, 2019. It specified the requirement to place Digital Tax Stamp (DTS) on cigarette packs and tobacco products, including water-pipe tobacco and electrically heated cigarettes, after registering them in the FTA database. Each DTS contains data that can be read with a special device to ensure all taxes due on the products have been paid.

Al Bustani added, “The tax compliance rates that have been observed in the outcomes of the inspection campaigns carried out in the first quarter of 2021 highlight the success of the authority’s oversight efforts carried out in cooperation with the competent entities.”

Click here to read more.

Oman: Companies require certificate to collect VAT from customers

Date: 26 Apr, 2021

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External URL: https://timesofoman.com/article/100566-companies-require-certificate-to-collect-vat-from-customers-in-oman

Muscat- April 26, 2021:

All companies in Oman need to have a certificate of registration from the Tax Authority before charging customers value added tax (VAT) for goods and services. Those who do add the 5 percent VAT charge to customers without this certificate would be subject to penalties under the law.

According to an official at the organization, this is for all commercial enterprises including SMEs that offer goods or services subject to VAT. If owners of establishments that are not registered with the authority purchase goods from suppliers who have imposed VAT on them, they must retain all of the invoices of goods received, inclusive of VAT prices. The business must then register with the Tax Authority to obtain the registration certificate and commit to submitting tax declarations on time added the official.

VAT at the rate of 5 percent came into effect in Oman on April 16, 2021. The first round for companies to register for VAT took place between February 1 and March 15, 2021.

Although this period has elapsed, companies are required to register themselves in the second duration- April 1 to May 31, 2021.

Click here to read more.

Complete VAT guidance on the tax portal of Sultanate of Oman

Date: 25 Apr, 2021

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External URL: https://tms.taxoman.gov.om/portal/vat-tax

Muscat- April 25, 2021:

Oman Tax Authority has released guides on online registration and a list of most asked questions on VAT on their portal.

VAT Law

  • VAT Law Translation

VAT Regulations

  • VAT Regulation unofficial english version

Registration Forms

  • VAT Registration Application – For Resident no CRN
  • VAT Registration Application – For Non Resident

Manual Guides and FAQ’s

  • VAT – Individuals – FAQ
  • Information Sheet
  • VAT – Business – FAQ
  • Determining Food Items subject to Value Added Tax at Zero Rate
  • Determining the Mandatory and Voluntary Registration Thresholds
  • Determining the VAT Registration due Dates and Effective Dates
  • VAT Transitional Registration Guide
  • VAT Registration Manual Guide – Persons with CRN
  • Guide on VAT Non Resident Application

Click here to view the guides.

FTA holds 3 interactive sessions in Q1-21 as part of “Tax Clinic” initiative for SMEs

Date: 22 Apr, 2021

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External URL: https://www.tax.gov.ae/press-releases/FTA-holds--interactive-sessions-Tax-Clinic

Abu Dhabi – April 22, 2021:

The Federal Tax Authority (FTA) has held 3 interactive sessions via video conference, as part of the “Tax Clinic” initiative, a policy of direct communication with business sectors to promote tax awareness and avoid the most common errors while implementing tax procedures.

The awareness sessions held in Q1 of 2021focused on the small and medium enterprise (SME) sector. Teams of tax analysts and experts from the FTA’s Registration and Taxpayer Services Departments answered the inquiries of business representatives from across the emirates. The inquires were about tax registration and obligations. They also raised awareness of how to submit returns and pay tax dues without errors.

His Excellency Khalid Ali Al Bustani, Director-General of FTA, emphasized that the FTA is committed to ensure the security and safety of its employees and clients. It maintains constant interaction with those involved in the tax system by organizing webinars and meetings with its partners in the government/private sectors via video conference to adhere to social distancing norms imposed by Covid-19.

Click here to read more.

New edition of the ‘Basic Tax Information Bulletin’ on the Automotive sector

Date: 21 Apr, 2021

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External URL: https://www.tax.gov.ae/press-releases/New-edition-of-the-Basic-Tax-Information-Bulletin

Abu Dhabi – April 21, 2021:

The Federal Tax Authority (FTA) has announced in its latest edition of the Basic Tax Information Bulletin that motor vehicle repairs and maintenance services provided within the UAE are subject to VAT at the standard rate of 5%. This applies even if the costs are charged to an entity based outside the UAE. The new edition mainly targets businesses in the automotive sector, including new car dealers, used car dealers, and servicing and parts’ suppliers.

With regard to repair services and parts provided under a warranty, the FTA clarified that VAT is applicable on the sale of vehicles under warranty and warranty packages purchased separately by the customer. Any subsequent supply of repair services and parts to the owner of the vehicle under warranty is not subject to VAT, provided no additional amount is charged in respect of the repair service or parts.

As per the Bulletin, businesses in the automotive sector making taxable supplies are eligible for the full recovery of input VAT, with the exception of blocked items such as certain entertainment services and purchased, leased, or rented motor vehicles that are available for personal use.

Click here to read more.

FTA receives 2 new international accreditations in Information Technology and Information Security Management System

Date: 20 Apr, 2021

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External URL: https://www.tax.gov.ae/press-releases/ISO-certifications-in-Information-Technology

Abu Dhabi – April 20, 2021:

The Federal Tax Authority (FTA) has received two certifications “ISO 20000” and “ISO 27001” in the information technology services sector: ISO certification for IT Service Management and ISO certification for IT Security Management.

His Excellency Khalid Ali Al Bustani, FTA Director-General, emphasized that the two new certifications enhance confidence in the FTA’s IT services and electronic systems. They are being continuously improved to ensure data protection and improve its services in all sectors. This is being accomplished through the application of a comprehensive quality methodology to complete operations and document them via an integrated system approach.

The Director-General affirmed that FTA since its establishment has been keen to provide a sophisticated digital tax system according to the best international standards. This is to carry out all operations smoothly and facilitate the processes of registration, filing tax returns, tax payments and tax refunds, thereby allowing quick completion.

Click here to read more.

Oman: Zero VAT on 488 food items

Date: 12 Apr, 2021

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External URL: https://timesofoman.com/article/zero-vat-on-488-food-items-in-oman

Muscat – April 12, 2021:

Nearly 500 food products commonly used by people in Oman will be subject to zero taxation under the Value Added Tax, once it comes into effect.

The measure is part of the Social Security Scheme issued by His Majesty Sultan Haitham Bin Tarik, and developed by the Ministry of Commerce, Industry, and Investment Promotion, in association with other government bodies.

Under the scheme, the number of basic food commodities charged a zero rate VAT will be increased to 488 from 93.

Furthermore, all VAT charges related to electricity consumption for citizens who have up to two residential category subscriptions will be paid by the government. VAT is expected to come into effect across the country on April 16.

Click here to read more.

UAE MoE extends anti-money laundering (AML) compliance date until 30th April for selected businesses

Date: 11 Apr, 2021

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External URL: https://www.khaleejtimes.com/business/banking-finance/uae-anti-money-laundering-registration-for-non-financial-entities-individuals-extended-until-april-30

Dubai- April 11, 2021:

The UAE Ministry of Economy announced the extension of the deadline granted to companies in the “specific non-financial business and professions” sector to register in government regulations approved for countering money laundering and combating the financing of terrorism until the end of April 2021.

The decision is due to the large numbers of companies in the sector seeking to register in the last days of the previous deadline, which expired on March 31, taking into account the conditions of companies and the business sector in general during the period of the Covid-19 pandemic.

Click here to read more.

FTA released a basic tax information bulletin on Automotive Sector

Date: 09 Apr, 2021

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External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/Bulletin-AUTOMOTIVE-SECTOR-30Mar.pdf

Dubai- April 9, 2021:

FTA released a basic tax information bulletin on Automotive Sector meant for new car dealers, used car dealers, servicing and part’s suppliers.

The bulletin clarifies that supplies made by businesses in the automotive sector are generally subject to VAT, including but not limited to:

  • Sales of new and used cars
  • Sales of car parts
  • Service centers’ services, warranties, and related insurance products

Supplies of qualified means of transport, such as buses that are designed or adapted for public transportation of 10 or more passengers and are actually used for public transportation are, however, zero-rated for VAT purposes.

For further clarification contact our tax experts.

FTA released public clarification VATP025 on 'Temporary Zero-rating of Certain Medical Equipment'

Date: 08 Apr, 2021

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External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/VATP025---Zero-rating-certain-medical-equipment---06-04-2021.pdf

Dubai- April 8, 2021:

The Federal Tax Authority has published public clarification VATP025 on “Temporary Zero-rating of Certain Medical Equipment”.

The key highlights are:

  • The date is extended till 31st December-2021 for VAT at the rate of 0% on certain supplies and import of medical equipment.
  • After 31st December-2021 if there is any supply then normal procedures shall apply.

View the list of guides here.

For further clarification contact our tax experts.

FTA released public clarification VATP024 on bad debt relief adjustment

Date: 06 Apr, 2021

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External URL: https://www.tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/VATP024---Adjustment-on-account-of-Bad-Debts---17-03-2021.pdf

Dubai- April 6, 2021:
FTA has published a public clarification VAT P024 on bad debt relief adjustment. The key points of VATP024 are as follows:

  • In the event a supplier does not receive payment from the customer, the supplier may adjust the output vat on the bad debt subject to certain conditions as follows.

– VAT charged and accounted for on the supply (to FTA via tax returns).
– Consideration should have been written off in full or part.
– A duration of six months should have passed from the date of supply.
– Supplier has notified the customer that the amount has been written off.

  • Bad debt relief can only be taken to the extent of consideration written off in the accounts.
  • During the six months period, FTA considers that supplier should engage with customer to recover the debt.
  • The supplier is required to notify the customer and communicate via a letter, email or post to the customer stating the amount of consideration that has been written off. The notification to the customer for the write-off must include:

– Invoice number and date of invoice which has not been paid.
– Amount of consideration which has been written off.
Note:

  • It may not be necessary to obtain an acknowledgment from the customer. However, it is prudent to retain the evidence of having sent the notification.
  • The adjustment on account of bad debt relief should be made in the “Adjustment column” of Box 1 of the VAT Return. The adjustment amount should be the VAT amount only

These key highlights are for your information only and should require further advice, kindly get in touch with our tax experts.

Oman: Few medicines, medical equipment exempted from VAT

Date: 05 Apr, 2021

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External URL: https://www.omanobserver.om/some-medicines-medical-equipment-exempted-from-vat/

Muscat- April 4, 2021:

The Head of the Tax Authority has issued decision 57/2021 that outlines certain medicines and medical equipment would be subject to value-added tax (VAT) at zero rate. Based on VAT Law promulgated by Royal Decree and based on the requirements of the public interest, it was decided:

Article 1:

Supplies of medicines, herbal medicines, biological preparations, health (hygienic) preparations, food for medical use and medical equipment are subject to value-added tax at zero rates provided a release permit is issued by the Ministry of Health in accordance with the customs code.

Article 2:

This decision shall be published in the Official Gazette and be enforced from April 16, 2021.

Click here to read more.

Oman's Tax Authority slams income tax application rumours on social media

Date: 31 Mar, 2021

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External URL: https://timesofoman.com/article/tax-authority-slams-social-media-rumours

Muscat- March 31, 2021:

The Tax Authority in Oman has denied the application of income tax for individuals starting from 2022 and has clarified that it is a rumour being circulated on social media.

Further, Oman’s Tax Authority in a statement issued online confirms that no official statement or decision has been issued in this regard. The matter is still under study according to what is announced in the medium-term fiscal balance plan. Therefore we note to verify the source of the information through official communication channels.

Click here to read more.

Oman: Certain sectors exempted from tax till December 2021

Date: 29 Mar, 2021

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External URL: https://gulfnews.com/world/gulf/oman/oman-exempts-some-sectors-from-tax-until-end-of-year-1.78123114

Muscat- March 29, 2021:

As per local media reports, certain sectors such as hotels, tourist restaurants, cinemas, amusement and entertainment centres will be exempted from tax collected by the municipality till the end of the year December 2021 in Oman. The move comes as part of the State’s efforts to support businesses in the wake of coronavirus crisis.

The Muscat Municipality announced that it has decided to suspend collecting taxes from the above sectors until December 2021. The decision is based on the economic stimulus plan to mitigate the impact of Covid-19 crisis.

Oman: Violators of VAT to face strict penalties

Date: 28 Mar, 2021

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External URL: https://timesofoman.com/article/violators-of-vat-to-face-strict-penalties-in-oman

Muscat- March 28, 2021:

Oman has drafted a series of strict penalties for violators of VAT due to be effective from April 16, 2021.

The Tax Authority mentioned the penalties stipulated are imprisonment for a period of not less than two months, or a fine that is not less than OMR1,000. The maximum penalties can reach imprisonment for three years and a fine that does not exceed OMR20,000. In the event of recurrence, the court may double the fine and increase the maximum penalty for imprisonment by more than half of this limit.

In the event of delay in tax payment, the law imposes a rate of 1 % of the value of the unpaid tax for each month of delay, starting from the end of the specified period for payment and up to the date of payment.

The law has mentioned 17 cases in Articles 100 and 101, and it includes cases of wilful failure to implement some of its provisions, cases of providing incorrect data or documents, and cases of doing what would hinder the employees of the Tax Authority or who are required to carry out their duties.

Click here to read more.

KSA issues 40,500 fines for tax violations in first quarter

Date: 25 Mar, 2021

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External URL: https://www.arabnews.com/node/1830706/business-economy

Riyadh- March 25, 2021:

Saudi officials have issued 40,500 fines related to a number of different kinds of tax violations this year.

Governments worldwide are cracking down on tax evasion after sources public finances took a hammering during the pandemic. Few Gulf countries, including Saudi Arabia, introduced value added tax to boost revenues and reduce the dependency on oil revenues.

About 1.3 million registered taxpayers exist in the Kingdom according to the authority’s website.

Click here to read more.

No Customs Duty on personal items worth SR3,000

Date: 21 Mar, 2021

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External URL: https://www.saudigazette.com.sa/article/604509/SAUDI-ARABIA/No-customs-duty-for-personal-belongings-worth-SR3000

Riyadh- March 21, 2021:

Saudi Customs has clarified that travelers arriving in Saudi Arabia will not have to pay customs duty on new personal belongings if they are worth less than SR3,000 ($800). The report mentions that threshold for personal shipments is SR1,000 which includes the value of the goods and freight charges. However as per Saudi customs, a 15% value-added tax (VAT) is imposed on imported goods.

Students returning from abroad will be exempted from taxes on household furniture and personal belongings at the end of their studies or at the end of work abroad after submitting a proof of college attendance, it said.

Cars manufactured in 2016 and afterwards are allowed to be imported from UAE to Saudi Arabia, if they follow local specifications and standards and the fuel economy standard. Tax will be applied at 5% of the vehicle’s value, in addition to 15% VAT. The 15% VAT rate also applies to goods imported from other Gulf states, in addition to shipping fees, customs fees and any other charges. These will be applied until the electronic services system among the Gulf countries begins, Saudi Customs said.

Click here for more

Oman to slash income tax on SMEs and offer investors long-term residency permits

Date: 15 Mar, 2021

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External URL: https://www.arabnews.com/node/1822606/business-economy

Muscat- March 15, 2021:

Oman plans to cut income tax for small and medium businesses for 2020 and 2021 and will offer long-term residency permits for foreign investors. The plans are part of Oman’s Vision 2040 aimed at diversifying the economy away from oil, which makes up the bulk of state revenues.

Oman is one of the Gulf’s weakest economies and was badly hit by the coronavirus pandemic and low oil prices. The International Monetary Fund revealed its economy likely shrank 6.4 percent in 2020 and anticipates to make a modest recovery to 1.8 percent growth this year.

The measures also include income tax being reduced for companies in sectors aimed at economic diversification that will begin operating this year. Oman will also cut rent at the Duqm Special Economic Zone and industrial areas until the end of 2022.

click here to read more

Oman:Tally launches VAT ready software 'TallyPrime'

Date: 14 Mar, 2021

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External URL: https://www.tahawultech.com/news/tally-solutions-launches-its-vat-ready-software-tallyprime/

Muscat- March 14, 2021:

Tally Solutions, the leading international business management software provider launched a Value Added Tax (VAT) software, TallyPrime Release 1.1.3 to assist the Oman business owners towards an easy transition to the new tax regime.

While TallyPrime will enable businesses to set-up the software quickly and record and print VAT bills in Arabic and English with ease, it will also allow them to start their VAT compliance journey from day one. The software’s unique in-built error detection and correction capability ensures accurate data, so businesses always remain compliant.

Click here for more.

Oman: VAT due on unsold excess goods

Date: 10 Mar, 2021

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External URL: https://timesofoman.com/article/know-oman-vat-payments-also-due-on-excess-unsold-goods

Muscat- March 10, 2021:

Value added tax is due on excess stocks of goods that have been bought by companies to be sold to customers, even if they remain in storage once that company has ceased operations, a legal expert in the country has said.

Even if a company is storing the goods or all commercial activities have stopped, the company will be liable to pay VAT for these goods. Only goods and services provided by commercial organizations as gifts would be exempt from taxes. As a commercial trader engaged in marketing, distribution, manufacturing, or retail, one should budget for this tax. The general rule is that the new VAT tax should apply to all products and services.

Oman is introducing VAT on April 18 2021 and all companies that will be liable for VAT should register before this date.

Click here to read more.

Federal Tax Authority showcases 3 key initiatives in 'UAE Innovation Week'

Date: 09 Mar, 2021

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External URL: https://www.tax.gov.ae/press-releases/FTA-UAE-Innovation-Week

Dubai- March 9, 2021:

The Federal Tax Authority (FTA) is taking part in the UAE’s Innovation Week, under the slogan ‘UAE Innovates 2021’, with the aim of enhancing an innovation culture and encouraging community participation in designing and developing future experiences and initiatives.

Khalid Al Bustani, Director-General of the FTA, said that the authority’s participation in UAE Innovation Week is in line with its strategy to encourage innovation, development, and to contribute to the UAE’s efforts to strengthen the national strategy for innovation and digital transformation, to continuously develop government services.

The FTA’s three initiatives included

  • The ‘Tax Innovation Lab’ initiative, which involves holding remote brainstorming meetings on various critical topics that promote innovative ideas;
  • The ‘Monitoring Tax Innovations’, which highlighted the most remarkable innovative achievements in the tax field;
  • And a series of online comprehensive talks, comprised of virtual dialogue sessions on innovation management, research and development and future trends in the field.

Al Bustani emphasised that this contribution reflects the FTA’s understanding of customer needs and its efforts to meet their expectations and keep them happy.

VAT applicable for services provided by artists, influencers

Date: 08 Mar, 2021

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External URL: https://www.khaleejtimes.com/business/vat-in-uae/uae-tax-services-provided-by-artists-social-media-influencers-subject-to-vat

Dubai- March 8, 2021:

The Federal Tax Authority (FTA) has clarified in a bulletin that services provided by artists and social media influencers (SMIs) for consideration are subject to Value Added Tax.

VAT applies to such services and include, but are not limited to, online promotional activities performed on behalf of other businesses for a consideration, such as promoting a product in a blog or a video or promoting a business on a social media post, any physical appearances; marketing and advertising related activities; providing access to any social media influencers’ networks on social media, and any other services that the SMIs may provide for a consideration.

This announcement was shared in the latest Basic Tax Information Bulletin issued by the FTA on the tax treatment of services provided by artists and social media influencers.

The bulletin clarified that if an artist or influencer incurs any costs in providing a service and subsequently recovers that cost from its client, such reimbursement falls within the scope of VAT in the UAE.

Click here to view more.

GAZT launches an interactive guide to educate electronic stores on VAT requirements

Date: 07 Mar, 2021

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External URL: https://gazt.gov.sa/ar/MediaCenter/News/Pages/News_555.aspx

Dubai- March 7, 2021:

GAZT launches a VAT guide for stores to enable owners of electronic stores to comply with their obligations relating to VAT and guide them how to register, provide acknowledgment and pay tax. The guide includes a definition of electronic stores for those operating through independent websites, social media platforms, smart phone applications or instant chat applications.

The guide clarifies the obligations of the online store owner whose annual sales exceeds 375 thousand riyals annually before the Zakat and Income Authority, which include registering for value-added tax, displaying the tax certificate in the online store, filing tax returns and paying tax liabilities.

The Authority emphasized the necessity for the online store to clearly display the VAT registration certificate in front of consumers, regardless of the electronic sales platform through which the merchant operates in order to avoid imposing fines on the store.

View the VAT guide for e-shops.

Click here to read more.

UAE MoE extends deadline until March 31 for DNFBPs to comply with Anti-money Laundering (AML)

Date: 03 Mar, 2021

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Dubai- March 3, 2021:

The UAE has the most attractive trade regimes in the Middle East region, making it a global hub. As a committed member of the International Financial Action Task Force (FATF), the UAE has displayed readiness for anti-money laundering (AML) and counter financing of terrorism (CFT). The UAE taken proactive steps in an effort to monitor the illegal funds and align with international best practices.

Federal Law No 20 of 2018 on Anti Money Laundering (AML) was introduced in the UAE for combating the financing of terrorism and of illegal organizations.

The regulatory authorities under the AML set up are:

  • Ministry of Economy
  • The Central Bank of the UAE
  • Securities and Commodities Authority
  • Ministry of Justice
  • Insurance Authority
  • Dubai Financial Services Authority
  • Financial Services Regulator Authority in Abu Dhabi Global Market

The law has enforced great responsibilities on Designated Non- Financial Businesses and Professions (DNFBP) to help tackle money laundering. The UAE’s Ministry of Economy (MoE) is entrusted with the responsibility to supervise the DNFBP and commercial free zones with regards to AML/CFT.

Anyone engaged in the following trade or business activities would be considered a DNFBP:

  • Brokers and real estate agents
  • Dealers in precious metals and precious stones
  • Lawyers, notaries, and other independent legal professionals and independent accountants
  • Providers of corporate services and trusts

Click here to know the process of goAML registration.

**NOTE :

  • The deadline to register in the free goAML system to file STRs (Suspicious transaction reporting) and ARS (Automatic reporting system) for sanctions lists was February 25, 2021 and is applicable for DNFBPs registered in mainland and free zones as well.
  • MoE has extended the deadline and grace period for registration until March 31, 2021 for mainland DNFBPs.
  • DNFBPs that fail to abide with rules shall be subject to various administrative and financial penalties, that range from warnings to fines between Dh 50,000 to Dh 5 million.

**CLARIFY YOUR QUERIES by WITH OUR TAX EXPERTS.

Qatar, Rwanda sign agreement to avoid double taxation

Date: 28 Feb, 2021

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External URL: https://gta.gov.qa/en/qatar-and-rwanda-signs-double-tax-avoidance-agreement/

Doha- February 28, 2021:

The State of Qatar and the Republic of Rwanda has signed an agreement to avoid double taxation and prevent financial evasion between the governments of the two countries, at the General Tax Authority’s (GTA) headquarters in Doha.

The agreement was signed by His Excellency Ahmed bin Issa Al Mohannadi, the GTA’s President and His Excellency Francois Nkulikiyimfura, Rwanda’s Ambassador to Doha, in the presence of His Excellency Ambassador Abdulrahman bin Mohammed Al Dosari, Director of African Affairs Department at the Ministry of Foreign Affairs.

The agreement aims to eliminate double taxation between the two countries, solve obstacles that may restrict the movement of capital and encourage trade exchange, increase investment opportunities between the two sides through individuals and corporates, and enhance international standards of transparency through the exchange of documented financial information.

Click here to read more.

Qatar GTA and Invenio launch an integrated digital tax administration system

Date: 28 Feb, 2021

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External URL: https://www.itp.net/software/96245-qatar-rolls-out-integrated-digital-tax-administration-system-on-sap-s4hana

Qatar- February 25, 2021:

The General Tax Authority (GTA) and Invenio Business Solutions have successfully launched a state-of-the-art​ digital tax administration system, in Qatar.

The new system has transformed the tax administration lifecycle, digitalizing existing services and making them 100% contactless. Over 58,000 taxpayers have already registered on the comprehensive system, which supports multiple revenue types and offers 24×7 access to online services.

The GTA embarked on a national level change programme to modernize tax administration and enhance the taxpayer experience in the State. The country now has an agile platform, where evolving tax policies, laws and innovations can be built with ease.The SAP Tax and Revenue Management (TRM) solution on SAP S/4HANA provides end-to-end taxation management, advanced analytical processing and seamless data integration, whilst retaining data quality making it the perfect tax administration solution.

Click here to read more.

stc Bahrain-AFS partner for next generation payment solutions

Date: 25 Feb, 2021

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External URL: https://www.gdnonline.com/Details/937093/stc-Bahrain-AFS-in-deal-for-next-generation-payment-solutions

Bahrain- February 25, 2021:

stc Bahrain, a digital enabler and Arab Financial Services (AFS), MEA region’s digital payments and financial technology solutions provider, have partnered to launch FinTech payment solutions for both retail SMEs and customers across the Kingdom of Bahrain. The partnership will see stc Bahrain leverage AFS’ VAT-enabled payment tools to roll out all-in-one fully integrated stc Tajer point-of-sale (PoS) solution.

Powered by AFS, the PoS solution provides the flexibility to process payments, print receipts, accept online orders while lowering infrastructure investments, minimizing human errors and making transaction easier.

The partnership expands the stc pay network, with AFS said to be becoming the first acquirer in Bahrain to offer stc pay acceptance across their network of smart Android-based, integrated PoS (point-of-sale) terminals. Merchants will now be enabled with QR contactless payments and added to the stc pay portfolio.

With a VAT-enabled integrated payment solution developed by AFS, stc Bahrain will be supporting retail companies, pharmacies, restaurants, cafes, salons, gyms with the PoS solution, and would streamline the financial transaction processes into one system.

Bahrain: Attorney General establishes Tax Evasion Crimes Unit

Date: 24 Feb, 2021

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External URL: https://www.bna.bh/en/AttorneyGeneralestablishesTaxEvasionCrimesUnit.aspx?cms=q8FmFJgiscL2fwIzON1%2BDrsYCsGSsEW%2F9XQ6M4wcu%2FA%3D

Bahrain- February 24, 2021:

The Attorney-General has issued a decree establishing a specialized unit called “Tax Evasion Crimes Unit”.

Affiliated with the Financial Crimes and Money Laundering Prosecution, the new unit will investigate the crimes stipulated in the Value Added Tax Law No. (48) of 2018.

Financial Crimes and Money Laundering Prosecution Advocate Chancellor Nayef Yusef Mahmoud said that the establishment of this unit aims to reinforce the executive procedures regarding the application of the provisions of the law to tackle the cases of tax evasion. The unit is set up to probe such types of crimes and speed up the investigation of the reports related to the violation of the provisions of this law, in line with the requirements of the law for the urgent consideration and referral to the courts.
Click here to read more…

NBR releases updated VAT Imports and Exports guide

Date: 23 Feb, 2021

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Bahrain- February 23, 2021:

Bahrain’s National Bureau of Revenue (NBR) has published an updated version (1.2) of VAT Imports and Exports guide on 4th February, 2021.

The revised version clarifies the VAT implication regarding adjustment in the value of goods imported in the Kingdom of Bahrain.

Click here to view the Full Guide ( Version 1.2)

Qatar: Transfer Pricing Declaration Form now required on Dhareeba

Date: 23 Feb, 2021

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Qatar- February 23, 2021:The Qatar General Tax Authority (GTA) on February 2, 2021, verbally confirmed that a Transfer Pricing Form will be required for taxpayers for the financial years January 1, 2020 onwards. Taxpayers in Qatar are required to submit a transfer pricing declaration using the new tax administration portal – Dhareeba.

The Dhareeba system is currently equipped to accept transfer pricing declarations. This is only applicable for taxpayers having a specified revenue or asset value exceeding a threshold limit which is expected to be set at QAR 10 million.

The Transfer Pricing Form will require information on the details and nature of the taxpayer’s intra-group transactions, including the Organization for Economic Co-operation and Development (OECD) method applied by the taxpayer to determine that the transactions were conducted on an arm’s-length basis. In addition to the above information, the Transfer Pricing Form will also require taxpayers to provide additional transfer pricing related information.

NOTE:

Dhareeba is an electronic system that connects the General Tax Authority and its partners from the relevant government agencies and taxpayers. It automatically calculates and process the various types of tax to assist taxpayers in managing their tax transactions, in accordance with the Qatari tax laws.

Oman to impose Tax on High-Income Earners soon, says IMF

Date: 18 Feb, 2021

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Oman- February 17, 2021:

Oman’s finance ministry has indicated in its 2020-2024 economic plan that it is considering imposing a wealth tax in order to make government finances more sustainable as Covid-19 takes its toll on business activity.

The International Monetary Fund (IMF) has estimated that Oman’s budget deficit will reach nearly 19% of GDP this year. The new economic plan is projected to reduce that to 1.7% by 2024, according to a statement from the ministry of finance.The proposed tax would apply to high-income individuals, but the plan does not specify what the income brackets would be.

Currently none of the six Gulf Cooperation Council (GCC) states, collect income tax from individuals. Oman will become the first gulf state to introduce income tax on high earners in 2022.

Click here to view more.

FTA to deactivate VAT 301 form for VAT payment

Date: 16 Feb, 2021

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Dubai- February 16, 2021:

Since the implementation of VAT in UAE, the VAT301 form has been available on e-services portal to manually process the VAT payment on Customs Declarations using the Tax Registration Number (TRN).

Recently, FTA has communicated that form VAT301 will be discontinued on 23 February, 2021 for users who have a valid TRN and were using this form earlier for settlements via their VAT returns. Anyone registered for VAT purposes and having a valid TRN, in order to continue being able to import goods via Customs, ensure that your
Customs Registration Numbers (CRN’s) are linked to your Tax Registration Number (TRN).

If you do not have a CRN, ensure you register with the Customs Department and link your CRN with TRN. Alternatively, you will only be able to import goods via a clearing company registered with the FTA or use form VAT301 to utilize the payment option.

If you are from those whom the condition and rules applies on as it is shown below :-

1– Designated entities exempted by FTA.
2- Free zone Companies that exports through land to GCC Countries from designated zones[AHA1] for the VAT purpose.
3- FTA accredited Shipping and Clearance Agencies to clear shipments of on behalf of registered/non-registered importers with FTA.

NOTE: You can request to open form VAT301 for VAT settlements based on customs declarations through FTA’s online services. To submit application download VAT-301-SETTLEMENT-ACCESS-FORM

This will need to be filled and sent to VAT301application@tax.gov.ae along with applicable documents such as sample GCC transit customs declarations for review and approval.

Send your inquiry and we will arrange a consultation on this subject.

FTA Inspections in UAE: to enhance Excise Tax compliance and reduce violations

Date: 15 Feb, 2021

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External URL: https://www.tax.gov.ae/press-releases/Campaigns-in-Local-Markets-to-Ensure-Compliance

Dubai- February 15, 2021:

The number of inspection campaigns organized by the Federal Tax Authority (FTA) witnessed notable growth during 2020 across UAE markets. Some were conducted in collaboration with Departments of Economic Development and other relevant entities to protect consumer rights and increase the level of tax compliance.

The Authority said that these campaigns were carried out as part of their extensive efforts to contribute towards strengthening market performance, protect legitimate trade and prevent the sale of contraband within the UAE and tax evasion.

The application of Excise Tax laws achieved remarkable success since their implementation, reflecting positive results primarily in building a safe and healthy society by reducing the consumption of harmful goods.

The FTA noted that the total value of the liabilities caught during the inspection visits amounted to AED 191,830,000 in the category of goods subject to Excise Tax, 9.4 million units of cigarette packs and 14,000 kilograms of shisha tobacco products were uncovered as goods not bearing digital tax stamps and no tax has been declared or paid on them. Other goods caught in violation of Excise Tax laws included a total of more than 803,000 items ranging from carbonated beverages, energy drinks, sweetened drinks and electronic smoking devices.

FTA Director-General, Khalid Ali Al Bustani, confirmed that the Authority prioritizes consumers’ protection from harmful products that do not meet the UAE’s regulations and standards while actively combating tax evasion.

The Authority will continue to conduct its inspection campaigns to enhance tax compliance and reduce transactions that violate legislation and tax procedures.

Owners of multiple 'sole businesses' need just one VAT registration: FTA

Date: 10 Feb, 2021

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External URL: https://www.tax.gov.ae/press-releases/FTA-issues-a-public-clarification-regarding-VAT-registration

Dubai- February 10, 2021:

According to the FTA, anyone owning multiple ‘sole businesses’ in the UAE need only one tax registration for all of them, and not for each one separately. It means that all tax claims must be filed collectively by the individual and for the establishments he owns. A sole establishment is 100 per cent owned by an individual, and does not have legal standing independent of its owner.

The FTA clarified that the sole proprietorship rule does not apply to a One-Person Company LLC or similar legal entities, which are seen as “distinct and separate legal persons” from their owners (unless the applicable legislation treats such entity and the natural person as the same person). For the avoidance of doubt, it should be noted that a legal person a company) cannot own a sole establishment. In certain cases, tax registrations by taxpayers are reviewed with regards to sole establishments and such persons will be informed of the corrective measures to be taken.

The tax claims filed by the business owner in addition to his sole establishments must be considered collectively to determine whether the person exceeded the mandatory VAT registration threshold of Dh375,000.

The FTA said the registrant must inform the FTA of any undeclared output tax by submitting a voluntary disclosure in accordance with Federal Law No. 7 of 2017 on Tax Procedures. A natural person is also required to notify the FTA if it failed to register for VAT and take the necessary corrective action to account for any outstanding dues.

Oman Tax Authority publishes VAT Registration Guides

Date: 03 Feb, 2021

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External URL: https://tms.taxoman.gov.om/portal/web/taxportal/-/vat-registration-start?redirect=%2Fportal%2Fweb%2Ftaxportal%2Fvat-tax

Oman- February 3, 2021:

The Sultanate of Oman Tax Authority has announced the commencement of VAT registration from 1st February 2021 until 15th March 2021 for taxable persons with annual supplies exceeding or expected to exceed 1 million OMR. The voluntary registration will also be available for taxable persons with annual supplies or expenses exceeding or expected to exceed 19,250 OMR.

The registration must be made through the Oman Tax Authority’s Online Portal – www.taxoman.gov.om

Oman Tax Authority has released a list of ‘Manual Guides for VAT Registration’ explaining the registration requirements for business and individuals. It explains who is liable to register for VAT, and also explains the registration requirements in the period before the VAT Law is effective.

The Oman Tax Authority advises taxable persons to register for VAT within the preset deadlines to avoid any penalties levied on late registration. Taxable persons may source more information pertaining the registration procedure and other VAT details on the guides published on Oman’s Tax Authority website.

Click here to view the Guides for VAT registration.

KSA: Fines on late VAT returns have been waived until June 2021

Date: 02 Feb, 2021

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External URL: https://saudigazette.com.sa/article/602768

Saudi Arabia- February 2, 2021:

The Saudi General Authority of Zakat and Tax (GAZT) extended the waiver period of fines and financial penalties for non-payment of Value Added Tax (VAT) until June 30, 2021. The move is part of the Kingdom’s initiatives to help the private sector face the economic fallout resulting from the coronavirus outbreak.

Taxpayers will be exempted from fines on delays in the payment of taxes or filing tax returns. They will be also exempted from the penalties imposed for correcting tax returns under the VAT law.

Taxpayers will be 100% exempted from penalties, if they fully pay the principal tax due under the relevant tax returns during the period from January-March 2021. GAZT added that 75% of fines will be waived if taxpayers fully pay the principal tax due under the relevant tax returns during the period from April-May 2021. A 50% waiver will also apply to taxpayers that fully pay the principal tax due under the relevant tax returns during June.

However, The GAZT clarified that the measure does not include any waivers of penalties that were imposed by the authority, other than delays in tax payments, submission of tax returns and correction of tax returns. The initiative does not also cover the fines imposed for tax evasions and the fines paid before January 21.

Remittance tax back in play as Kuwaiti MPs submit bill

Date: 18 Jan, 2021

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External URL: https://gulfbusiness.com/kuwait-mps-submit-proposal-to-impose-fee-on-money-transfers-out-of-country/

Kuwait- January 18, 2021:

The tax on expatriates’ money remittance is back in the news as Parliamentarians Osama Al-Shaheen, Hamad Al-Matar, Abdulaziz Al-Saqaabi, Shuaib Al- Al- Muwaizri and Khalid Al-Otaibi bring a new proposal on taxing remittances.

At present, the exchange companies are collecting fees for remittances, but the State gets nothing. The State will benefit from remittances through this bill, Al-Shaheen explained.

The Kuwaiti MP stated that roughly KD 21 bn has been transferred out of Kuwait in the past five years – averaging KD 4.2 bn every year. Based on these figures, some KD 100 m can be collected every year by imposing the fee. He disclosed that the draft submitted aims to enhance the public budget, support the domestic economy, generate more opportunities and avoid capital leaving the country.

This bill amends law number 32/1968 which regulates the currency, Central Bank of Kuwait (CBK) and banking procedures. The article mandates the Central Bank of Kuwait to take the necessary steps to obligate local banks, branches of foreign banks and money exchange companies to collect tax on remittances – at a rate of 2.5 percent regardless of the currency. This tax will be added to the State treasury.

Money transfers related to agreements on investment protection and money transferred by the government are tax-exempt. The Central Bank must exempt Kuwaitis studying abroad, those undergoing treatment overseas treatment, and if the transferred amount is less than KD 10,000 per year from paying such tax.

Oman: Over 90 food items will be subjected to VAT at zero percent

Date: 13 Jan, 2021

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External URL: https://timesofoman.com/article/over-90-food-items-subjected-to-zero-tax-rate

Muscat- January 13, 2021:

The Chairman of the Tax Authority issued three executive decisions related to the implementation of the value-added tax, which will come into effect on April 16 of this year 2021.

Ministerial Decree 2/2021, dated 4 January 2021, detailed the list of around 93 food items that will be subject to VAT at the zero rate in Oman.

The list includes the following food products :

  • Meat, fish and poultry
  • Milk and dairy products
  • Fresh eggs, vegetables and fruits
  • Coffee and tea
  • Cardamom creels
  • Olive oil
  • Sugar
  • Bread
  • Salt
  • Bottled drinking water
  • Nutritional preparations for children

Oman Tax Authority: New executive decisions on VAT implementation

Date: 13 Jan, 2021

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External URL: https://timesofoman.com/article/new-executive-decisions-on-vat-implementation-issued-by-oman-tax-authority

Muscat- January 13, 2021:

In a series of executive decisions issued, the Tax Authority in Oman has announced the framework and related guidelines for registration of tax-eligible businesses and organizations in the Sultanate.

Businesses with an annual turnover of a minimum of OMR 38,500 are required to mandatorily register with the Tax Authority. However, registration is optional for businesses with a minimum turnover of OMR 19,250. These limits are in with the provisions of the GCC Unified VAT Agreement signed by the Sultanate in November 2016.
SMEs and micro-businesses have been given additional time to register their firms in order for them to equip themselves with the requisite IT systems and bookkeeping methods required to comply with the requirements of the VAT law.

First to register will be businesses with an annual turnover of over OMR 1 million. They must register between February 1 and March 15, 2021.

For businesses with a turnover of over OMR 500,000, the deadline for registration is July 1, 2021.

VAT is an indirect tax on most goods and is levied on the value-added of business operations, which is the difference between the final price of a commodity and the cost of materials and services.Confirming the implementation of VAT, the Ministry of Finance announced in the 2021 General Budget that the new level would be imposed on goods and services in Oman starting from April 2021, with exception of the education and health sectors and some basic commodities.

According to Royal Decree 121/2020, a 6-months grace period has been granted for the taxpayer to register, and prepare their internal system to implement the VAT. The value-added tax rate of 5 per cent to be applied in Oman is among the lowest rates at the international level.

“Therefore, it is expected that the impact of VAT on the cost of living in Oman will be minimal. The VAT will have a positive impact on the economic and social development and the international competitiveness of Oman. The financial resources obtained from this tax will contribute to building a sustainable economy for future generations, and it will also contribute to improving public services and continuing the development of infrastructure in future,” the ministry noted.

MoF extends deadline till January 31, 2021 for submitting ESR notifications

Date: 06 Jan, 2021

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External URL: https://gulfnews.com/your-money/taxation/january-31-deadline-ensure-your-business-abides-by-the-new-uae-economic-substance-rules-1.1592321061342

Abu Dhabi- January 6, 2020:
The Ministry of Finance (MoF) has announced the extension of the deadline for submitting Economic Substance Regulations (ESR) notifications and reports.

All companies in the UAE that engage in any of the ESR’s relevant activities must submit an annual ESR notification to its Regulatory Authority no later than January 31, 2021 in order not to be subject to administrative penalties.

All companies that fall under this decision are immediately to register an account in the ministry to access the ESR Portal to submit needed reports, notifications and supporting documents electronically before the mentioned deadline as no further extension will be granted to deviating companies.


Saudi Arabia becomes first Arab country to sign DTA agreement with Taiwan

Date: 31 Dec, 2020

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External URL: https://www.arabnews.com/node/1775276/business-economy

Saudi Arabia- December 31, 2020:

Saudi Arabia has become the first Arab country to sign a double taxation avoidance agreement with Taiwan.

Joanne Ou, a spokesperson for Taiwan’s Ministry of Foreign Affairs (MOFA), said that the agreement was signed in Riyadh on December 2,2020. The new tax agreement will come into effect from January 1, 2021.

According to the CNA report, Saudi Arabia is Taiwan’s 13th largest trading partner and trade between the two countries was valued at $8.66 billion in 2019.

“As Saudi Arabia gradually shifts away from dependence on its oil exports, it is adopting a diversified economic policy that encourages foreign investment,” MOFA said in a statement. “The latest tax agreement will help facilitate bilateral investment, trade, employment opportunities, technological exchange and cooperation on taxes and tariffs,” it added.

Saudi authorities clarify which cars are exempt from VAT

Date: 30 Dec, 2020

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External URL: https://gulfnews.com/world/gulf/saudi-authorities-clarify-which-cars-are-exempt-from-vat-1.76132760

Saudi Arabia- December 30, 2020:

While some car owners put a value-added tax of 15% on the cars they sell off outside the taxable showrooms, the Saudi Zakat and Income Authority confirmed, in response to an inquiry, that selling a used car from an unregistered individual, who does not run a business to another individual is not subject to VAT, local media reported.

According to the Zakat and Income Authority, taxable cars include vehicles sold off in auctions if the seller is carrying out an economic activity and cars sold off by showrooms or VAT registered businesses.

UAE makes DTS mandatory for waterpipe, e-cigarette products from 2021

Date: 23 Dec, 2020

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Abu Dhabi- December 23, 2020:

The Federal Tax Authority has announced that as of 1st January 2021, it will not be permitted to sell, supply, transport, store or possess any type of water pipe tobacco or electrically heated cigarettes in the UAE unless they bear the Digital Tax Stamp (DTS). All those concerned must strictly comply.

This distinctive mark system for tobacco products is a regulatory program which supports the state’s efforts to combat the illicit trade in tobacco products across the country. The program requires tobacco manufacturers, suppliers and concerned parties to comply with procedures for placing custom digital tax stamps on tobacco products, including water pipe tobacco and electrically heated cigarettes rolls. This is done to monitor and track their movement from manufacturer to the point of consumption.

The DTS system helps the FTA “improve its ability to collect excise tax charged” on such products on being imported or manufactured locally. It also enables “stakeholders to analyze the supply chain to better control illicit tobacco products”.

In addition, the DTS system allows for the implementation of compliance standards. Visit tax.gov.ae/dts

Read More about the Digital Tax Stamp Scheme.

Zoho launches VAT-compliant software in Oman

Date: 17 Dec, 2020

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External URL: https://muscatdaily.com/Oman/389052/Zoho-launches-VAT-compliant-software-in-ME

Muscat- December 17, 2020:

Zoho, a global information technology company that offers over 45 business applications including CRM, business email and help desk, has launched its VAT-compliant accounting software, Zoho Books in the region.

As businesses in the sultanate prepare for the implementation of VAT, Zoho Books helps their seamless transition to the new tax law and ensure VAT compliance.

Having helped tens of thousands of businesses in the United Arab Emirates, Saudi Arabia and Bahrain easily transition to VAT with country-specific editions, Zoho Books is now offering its expertise to businesses in Oman to help with their accounting and VAT filing needs. The software has also been accredited by the Federal Tax Authority in the UAE and General Authority of Zakat and Tax in Saudi Arabia.

Hyther Nizam, president – MEA, Zoho Corp, said, “With the experience that we gained from bringing out tax-specific editions in the UAE, Saudi Arabia and Bahrain, we’ve built Zoho Books to provide a complete accounting solution for Omani business owners. Zoho Books, with its in-built features can help businesses create VAT-compliant transactions, record and file VAT returns with ease. It is also a great opportunity for businesses to transform their current business processes and adopt digitalization and automation of business finances.”

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“Zakat and Income” announces the entry into force of the electronic billing regulation

Date: 04 Dec, 2020

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External URL: https://gazt.gov.sa/ar/MediaCenter/News/Pages/News_521.aspx

Riyadh- December 4, 2020:

The General Authority for Zakat and Income announced the approval of its Board of Directors on the electronic billing regulation, which was published on December 4, 2020. An electronic invoice is a tax invoice that is issued electronically through an electronic means, and is issued by every taxpayer subject to value added tax in the Kingdom.

The electronic billing regulation contains seven articles that regulate the mechanism for issuing and keeping electronic invoices for the taxpayers and clarifies the provisions, procedures and persons subject to them, in addition to the procedural rules and time limits. Whereas, the Authority confirmed that the regulation has entered into force from the date of publication. Note that the mandatory application will take place on the taxpayers subject to it to issue and keep invoices on the fourth of December 2021.

The General Authority for Zakat and Income invites all taxpayers to view the electronic billing list through its website and to contact it via the unified number (19993), which works 24 hours a day, seven days a week, for any inquiries related to electronic billing .

It is worth noting that the electronic invoicing system aims to limit the volume of shadow economy transactions, in addition to combating commercial concealment.

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Saudi Arabia to review VAT increase after the pandemic ends

Date: 22 Nov, 2020

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External URL: https://www.khaleejtimes.com/coronavirus-pandemic/coronavirus-saudi-arabia-to-review-vat-increase-after-covid-19-crisis-ends

Riyadh- November 22, 2020:

Saudi Arabia will review its VAT increase after the coronavirus pandemic ends, the Kingdom’s acting media minister said.

Saudi Arabia tripled value-added tax to 15% in July to offset the impact of lower oil revenue on state finances.The decision was a painful one and has undoubtedly caused concern for every individual and family.

“This decision is like any other decision, it can be revised God willing when this crisis is over,” Majid bin Abdullah al-Qasabi told reporters at a news conference, referring to the global pandemic.

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FTA conducts a second virtual workshop for tax agents on tax treatment of e-commerce

Date: 15 Nov, 2020

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External URL: https://www.tax.gov.ae/press-releases/workshop-for-tax-agents-e-commerce

Abu Dhabi- November 11, 2020:

The Federal Tax Authority (FTA) confirmed that several general Value Added Tax (VAT) rules apply to e-commerce transactions, in addition to a number of special VAT rules specifically applied to e-commerce transactions. E-commerce refers to the supplies of goods and services on digital platforms, via computers or mobile phones purchased from websites or electronic applications.

The workshop saw the participation of 225 accredited tax agents and a number of FTA officials. The FTA gave a presentation on how to apply VAT on the supplies of goods and services made within the e-commerce framework and how to calculate VAT on these supplies. The FTA also presented an overview of e-commerce, the principles of VAT on the supply of goods via e-commerce and the supply of electronic services, and the effects of VAT on electronic markets using practical examples. The presentation indicated that all goods and services purchased through online shopping sites are generally subject to 5% VAT if the place of supply is in the UAE. The tax is also applied to most of the goods that are sold inside the UAE; subject to some exceptions per the VAT legislation (such as medicines sold on websites). Additionally, the import of goods is subject to VAT.

His Excellency Khaled Ali Al Bustani, Director General of the FTA, stressed that the number of FTA accredited tax agents is increasing steadily, in line with the continuous growth of taxable persons within the tax system. H.E. Al Bustani said: “The number of accredited tax agents increased in the first 10 months of 2020 by more than 10% to 515, compared to 468 in the same period last year. This increase provides more opportunities for taxpayers wishing to deal with the FTA through tax agents by offering them an extensive, constantly-updated list of approved agents on the FTA’s website.”

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Oman: Incentives announced for tourism sector

Date: 18 Mar, 2021

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External URL: https://www.timesofoman.com/article/ministry-announces-tax-exemptions-for-tourism-sector-in-oman

Muscat- March 18, 2021:

Oman’s Ministry of Heritage and Tourism has issued a circular on incentives for the tourism sector with an economic stimulus plan.

The plan was approved at the Council of Ministers, which his Majesty Sultan Haitham Bin presided on March 9, 2021. The initiative aims to achieve high growth rates as per Oman Vision 2040.

“It also aims to support efforts to extenuate the impact measures taken due to the pandemic on the national economy by providing a set of measures and initiatives that supports economic recovery, enhancing the performance of economic activities and foreign investment” states an official statement by Oman’s Ministry of Heritage and Tourism.

Incentives approved for the tourism sector include:

  • Exemption from the income tax for hotel establishments for two tax years – 2020 and 2021.
  • Exemption from the tourism tax payable by tourism establishments to the Ministry starting from March 10, 2021, until December 31, 2021.
  • Postponement of the settlement of the tourism tax until March 9, 2021, payable by tourism establishments at the end of December 2021.

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Oman to levy 5% VAT from 16 April, 2021

Date: 16 Mar, 2021

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External URL: https://www.khaleejtimes.com/business/economy/oman-to-levy-5-vat-from-next-month

Muscat- March 16, 2021:

Oman will start implementing five per cent value-added tax (VAT) from April 16,2021. It is estimated that VAT will contribute 1.5 per cent towards the country’s gross domestic product (GDP) and raise around 400 million Omani riyals (Dh3.8 billion; $1 billion) per year for the country’s exchequer.

The implementation of VAT comes in line with the GCC framework that was agreed between the six nation bloc. Saud bin Nasser bin Rashid Al Shukaili, chairman of the Tax Authority in Oman, said all necessary preparations to implement VAT from April 16 have been completed.

Oman VAT timeline

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