News Update

Oman: Zero VAT on 488 food items

Date: 12 Apr, 2021

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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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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.

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FTA released a basic tax information bulletin on Automotive Sector

Date: 09 Apr, 2021

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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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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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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.

  • 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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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.

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

Date: 31 Mar, 2021

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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.

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Oman: Certain sectors exempted from tax till December 2021

Date: 29 Mar, 2021

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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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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.

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

Date: 25 Mar, 2021

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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.

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No Customs Duty on personal items worth SR3,000

Date: 21 Mar, 2021

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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.

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

Date: 15 Mar, 2021

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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.

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Oman:Tally launches VAT ready software 'TallyPrime'

Date: 14 Mar, 2021

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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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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.

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

Date: 09 Mar, 2021

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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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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.

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

Date: 07 Mar, 2021

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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.


Qatar, Rwanda sign agreement to avoid double taxation

Date: 28 Feb, 2021

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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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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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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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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.


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 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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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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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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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 –

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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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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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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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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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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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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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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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

Read More about the Digital Tax Stamp Scheme.

Zoho launches VAT-compliant software in Oman

Date: 17 Dec, 2020

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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.”

Click here to read more.

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

Date: 04 Dec, 2020

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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.

Click here to read more.

Saudi Arabia to review VAT increase after the pandemic ends

Date: 22 Nov, 2020

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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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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.”

Click here to read more.

UAE has no plan to hike VAT

Date: 12 Nov, 2020

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Dubai- November 12, 2020:

The UAE’s Ministry of Finance said it raised Dh11.6 billion in value-added tax (VAT) revenues in the first eight months of 2020 and the government has no plans to raise VAT to more than five per cent.

The UAE and Saudi Arabia levied five per cent VAT from January 1, 2018 and later Bahrain also introduced it. Saudi Arabia, the region’s largest economy, hiked the VAT to 15 per cent from July 1, 2020. Oman is set to become fourth country in the GCC to impose VAT from April next year.

Saeed Rashid Al Yateem, assistant under-secretary of resource and budget at Ministry of Finiance, affirmed that there are no plans or decisions at the moment to raise VAT to more than five per cent in the UAE.

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FTA to issue tax residency certificates

Date: 08 Nov, 2020

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Dubai- November 8, 2020:

Tax residency and commercial activities certificates will now be issued through the Federal Tax Authority of the UAE, the FTA said.

Applications for the certificates can be made through the FTA’s e-services portal from November 14, the authority added.

Tax residency certificates are issued to eligible government entities, companies and individuals looking to benefit from double taxation avoidance agreements signed between the UAE and other countries, while the commercial activities certificate enables applicants to refund VAT paid in advance outside of the UAE.

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Income tax to be introduced in Oman: Ministry

Date: 04 Nov, 2020

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Dubai- November 4, 2020:

Oman is said to be weighing up plans to introduce income tax on high earners in 2022 as part of the finance ministry’s 2020-2024 economic scheme, as the Gulf state seeks to restore finances battered by low oil prices.

The plan aims to bring Oman’s fiscal deficit down to 1.7 per cent of gross domestic product by 2024, from a preliminary deficit of 15.8 per cent this year.It also has a target of increasing non-oil revenues to 35 per cent of total government revenue by 2024, from 28 per cent this year.

“The government recognizes the need to strengthen the Sultanate’s revenue-raising framework by decreasing its reliance on hydrocarbon revenues,” it said in its bond prospectus.

“The initiative is under study and all aspects of its application are being considered. It is expected to apply the tax in 2022,” the 2020-2024 medium term economic balance document said.

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FTA Board of Directors review Authority’s performance indicators in the meeting

Date: 31 Oct, 2020

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Dubai- October 31, 2020:

The FTA Board of Directors, chaired by H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, and Chairman of the Authority’s Board of Directors, approved a number of executive decisions related to the Authority’s operational activities and organisational and administrative policies during its 13th meeting.

The Authority’s financial statements for the period covering the first quarter ending on 31st March, and the period ending on June 30th, 2020, were approved. This was in accordance with the international accounting standards related to reviewing the quarterly financial statements.

During the virtual meeting, the Board reviewed indicators of FTA’s performance adopted by the Authority in all areas relevant to its activities during the first nine months of 2020, including registration systems, filing returns, tax refunds for groups legally qualified to recover, such as UAE nationals’ homebuilders refund, tax refunds for tourists and for foreign business visitors.

H.H. Sheikh Hamdan bin Rashid confirmed that the reports reviewed during the meeting showed that the Authority continues to maintain its distinguished performance across all activities, while continuing its development plans to upgrade its services in accordance with the best standards to achieve customer happiness.

The is also a 210% growth in tax amounts refunded to UAE Nationals during 2020 for the construction of their new homes to a value of 270 million AED.

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Voluntary disclosures by UAE businesses on VAT or excise tax will face heavy penalties

Date: 20 Oct, 2020

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Dubai- October 20, 2020:

There is a major development in the UAE tax litigation landscape.

In a very significant twist, the voluntary disclosures made by UAE based businesses on their actual VAT obligations will now be charged with late payment penalties (up to 300% of the tax due). Late payment penalties would apply from the due date of the tax return and not from the date of the voluntary disclosure.

This is according to a ruling by the UAE Federal Supreme Court judgment on an appeal filed by the UAE Federal Tax Authority.

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Tax payment through the new version of the eDirham card

Date: 19 Oct, 2020

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Abu Dhabi- October 19, 2020:

The new generation of the eDirham cards have been included as one of the official payment channels provided by the authority. Tax payments can be processed via the new eDirham cards as of Sunday 1st November, 2020, as payments will not be accepted through the existing eDirham cards with effect from the same date.

In order to ensure a smooth transition to the new generation of the eDirham, the authority calls on VAT registrants to prepare to make the switch to the new version. This comes to replace the old version of the eDirham, which will be suspended and will not be available to use for the Authority’s transactions as from the beginning of November 2020.

The FTA stresses that the new version of the eDirham will provide users with a more diverse set of options that are both easier to use and adhere to the highest standards of safety and excellence.

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Oman: Incentives announced for tourism sector

Date: 18 Mar, 2021

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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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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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