News Update

Transfer of a Business as a Going Concern - VATP015

Date: 22 Aug, 2019

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External URL: http://www.allaboutvat.com/wp-content/uploads/Summary-VATP-015-Transfer-of-a-Business-as-a-Going-Concern-21Aug2019.pdf

In accordance with Article 7(2) of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (the “Decree-Law”), the transfer of whole or an  independent part of a business from a person to a taxable person for the purposes of continuing the business that was transferred is not considered to be a supply for VAT purposes.

As a consequence of not being a “supply” for VAT purposes, such transfer of  a business, commonly known as a “transfer of business as a going concern” or a “TOGC”, is not subject to VAT. This rule has a compulsory application.

Summary

This Public Clarification discusses the conditions that have to be met for a  transfer to qualify as a transfer of a going concern under Article 7(2) of the
Decree-Law.

UAE Cabinet to expand list of excise taxable products in January 2020

Date: 21 Aug, 2019

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External URL: http://wam.ae/en/details/1395302780784

In a step to reduce consumption of unhealthy goods and modify consumers’ behaviour, the UAE Cabinet adopted a decision to expand the list of excise taxable products to include sweetened beverages, sugary drinks and electronic smoking devices, starting 1st January 2020.

According to a statement released by the Cabinet General Secretariat, “The decision comes to support the UAE government’s efforts to enhance public health and prevent chronic diseases directly linked to sugar and tobacco consumption.”

“A tax of 50 percent will be levied on any product with added sugar or other sweeteners, whether in form of a beverage, liquid, concentrate, powders, extracts or any product that may be converted into a drink,” the statement added.

“The decision also requires manufacturers to clearly identify the sugar content in order for consumers to make sensible healthy choices.

“A tax of 100 percent will be also levied on electronic smoking devices, whether or not they contain nicotine or tobacco, as well as the liquids used in electronic smoking devices. The decision aims at reducing the consumption of harmful products that put the health of people and environment at risk,” it continued.

“In 2017, the UAE Government started introducing excise tax on specific goods, which are typically harmful to human health or the environment,” the General Secretariat of the Cabinet concluded.

Expo 2020 will drive VAT in UAE by US$8bn

Date: 21 Aug, 2019

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External URL: https://www.intergameonline.com/coin-op/news/expo-2020-will-drive-vat-in-uae-by-us8bn

Dubai’s Expo 2020 will drive VAT revenues over $8bn this year, according to Rajiv Hira, chairman, RHMC Managing Consultants. However the large increases would not be sustained long-term.

Hira, in a newspaper interview in the Arabian Business, said that over 300,000 businesses and tax groups registered for VAT would provide the figures.

Nearly 200 countries are participating in the Expo 2020, reports the tax consultancy, with growth in retail, hospitality, aviation and shipping.

“Considering the distribution of $7.3bn (AED27bn) on account of VAT, it can be easily concluded too touch around $8bn although we will be observing an increase in capital spending at a faster and larger scale, whereas VAT collection will not increase in that speed.”

In another report, the VAT tax revenues are being split between central and local government, by the UAE Cabinet, at a ratio of 30-70 in favour of local government.

Around 25 million people are expected to visit Dubai for Expo 2020.

Sugary drinks to cost more in UAE from January 2020

Date: 20 Aug, 2019

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External URL: https://www.khaleejtimes.com/news/government/sugary-drinks-to-cost-more-in-uae-from-january-2020-

The UAE will levy excise tax on additional sugary and smoking products from next year in order to reduce consumption of these unhealthy products linked to chronic diseases.

The UAE Cabinet has approved a proposal to impose 50 per cent excise tax on products with added sugar and sweeteners, whether in the form of a beverage, liquid, concentrate, powders, extracts or any product that may be converted into a drink. While 100 per cent excise tax will be levied on electronic smoking devices – whether or not they contain nicotine or tobacco – liquids used in electronic smoking devices will also be levied the same tax.

From October 2017, the UAE started to levy 50 per cent “sin tax” on sugary and energy drinks and 100 per cent tax on smoking products in order to curb the consumption of these harmful products.

Anurag Chaturvedi, managing partner at Chartered House Tax Consultancy, said the new products which are likely to be included in the list are candies, cookies, cakes, pastries, pies, doughnuts, canned juices, ice creams, yogurts, milkshakes etc.

“We have already seen the impact on energy drinks, where a fall of 65 per cent in sales was reported after the introduction of the excise tax. Definitely, I see a reduction in the sale of these products as the prices shall go up. With VAT already being levied on these products and with the addition of excise tax, prices will go up and consumers automatically shall reduce the consumption of these products,” said Chaturvedi.

He said UAE businesses must expedite their process as January 1, 2020, provides not too much time for companies to upgrade their systems, educate their employees and be prepared for this new introduction of excise levy on products with added sugar and sweeteners.

A statement released by the Cabinet General Secretariat said that manufacturers of these sugary products must clearly identify the sugar content to make it easier for the consumers to make sensible healthy choices.

Nirav Shah, director at Fame Advisory DMCC, said it would be very interesting to see what this list will include as sweetened beverages could be as common as soft drinks, or the authorities will restrict it to excessive sugary sports drinks only.

“Inclusion of e-cigarette is interesting too, as their contention has been that they do not contain tobacco and used frequently by people trying to stop tobacco consumption. Moreover, all of these items will have to comply with stringent requirements for sale in local markets, similar to other products covered in excise,” Shah said.

The UAE will also add tobacco products used in shisha under excise tax from the fourth-quarter of this year, prohibiting the import of any type of shisha tobacco into the country if they don’t bear the digital marks.

The UAE enjoys one of the highest tax compliance rates of close to 100 per cent for tax return requirements of excise tax, which is estimated to generate up to Dh7 billion in annual revenues for the UAE federal budget. With the addition of new items under the “sin tax”, revenues are expected to increase next year. The UAE also imposed five per cent value-added tax (VAT) on a host of goods and services from January 2018, which helped the UAE raise Dh27 billion.

99% of firms in Bahrain sign up for VAT

Date: 19 Aug, 2019

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External URL: https://www.zawya.com/mena/en/economy/story/99_of_firms_in_Bahrain_sign_up_for_VAT-SNG_150314917/

The National Bureau for Revenue (NBR) has announced that 99 per cent of relevant enterprises operating in Bahrain have successfully registered with tax authorities.

The NBR identified 12 enterprises that are in violation of Bahrain’s VAT Law by not submitting a registration application, paying the tax by the deadline, or filing their return form.

 The bureau said they had been fined, warned of further action which may lead to the suspension of their Commercial Registration.

New UAE tax rule on two products from November 1

Date: 19 Aug, 2019

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External URL: https://www.khaleejtimes.com/business/local/fta-to-implement-phase-2-of-tobacco-marking-scheme

The Federal Tax Authority (FTA) is ramping up its efforts in preparation to implement the second phase of the ‘Marking Tobacco and Tobacco Products Scheme’, where it will be expanded to cover waterpipe tobacco (known in Arabic as ‘Mu’assel’) and electrically heated cigarettes as of November 1, 2019.

Digital Tax Stamps will be made available for purchase by producers and importers of waterpipe tobacco and electrically heated cigarettes, the authority revealed, as it held its second awareness workshop in Dubai to introduce them to the scheme’s procedures and objectives, as well as the timeline for the second phase. The workshop was led by FTA experts and representatives from De La Rue, the company commissioned by the authority to operate the system.

The FTA asserted that the scheme was launched to support its efforts to collect taxes, combat tax evasion, and protect consumers from commercial fraud. The FTA went on to note that these preparations follow the successful implementation of the Scheme’s first phase, where the sale and possession of any cigarette packets not bearing the ‘Digital Tax Stamps’ was prohibited across local markets as of Thursday, August 1, 2019.

FTA director general, Khalid Ali Al Bustani, said: “This workshop is part of the authority’s plan to raise tax awareness among taxable businesses, maintain constant communication with professionals working across all economic activities, and keep them in the loop with regards to the latest developments in tax procedures. These workshops allow us to listen to their opinions and suggestions, and address any obstacles they may be facing to ensure a smooth implementation of tax laws. The authority is committed to strengthening its partnerships with the various relevant entities in both the government and the private sector. These strategic partnerships are crucial for successfully implementing the tax system.”

He added that the FTA is also dedicated to organising continuous awareness campaigns, seminars, and workshops for all business sectors. FTA experts went into the details of the upcoming phase two of the ‘Marking Tobacco and Tobacco Products Scheme’, noting that as of November 1, 2019, the Digital Tax Stamps will be made available for purchase, where producers and importers of waterpipe tobacco (‘Mu’assel’) and electrically heated cigarettes are required to place them on these products to indicate that all due taxes have been settled. As of March 1, 2020, it will be prohibited to import into the UAE any of the Excise Goods outlined in FTA Decision No. (2) of 2019 on Marking Tobacco and Tobacco Products, if they do not bear the stamps. Then starting on June 1, 2020, it will no longer be permissible to supply, transfer, store, or possess said Excise Goods in the UAE unless they have the stamps.

Federal Tax Authority launches new electronic system to register excise goods

Date: 17 Aug, 2019

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External URL: http://www.wam.ae/en/details/1395302780330

The Federal Tax Authority,FTA, has launched a new electronic system for registering excise goods as part of its plans to continuously develop the tax system as a whole, and excise tax procedures, in particular.

In a press statement issued today, the authority explained that the new system offers accurate and transparent procedures for registering excise goods with clear guidelines and standards in addition to the new reporting requirements related to excise tax returns and declarations.

The launch is aligned with the UAE leadership’s directives to enhance the country’s global competitiveness through continuous improvement of government services and ensuring accurate and transparent processes.

The FTA called on all businesses dealing with excise goods to follow the new process of registering excise goods and ensure all required documents are readily available when submitting the registration request for the goods. The requirements clarified in the new guides include products details, ingredients, marketing information including images and videos, lab tests in some cases, and the retail price of the product based on the UAE retailers or in the relevant country in case it is not sold in the UAE.

In relation to the new reporting requirements of the excise tax, the authority urged the excise taxable persons to comply with the new declarations and tax return forms and reporting requirements including import, produce, release from designated zones, and local purchase scenarios, which ensures increased transparency and accuracy. Additionally, The Authority pointed to the new manuals and guides it launched to raise awareness among taxpayers and offer them instructions on how to register excise goods in the new system, and comply with the new reporting requirements and forms in the excise tax system. The FTA invited businesses subject to excise tax to make use of these manuals to educate their staff about the new system, as well as the procedures for implementing excise tax in general.

Any Person who produces or imports an excise good to be sold in local markets is subject to excise tax, as is any Person who stockpiles said goods or releases them from a designated area, the FTA asserted, urging all relevant businesses to take the initiative and register their excise goods in the new system, as per the terms and conditions stipulated in the Cabinet Decision on excise goods, which specifies the tax rates they are subject to and outlines the method used to calculate excise prices.

The FTA asserted that there is no threshold for excise tax, meaning that any business with activities involving excise goods is required to go ahead and register in the new system, calculate its tax amounts, and refer to the FTA website for information and manuals that outline the required procedures for producers and importers of excise goods, and for excise goods stored in designated zones.

Expo 2020 Dubai to help drive VAT revenues over $8bn this year

Date: 14 Aug, 2019

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External URL: https://www.arabianbusiness.com/politics-economics/425747-expo-2020-dubai-to-help-drive-vat-revenues-over-8bn-this-year

Increased spending on Expo 2020 will help value added tax (VAT) revenues in the UAE push to over $8 billion (AED30bn) this year, according a Dubai-based tax consultancy.

Revenues will also be boosted by a growth in retail, hospitality, aviation and shipping, but Rajiv Hira, chairman, RHMC Management Consultants, said the huge increases will not be sustained over the longer term.

Hira told Arabian Business: “Considering the distribution of $7.3bn (AED27bn) on account of value-added tax, it can be easily concluded to touch around $8bn (AED30bn), although we will be observing an increase in capital spending at a faster and larger scale, whereas VAT collection will not increase in that speed, due to the following factors: Entities will be entitled able to claim input tax on capital spending; and VAT is already paid on account of advances for the projects related to 2020 (including other capital spendings).”

Dubai businessman Khalaf Al Habtoor urges for end to Skype ban in UAE

Date: 07 Aug, 2019

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External URL: https://gulfbusiness.com/dubai-businessman-khalaf-al-habtoor-urges-for-end-to-skype-ban-in-uae/

Dubai billionaire businessman Khalaf Al Habtoor has urged the UAE leadership to reconsider fees such as VAT while also renewing his call to lift the ban on VoIP services such as Skype and WhatsApp.

“Our region is going through tough political conditions that affect the economic climate in general,” the founder and chairman of conglomerate Al Habtoor Group said on Twitter.

The Emirati businessmen urged UAE leaders “to reconsider some of the laws, practices and fees imposed, which will have a positive impact on the economy”.

The UAE imposed a 5 per cent value added tax (VAT) on goods and services in January 2018.

Tally Solutions Hosts ‘Bahrain VAT Summit’ to Discuss VAT Implementation and Compliance in the Next Half Year of 2019

Date: 07 Aug, 2019

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External URL: https://www.albawaba.com/business/pr/tally-solutions-hosts-%E2%80%98bahrain-vat-summit%E2%80%99-discuss-vat-implementation-and-compliance

Tally Solutions, a leading international accounting and compliance software provider, recently hosted a summit on value-added tax (VAT) in Bahrain as part of its ongoing efforts to raise awareness of businesses on the new taxation system in the country.

The recently concluded ‘Bahrain VAT Summit’ at the Sheraton Bahrain Hotel featured renowned VAT and technology experts, who shed light on the changes that had taken place in the country six months after the implementation of the VAT law. They also tackled the proposed steps that could be taken in the remaining half of 2019 to ensure correct and timely VAT compliance and implementation.

Guest speaker Manu Nair, CEO of the Emirates Chartered Accountants Groups, discussed the key reforms rolled out at the national level during the first 180 days of VAT implementation and their subsequent business impact. Further, Nair highlighted the expectations in the next 180 days of VAT in the country to help companies prepare better.

The attendees consisted of VAT-registered businesses with queries around the new law; companies which were planning to voluntarily register; and enterprises with questions about the registration requirements for the second and third phases of VAT deployment.

UAE VAT collection set to grow 30% to Dh35 billion in 2019

Date: 01 Aug, 2019

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External URL: https://www.khaleejtimes.com/business/local/uae-vat-collection-set-to-grow-30-to-dh35-billion-in-2019-

Greater compliance due to new legal aspects such as country-by-country reporting and Base Erosion and Profit Shifting (Beps), increased spending for Expo 2020, and more companies listing for value-added tax (VAT) will help the UAE to increase its revenues through VAT by up to 30 per cent this year, say tax experts.

Jomon K. George, chairman of The Institute of Chartered Accountants of India’s South Region, estimated that the UAE’s VAT collection is expected to increase by Dh8 billion or 30 per cent in 2019 to reach Dh35 billion as compared to Dh27 billion last year.

“With increased Expo 2020 spending, VAT revenues would easily be Dh35 billion-plus this year. The way Expo is being marketed by Dubai, naturally the spending and consumption will increase which will enhance tax collection in the UAE, notably in Dubai,” George said.

Sangeetha Nahar, executive member of The Institute of Chartered Accountants of India (ICAI) – Dubai chapter, believes that awareness is spreading and the market is becoming more mature.

Banned in UAE: Sale and possession of cigarettes without Digital Tax Stamps is prohibited from 1st August

Date: 01 Aug, 2019

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External URL: https://gulfnews.com/uae/government/banned-in-uae-sale-and-possession-of-cigarettes-without-digital-tax-stamps-from-august-1-1.1564572318879

Abu Dhabi: From tomorrow, August 1, the sale and possession of all types of cigarettes not bearing the Digital Tax Stamps will be prohibited across UAE markets – the Federal Tax Authority (FTA) announced.

Prohibiting the sale in local markets of cigarettes packets not bearing the Digital Tax Stamps is part of the timeline set for the ‘Marking Tobacco and Tobacco Products Scheme’, which went into effect at the beginning of 2019.

What does the tax stamp mean?

The scheme seeks to electronically track cigarettes packs from the production facility and until they reach the end-consumer, in order to protect consumers from low-quality products, combat tax evasion, and ensure that the Excise Tax due on these products has been settled.

This is as per Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products and FTA Decision No. (3) of 2018 on Implementing the Marking Tobacco and Tobacco Products Scheme.

“The Authority has sought to implement an integrated and widespread awareness campaign starting from the second quarter of 2018 – several months before the ‘Marking Tobacco and Tobacco Products Scheme’ went into effect – to allow sufficient time for local markets to prepare for the Scheme and avoid any adverse effects to their commercial activities,” FTA Director General Khalid Ali Al Bustani explained.

“Furthermore, the Authority collaborated with the system operator to carry out an extensive awareness campaign through its official website, social media accounts, newspapers, television, and radio. Workshops were organised, bringing together individuals and organisations involved in the manufacture and trade of tobacco and tobacco products, introducing them to the Scheme, and answering their queries.”

Public Clarification Disbursements and Reimbursements -Ref#VATP013

Date: 01 Aug, 2019

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External URL: http://www.allaboutvat.com/wp-content/uploads/Public-Clarification-No.13.pdf

In commercial transactions, a person may incur expenses and subsequently recover such expenses from another party. The VAT treatment of the subsequent recovery of expenses depends on whether the recovery is
tantamount to a “disbursement” or “reimbursement”.

VAT Public Clarification Disbursements & Reimbursements VATP013

Date: 31 Jul, 2019

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External URL: http://www.allaboutvat.com/wp-content/uploads/VATP013-Disbursements-and-Reimbursements.pdf

The key elements to consider payments as disbursements:

The payments should be made as an agent of the principal.

The invoice should be in the name of principal.

There should be authorisation from principal for payt.

There should not be any markup on the transaction.

VAT Public Clarification VAT Treatment of Options and Option Premiums VATP014

Date: 31 Jul, 2019

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External URL: http://www.allaboutvat.com/wp-content/uploads/VATP014-Public-clarification-Option-premiums.pdf

This PC clarifies that options in only equity and dent instruments would be treated as exempt.

Significantly tax credit notes can be issued for reversing any earlier wrongly charged VAT and the resultant VAT impact should be executed by both the parties in their VAT records.

Designated Zones for the purposes of the Federal Decree-Law No. (8) of 2017 on  Value Added Tax

Date: 31 Jul, 2019

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External URL: http://www.allaboutvat.com/wp-content/uploads/Designated-Zones-11-07-2019-Latest.pdf

Based on:
– Cabinet Decision No. (59) of 2017 on Designated Zones for the purposes of the
Federal Decree-Law No. (8) of 2017 on Value Added Tax (effective 1 January
2018); and
– Cabinet Decision No. (35) of 2018 on Amending the List of Designated Zones
Annexed to the Cabinet Decision No. (59) of 2017 on Designated Zones for the
purposes of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (effective
18 June 2018).
– Cabinet Decision No. (43) of 2019 on Amending the List of Designated Zones
Annexed to the Cabinet Decision No. (59) of 2017 on Designated Zones for the
purposes of the Federal Decree-Law No. (8) of 2017 on Value Added Tax (effective
4 July 2019).

NBR holds two consecutive VAT workshops

Date: 29 Jul, 2019

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External URL: https://www.nbr.gov.bh/releases/56

The National Bureau for Revenue (NBR) held two consecutive interactive VAT workshops to recap general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 138 attendees representing 85 entities were given the opportunity to visit a unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.

Today’s workshop is a continuation of the series of workshops organised by the NBR to provide an inclusive platform for all stakeholders from the public and private sector in order to increase businesses’ awareness of VAT return filing procedures ahead of deadlines.

Bahrain’s economic growth to decelerate further in 2019

Date: 25 Jul, 2019

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External URL: https://www.ameinfo.com/industry/finance/bahrains-economic-growth-decelerates-2019

The economic outlook for Bahrain’s economy remains clouded by persistent weakness in government finances, evident by significant fiscal deficits and rising public debt levels, large external financing needs, a general slowdown in non-oil activity and limited prospects for oil sector growth.

According to ICAEW’s latest Economic Insight report, economic growth in Bahrain more than halved last year, from 3.7% in 2017 to 1.8% in 2018, with further deceleration seen in 2019 to 1.6% amid a major drive to overhaul government finances, which include spending cuts, new taxes and other fiscal consolidation measures.

FTA Board of Directors Holds 9th Meeting, Showcases Report on the Authority’s Accomplishments and Ongoing Development Projects

Date: 24 Jul, 2019

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External URL: https://www.tax.gov.ae/press-releases/FTA-Board-of-Directors-Holds-9tht

The Board of Directors of the Federal Tax Authority (FTA) held its ninth meeting today (Wednesday, July 24, 2019) headed by FTA Chairman His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance, at the Ministry of Finance’s headquarters in Dubai.

The Board looked into the performance of the FTA’s various systems, which facilitate registration, the submission of Tax Returns, and refunding tax to legally eligible groups through multiple Schemes, including the VAT refunds for nationals building new residences in the UAE, the Tax Refunds for Tourists Scheme, and the VAT Refunds for Business Visitors.

The FTA Board of Directors ratified the Authority’s financial statements for 2017 and 2018, and approved several executive decisions regarding the FTA’s internal regulatory and administrative policies and operations. Attendees at the meeting then went on to showcase the Authority’s recent accomplishments, where the various tax schemes have exhibited improved performance, and the number of businesses and tax groups registered for VAT surpassed 307,000, while the number of those that registered for Excise Tax totalled 724.

Furthermore, the figures revealed that the user base for the tax system is expanding rapidly, which compelled the Authority to authorise more than 123 clearing and forwarding companies, increase the number of accredited Tax Agents to 395, and commission 28 accredited tax accounting software vendors.

H.H. Sheikh Hamdan bin Rashid Al Maktoum applauded the FTA’s performance and achievements, which were also lauded by experts, as well as local and international institutions. H.H. went on to highlight the Authority’s efforts to achieve the tax system’s stated developmental, economic, and social objectives, citing the strategic partnerships the FTA has forged with government and private entities, which catalysed the drastic increase in self-compliance rates and in tax awareness among taxpayers and the public.

“The tax system has begun achieving many of its main objectives, most notably the diversification of the UAE’s resources,” H.H. added. “This allows us to continue providing high-quality services for future generations, in line with the UAE Vision 2021 and its objectives to build a sustainable ecosystem and integrated infrastructure.”

NBR holds two consecutive VAT workshops

Date: 23 Jul, 2019

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External URL: https://www.nbr.gov.bh/releases/55

The National Bureau for Revenue (NBR) held two consecutive interactive VAT workshops to recap general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 210 attendees representing 125 entities were given the opportunity to visit a unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.Today’s workshop is a continuation of a series of workshops organised by the NBR to provide an inclusive platform for all stakeholders from the public and private sector in order to increase businesses’ awareness of VAT return filing procedures ahead of deadlines. 

UAE must allow itself flexibility on tax regime

Date: 23 Jul, 2019

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External URL: https://gulfnews.com/business/analysis/uae-must-allow-itself-flexibility-on-tax-regime-1.65340045

VAT itself must be treated as a work in progress and changes made where and when needed.

In 2018, the UAE’s Gross Domestic Product (GDP) was estimated at $414 billion. It was in the same year that a value-added tax (VAT) of 5 per cent was introduced for the first time, with a targeted revenue of Dh12 billion.

The federal share of the revenues was set at 30 per cent, and the seven emirates claiming the remainder 70 per cent. According to the CIA Factbook’s 2017 estimates, UAE’s household consumption alone represented 34.9 per cent of GDP, which when multiplied by $414 billion and then by 5 per cent produces a projected VAT revenues’ figure of Dh26.5 billion.

That said, VAT revenues collected in 2018 surpassed the announced target, with Dh27 billion. Of the Dh27 billion, Dh8.1 billion went to the federal government and Dh18.9 billion to the seven emirates in proportion to the share of VAT-related transactions that took place in each emirate.

As a result, Dubai claimed the highest share among the seven, receiving more than 40 per cent of the Dh27 billion collected in VAT revenues. Given that more than one year elapsed since VAT’s introduction, it is time to discuss its impact and what can be improved moving forward.

NBR holds two consecutive VAT workshops

Date: 23 Jul, 2019

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External URL: https://www.nbr.gov.bh/releases/55

The National Bureau for Revenue (NBR) held two consecutive interactive VAT workshops to recap general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 210 attendees representing 125 entities were given the opportunity to visit a unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.Today’s workshop is a continuation of a series of workshops organised by the NBR to provide an inclusive platform for all stakeholders from the public and private sector in order to increase businesses’ awareness of VAT return filing procedures ahead of deadlines.

Federal Tax Authority showcases progress made on Indirect Taxes in the UAE

Date: 18 Jul, 2019

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External URL: https://www.ameinfo.com/industry/real-estate/federal-tax-authority-indirect-taxes-uae

The Federal Tax Authority (FTA) is invested in facilitating procedures for the Value Added Tax (VAT) Recovery on the Building of New Residences by UAE Nationals programme, asserted His Excellency Khalid Ali Al Bustani, FTA Director General, at a discussion held at the Majlis of H.E. Abdullah Muhair Al Kutbi in Al Mushrif, Abu Dhabi.

“The VAT Recovery on the Building of New Residences by UAE Nationals programme is in line with the wise leadership’s vision to develop a modern housing system for citizens and ensure their wellbeing,” H.E. Al Bustani explained, revealing that the second quarter of 2019 witnessed significant growth in the number and value of transactions submitted by UAE nationals who’ve built new homes. More than 390 applications – worth approximately AED18 million ($4.9 million)– were submitted in Q2 2019 by UAE citizens who successfully recovered the taxes they incurred on building their homes, up from 235 application (worth AED9.76 million or $2.66 m) submitted in Q1 2019. This amounts to a 66% growth in the number of applications received and an 84.4% increase in the value of these transactions.

NBR holds an interactive workshop for professionals working in the real estate, construction, and manufacturing sectors

Date: 17 Jul, 2019

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External URL: https://www.nbr.gov.bh/releases/52

The National Bureau for Revenue (NBR) held an interactive VAT workshop for professionals working in the real estate, construction, and manufacturing sectors to recap general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 189 representatives from 113 entities were given the opportunity to visit a unique interactive demo-center that provides an innovative learning experience in order to ensure effective implementation of VAT.

Today’s workshop is a continuation of a series of workshops organised by the NBR to provide an inclusive platform for all stakeholders from the public and private sector to increase awareness of VAT return filing procedures ahead of deadlines.

FTA reports 110 percent growth in number of authorised tax agents in 2019

Date: 16 Jul, 2019

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External URL: https://www.emirates247.com/news/emirates/fta-reports-110-percent-growth-in-number-of-authorised-tax-agents-in-2019-2019-07-16-1.687012

The first half of 2019 saw the number of authorised tax agents increase by more than 110 percent to exceed 370 agents, up from 176 at the end of 2018, asserted the Federal Tax Authority, FTA, as it hosted the second Meeting of Tax Agents.

The authority noted that the growth in the number of authorised agents provides a wider array of options for taxable persons or entities who choose to deal with the authority via an agent. This, in turn, promotes self-compliance among businesses, as it offers them counsel and support to carry out their tax obligations.

FTA Director-General, Khalid Ali Al Bustani, inaugurated the meeting, which was attended by all 370 tax agents. He said, “These periodic meetings truly embody the effective collaboration between government entities and the private sector, which work together for the greater good and to elevate the national economy.”

Noting that the authority has published a series of guides and e-learning modules on its website covering the legislative and executive aspects of the tax system, Al Bustani urged tax agents to benefit from these publications and study them extensively to improve their knowledge of the UAE tax system.

IMF urges Oman to introduce VAT as soon as possible

Date: 12 Jul, 2019

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External URL: https://www.arabianbusiness.com/politics-economics/423492-imf-urges-oman-to-introduce-vat-as-soon-as-possible

The International Monetary Fund has urged Oman to introduce VAT as soon as possible as the sultanate’s economic recovery from the 2014 oil price shock remains subdued.

The UAE and Saudi Arabia were the first countries in the GCC to introduce a 5 percent VAT on January 1 2018 while Bahrain made the move a year later but Oman, Kuwait and Qatar have not yet implemented the tax.

While welcoming the Oman’s plans to continue with fiscal consolidation, IMF directors called for an expeditious introduction of VAT and measures to adjust government spending.
They also encouraged Omani authorities to implement an ambitious medium-term fiscal adjustment plan, based on reforms to tackle current spending rigidities, streamline public investment, and raise non-hydrocarbon revenue.

The recommendations were made by the executive board of the IMF following the conclusion of a Article IV consultation with Oman.

The IMF said since the 2014 oil price shock, Oman’s policy efforts have aimed at strengthening the fiscal position, enhancing private sector-led growth and employment, and encouraging diversification.

It added that economic activity started to recover last year, and the overall fiscal and current account deficits improved somewhat, reflecting mainly higher oil prices.

Daily cash limit for VAT refunds set at AED7,000

Date: 10 Jul, 2019

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External URL: http://wam.ae/en/details/1395302772660

H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance and Chairman of the Federal Tax Authority (FTA), has issued FTA Decision No. (1) of 2019, setting a daily maximum of AED7,000 for cash refunds of Value Added Tax (VAT) for tourists applying through the Tax Refunds for Tourists Scheme.

In a press statement issued today, the FTA asserted that the Tax Refunds for Tourists Scheme, which entered into effect in November 2018, is characterised by its efficiency, seamless procedures, speed, and accuracy in processing applications.

FTA Director-General Khalid Ali Al Bustani said: “The new decision regarding the maximum daily amount a tourist can reclaim in cash is in line with the UAE’s overall strategy to reduce reliance on cash in financial transactions, and benefit from the country’s advanced digital and technological infrastructure. These systems are key components in driving the continuous development of the UAE’s financial and economic sectors; they facilitate the flow of money and financial assets securely, increasing trust in financial transactions – both local and international.”

“The Federal Tax Authority is committed to implementing the highest international standards across all its activities and services, in line with the directives of the UAE’s wise leadership to make the UAE one of the best countries in the world by 2021,” he added. “We are committed to maintaining the UAE’s competitiveness as the only Arab economy that is based on innovation and creativity. The new decision abides by best practices implemented in advanced economies, which prioritise effective and holistic risk management and promote e-payment solutions.”

New shisha tobacco, e-cigarettes tax rule announced in UAE

Date: 10 Jul, 2019

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External URL: https://www.khaleejtimes.com/business/vat-in-uae/new-shisha-tobacco-e-cigarettes-tax-rule-from-november-1

His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, and Chairman of the Federal Tax Authority, FTA, has issued a Decision whereby the “Marking Tobacco and Tobacco Products Scheme” will be implemented on water pipe tobacco and electrically heated cigarettes as of November 1, 2019.

The decision also determines the dates when “Digital Tax Stamps” will be made available, as well as the standards for stockpiling them.

The authority has explained that the scheme facilitates inspections at local markets and customs ports to prevent the sale of contraband products and goods where the tax liability was not paid, and combat commercial fraud. Digital Tax Stamps will be placed on packages of tobacco products and registered in the FTA database.

The stamps store digital information that can be read with a special device to verify that all taxes due on the said products have been paid.

 

Do not fall for this VAT refund scam

Date: 09 Jul, 2019

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External URL: https://gulfnews.com/uae/crime/uae-bank-warning-do-not-fall-for-this-vat-refund-scam-1.65084300

If you have got a purported email from Mashreq Bank asking you to seek value added tax (VAT) refunds by submitting your bank details, banish the thought. It’s a phishing scam!

Of late, several Mashreq Bank customers have got a dodgy email saying they are eligible to receive over Dh10,000 in VAT refunds based on ‘last audit calculations of their fiscal activity”.

Customers are then instructed to enter their credit card details, compete with CVV numbers and expiry dates in an accompanying form and send it back by email.

How do I charge VAT for items that are not sold yet?

Date: 09 Jul, 2019

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External URL: https://www.thenational.ae/business/money/how-do-i-charge-vat-for-items-that-are-not-sold-yet-1.884236

My business supplies sportswear and accessories, with one of our sales channels on a sale or return basis to gyms and yoga studios. We recently registered with the FTA [Federal Tax Authority] and want to know how to account for VAT on items not paid for by my clients until they are ultimately sold to their customer. It seems unfair to raise a tax invoice and demand immediate payment when I send stock to the gym, even though they will not pay for the goods until months later or possibly return the items and not pay at all. LL, Abu Dhabi

The sales model you describe is typically known as consignment, sale on approval, or sale or return. Under this arrangement the supplier will provide products to the buyer but the buyer is not obliged to pay until he has sold them to his customer, or he agrees to take ownership of them from the supplier.

Typically if the items remain unsold, the customer can return them to the supplier without payment. Customers like this arrangement because all the risk stays with the supplier. However, this type of sale creates some confusion from an accounting and VAT perspective.

Because the customer does not take legal ownership of the products until they are sold on, account for them as your stock until the final sale happens, even though they are not physically in your possession.

Shipping and logistics VAT guide released

Date: 07 Jul, 2019

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External URL: https://www.khaleejtimes.com/business/local/shipping-and-logistics-vat-guide-released

WTS Dhruva Consultants has published a comprehensive guide on ‘VAT implications on the shipping and logistics sector’ for companies engaged in the business. This is its second publication, the first being on the UAE healthcare.

The guide covers a wide range of topics across various service lines and will be a relevant tool to a wide cross-section of organisations within the sector, as it highlights the VAT implications on transportation, supply/leasing of vessels, warehouses, and courier agencies’ activities.

Dinesh Kanabar, CEO and founder of WTS Dhruva Consultants, says that “a majority of tax jurisdictions apply for exemptions and/or zero-ratings to the inbound and outbound transportation of goods, whereas the transportation of goods locally attracts taxes. In the UAE, inbound and outbound transportation is zero-rated, while the transport of goods locally is subject to VAT at five per cent.”

The guide has deliberated on whether local transportation can be treated as zero-rated if the same is linked to the international movement. It also addresses the VAT treatment on different reimbursable expenses incurred at the port by the shipping lines, freight forwarders, agents, etc.

Emirates NBD offers VAT-based loan solution to SMEs

Date: 03 Jul, 2019

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External URL: https://www.sme10x.com/finance/emirates-nbd-offers-vat-based-loan-solution-to-smes

It’s just been one year since the introduction of VAT in the UAE and while there have been many learnings, many SMEs have also faced a range of challenges. To cater to the market’s needs, Emirates NBD, Dubai’s largest bank, has launched a new VAT-based loan solution for SME customers.

The new programme makes the lending application process easy for SMEs. They can now get their business turnover and income validated by simply providing copies of the VAT returns filed with the UAE’s Federal Tax Authority. To begin with, home, auto and business loan products will be offered.

This programme also addresses one of the biggest challenges faced by SMEs in the region: getting bank loans. Bank lending remains the lowest in the region at 5%, and understandably so as banks face loss rates as high as 20%, as revealed by Mashreq Bank.

Federal Tax Authority launches new website

Date: 03 Jul, 2019

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External URL: https://www.thenational.ae/business/technology/federal-tax-authority-launches-new-website-1.881848

The UAE Federal Tax Authority (FTA) launched its upgraded website with a bundle of services and amenities for users, also enabling them to submit forms online.

“The Federal Tax Authority has designed its new website in accordance with international best practices,” said FTA director general Khalid Ali Al Bustani

“The site plays a fundamental role as the main platform of the Federal Tax Authority in order to keep pace with the rapid technological development in this area. It has been configured to provide the best services for business, facilitate optimum access to customers and employs the latest technologies to enhance interaction between the authority and the various business sectors around the clock.

“All forms have been automated to ensure the validity of the data submitted to the authority and thus help speed-up the authority’s response to taxpayers’ requests. The site also provides a comprehensive tax library for all guides, e-learning programs, videos and simplified graphics.”

Mr Al Bustani said he hoped the website would contribute to improving the electronic experience of taxpayers and that it would enhance user interaction.

NBR holds an interactive VAT workshop

Date: 03 Jul, 2019

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External URL: https://www.nbr.gov.bh/releases/51

The National Bureau for Revenue (NBR) held an interactive VAT workshop, during which general and sector-specific VAT concepts, including invoicing and filing, were recapped. Following a question-and-answer session, 75 attendees representing 54 entities were given the opportunity to visit a unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.

Today’s workshop is a continuation of the series of workshops organised by the NBR to provide an inclusive platform for all stakeholders from the public and private sector in order to increase businesses’ awareness of VAT return filing procedures ahead of deadlines.

VATP012 - Importation of goods by agents

Date: 02 Jul, 2019

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External URL: http://www.allaboutvat.com/wp-content/uploads/VATP012-Importation-of-goods-by-agents.pdf

New clarification VAT P012 on import of goods by agents or customer of owner of goods.

Agent/customer can reverse in box 7, the pre-populated import in box 6.

Also, the owner of goods has to pass positive adjustment in box 7.

There needs to be an agreement in place between the agent/customer and the owner of goods.

Alternate arrangement still available where the agent gives a statement and recovers the VAT from owner of goods. However, he will not claim RCM credit in box 10.

Bahrain scraps fees on 200 government services

Date: 02 Jul, 2019

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External URL: https://www.arabianbusiness.com/politics-economics/423199-bahrain-scraps-fees-on-200-government-services

Bahrain has decided to scrap fees on up to 200 government services, it was announced in a cabinet meeting on Monday, according to a report by the Gulf Daily News website.

While the list of services which would now be free was not named in the report or by the cabinet, it was also revealed that an additional 220 government services will be exempted from value-added taxes for Bahraini nationals.

The decision means a total of 1,620 services will now be VAT-exempt for Bahraini citizens.

The decision was ordered by Prime Minister Prince Khalifa bin Salman Al Khalifa following King Hamad’s order to review all tax measures.

VAT was introduced in Bahrain in January 2019 in a bid to diversify and increase government revenues.

 

UAE VAT collection exceeds expectations

Date: 01 Jul, 2019

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External URL: https://www.sme10x.com/10x-industry/uae-vat-collection-exceeds-expectations

In its first step to reduce dependency on oil revenues, UAE introduced the 5% Value Added Tax (VAT), implemented since the 1st of January 2018.

According to Moody’s report, UAE’s collection of tax has far exceeded original estimates.

As per government data, VAT collections totalled AED 27 billion ($7.4 billion) in 2018, compared to an anticipated AED 12 billion ($3.3 billion). This amount was also higher than the government’s projection of AED 20 billion ($5.5 billion) in 2019.

Of the total VAT collection, UAE’s federal government will retain 30 percent (AED 8.1 billion) while the remaining AED 18.9 billion will be divided amongst the country’s seven emirates.

According to the report, Dubai was the largest beneficiary of VAT, receiving approximately 60% share of the revenue attributed to the emirates and 42% of total revenue.

Dubai biggest beneficiary of VAT revenue

Date: 01 Jul, 2019

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External URL: https://www.khaleejtimes.com/business/vat-in-uae/dubai-biggest-beneficiary-of-vat-revenue-12

Dubai was the largest beneficiary among the seven emirates in value-added tax (VAT) collection last year, receiving 42 per cent or Dh11.34 billion of the Dh27 billion total, Moody’s Investors Service said.

Data from the global ratings agency showed that the federal government will retain 30 per cent, or Dh8.1 billion, of the collected revenues while the remaining Dh18.9 billion, or 70 per cent, will be divided among the emirates.

After Dubai and the federal government, Abu Dhabi will receive 18 per cent (Dh4.85 billion). Sharjah will get 6 per cent (Dh1.61 billion) and the Northern Emirates will receive 4 per cent (Dh1.1 billion).

The UAE levied 5 per cent VAT on selected goods and services from January 1, 2018, in order to boost revenues and diversify economy away from hydrocarbon dependence. The Federal Tax Authority collected Dh27 billion in VAT revenues in 2018, surpassing its 2018 target of Dh12 billion and even the 2019 target of Dh20 billion.

Thaddeus Best, analyst at Moody’s Investors Service, said the UAE surpassing its 2018 VAT collection target by 125 per cent is credit-positive for the country.

FTA approves 390 requests to refund housing tax worth AED17.52 million: FTA Director-General

Date: 26 Jun, 2019

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External URL: http://wam.ae/en/details/1395302770434

Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, FTA, revealed that the FTA approved 390 requests to refund housing tax worth AED17.52 million, in implementation of the vision of the UAE’s leadership to create a modern housing system for UAE citizens and provide them with the best living standards.

In statements to the Emirates News Agency, WAM, Al Bustani revealed that the number of registrations in the VAT system exceeded 300,000 while the number of registrations in the excise tax system totalled around 724.

The FTA also highlighted the positive outcomes of partnerships agreements signed with relevant authorities and noted their key contributions to the successful adoption of the tax system while stressing that the e-connectivity systems used jointly by the FTA, the Federal Customs Authority and the local customs departments have ensured the easy adoption of the tax system while the e-connectivity system used jointly by the Ministry of Finance and the UAE Central Bank have facilitated the payment of due taxes.

The UAE Central Bank’s “UAEFTS” system is the country’s main tax refund system, includes several payment options, and offers tax payment services in 77 bank branches, exchange offices and financial companies through their “GIBAN” reference. Payments can also be made through the “e-AED” platform.

The FTA also began implementing a VAT refund option for visiting foreign businesses” in April, and launched 60 manuals on VAT and excise tax, as well as e-learning programmes, short awareness films and over 50 flyers.

The Authority noted that it provided 266 workshops for instructions related to taxation in the business sector. It also organised 95 seminars attended by 30,000 specialists from various business sectors.

 

High VAT revenues fortify UAE government finances

Date: 25 Jun, 2019

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External URL: https://gulfnews.com/business/high-vat-revenues-fortify-uae-government-finances--moodys-1.64834236

The UAE’s value added tax (VAT) collections in the first year exceeded the original estimates and is driven by strong tax compliance, according to credit rating agency Moody’s.

“The government’s 2018 and 2019 VAT revenue forecasts had included conservative assumptions regarding the level of compliance in the initial years of implementation. Nonetheless, the robust level of compliance in the first year of the tax framework is a positive reinforcement of the UAE’s high institutional strength,” Thaddeus Best, an analyst at Moody’s wrote in a report.

Moody’s which rates the UAE at Aa2 stable believes that the stronger than expected tax revenues is credit positive for the country.
VAT collection data released by the government showed collections were far higher than expected, reaching Dh27 billion ($7.4 billion) in 2018 compared to the government’s original projection of Dh12 billion ($3.3 billion), and higher even than the government’s 2019 projection of Dh20 billion ($5.5 billion).

According to Moody’s report, the federal government will retain Dh8.1 billion (30 per cent of collected revenues) while the remaining Dh8.9 billion will be divided among the emirates.

44% of UAE SMEs still unaware of automated VAT solutions

Date: 21 Jun, 2019

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External URL: https://www.khaleejtimes.com/44-of-uae-smes-still-unaware-of-automated-vat-solutions

It has been more than 17 months since the UAE introduced the value added tax (VAT) but 44 per cent of small and medium-sized enterprises (SMEs) still perform their daily tasks manually for VAT records and filing returns as they are unaware of automated solutions, revealed a survey conducted by Tally Solution.

Vikas Panchal, business head for the Middle East at Tally Solutions, said that such a low level of awareness is due to a prevailing perception in the market that VAT-compliant business management software is for larger companies only.

“As a result, investment in such a software programme is relegated in the backseat, not knowing that giving it a priority is the key to ensuring correct VAT compliance. This is further compounded by limited understanding of VAT, resistant to change, and budget constraint,” said Panchal.

SMEs should consider it as an investment rather than expenses because committing mistakes while filing VAT returns can result in fines and penalties, he added.

The survey covered over 200 small and medium-sized businesses in the UAE.

VAT Administrative Exceptions User Guide

Date: 20 Jun, 2019

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External URL: http://www.allaboutvat.com/wp-content/uploads/VAT-Administrative-Exceptions-Form-Final.pdf

FTA has introduced the VAT Administrative exception formality where taxable persons can seek concessions /exceptions as per VAT laws for the following categories:

Tax Invoices – Exceptions for raising tax invoice or not mentioning particulars required.

Tax Credit Notes – Exceptions for not raising tax credit notes or not mentioning particulars required.

Length of Tax Period – Tax Period Change to Monthly, Quarterly or Half yearly.

Stagger of Tax Period – Staggering of tax period to end with the month requested by tax payer.

Extension of time for exports – Extension for physical export of goods beyond 90 days.

FTA may take 40 business days on Decision for Tax Invoice, Credit Notes, Tax Period Length or Staggering of Tax Period.

FTA may take upto 20 business days for Decision on export of goods extension.

VAT-Administrative-Exceptions-Form

NBR holds an interactive workshop for representatives working in the service sector

Date: 20 Jun, 2019

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External URL: https://www.nbr.gov.bh/releases/50

The National Bureau for Revenue (NBR) held an interactive VAT workshop for professionals working in the service sector, during which the NBR recapped general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 118 representatives from 74 vendors were given the opportunity to visit the unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.

Today’s workshop is a continuation of the series of workshops organised by the NBR to provide an inclusive platform for all stakeholders from the public and private sectors to ensure the smooth registration of companies with an annual supply of BHD 500,000 to BHD 5,000,000 by June 20th, 2019.

Will VAT rate go up in GCC?

Date: 17 Jun, 2019

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External URL: https://www.khaleejtimes.com/will-vat-rate-go-up-in-gcc

The GCC states will eventually increase value-added tax (VAT) rate, which is one of the lowest in the world, but it could take years before the regional government agree to hike it, tax experts said at a summit on Monday.

Surandar Jesrani, managing partner and chief executive officer (CEO) of MMJS Tax Consultancy, said the UAE and Saudi Arabia cannot unilaterally raise VAT as it is GCC-wide framework agreed among all the six member nations.

“The International Monetary Fund (IMF) is a driving factor as the whole GCC VAT is an IMF initiative. The GCC could increase VAT rate but we don’t know when. But it cannot be unilateral,” he said.

The IMF recently recommended that five per cent VAT levied in Saudi Arabia and the UAE as part of a GCC-wide framework should be raised, saying it is low by global standards. “The region really needs to understand when it is right time for the increase. Considering current economic situation, five per cent is fair now. However, there could be an increase,” Jesrani said.

 

2nd phase of VAT registration deadline

Date: 15 Jun, 2019

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VAT Registration

VAT registration is the process through which a subject to VAT entity requests to be enrolled for VAT. Upon registration, a dedicated VAT account number will be assigned to the entity.

Mandatory Registration

  1. All entities subject to VAT generating or expected to generate more than BHD 5,000,000 in annual supplies of goods and services are legally required to register for VAT by December 20th, 2018.
  2. All entities subject to VAT generating or expected to generate between BHD 500,000 and BHD 5,000,000 in annual supplies are required to register by June 20th, 2019.
  3. All entities subject to VAT generating or expected to generate between BHD 37,500 (mandatory threshold) and BHD 500,000 in annual supplies are required to register by December 20th, 2019.

Process for registration

  1. To register for VAT, VAT payers must first create NBR profile.
  2. The VAT payer is required to populate the NBR form and specify their information including:
    • VAT payer details (Legal name, Legal form, Address, contact details, VAT eligibility date etc.)
    • Commercial registration details (CR Number, CR date, Subsidiary details, Sector etc.)
    • Financial information (annual value of supplies, expenses, imports and exports)
    • Registrant details (Name, identification number, DOB, job title etc.)
    • Documentation (commercial registration certificate, customs registration certificate, audited financial statements, copy of registrant ID, etc.)
  3. The VAT payer submits the profile creation request. This NBR profile can be created online.
  4. If VAT payer’s NBR profile is approved, they will be provided with login details to access the registration form.
  5. The registration form can be completed in a “single click”. This registration form can be accessed online.
  6. Once the submission is reviewed and approved by NBR, The VAT certificate will be available on the VAT payer’s NBR profile.

Abu Dhabi looks at attracting MICE with new VAT waiver

Date: 14 Jun, 2019

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External URL: https://www.traveldailymedia.com/abu-dhabi-looks-at-attracting-mice-with-new-vat-waiver/

Abu Dhabi National Exhibitions Company (ADNEC) announced it has obtained the Free Trade Agreement (FTA) License for waiver from Value Added Tax (VAT) for all international companies and organisations participating in or holding shows and conferences at its venues across the UAE with effect from 1 June.

The VAT waiver covers exhibitions and conferences held over a period not exceeding seven days. The waiver also stipulates that recipients shall not have a permanent base or established business in the UAE and shall not be registered or obliged to register in UAE as per the UAE VAT Law.

Speaking about the development, Humaid Matar Al Dhaheri, group CEO, ADNEC, said, “The VAT waiver for ADNEC-hosted event organisers and participants will further stimulate the business tourism sector in the UAE through enhancing the competitiveness of our venues to host major international exhibitions and conferences. This move supports our strategy to attract new and world-renowned events to our venues and increase our direct and indirect contributions to the Abu Dhabi economy.”

The business tourism sector is a major contributor identified by Plan Abu Dhabi and Abu Dhabi Economic Vision 2030 to accelerate non-oil GDP growth. Through hosting more than 3,390 events and welcoming nearly 17.5 million visitors to date, the venues – Abu Dhabi National Exhibitions Centre and Al Ain Convention Centre – have delivered a direct and indirect economic impact of more than AED32 billion since ADNEC’s inception in 2005, he added.

Tourists to recover VAT through self-service kiosks

Date: 11 Jun, 2019

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External URL: http://wam.ae/en/details/1395302767219

Self-service kiosks have been set up across all the ports included in the Tax Refunds for Tourists Scheme in order to allow tourists to recover Value Added Tax, VAT, when leaving the UAE.

The kiosks are operated by Planet, the company enlisted by the Federal Tax Authority, FTA, to operate the system for the Tax Refunds for Tourists Scheme.

“The kiosks are significant as tourists can recover VAT without the need to interact with employees,” said Khalid Al Bustani, FTA Director-General. “The kiosks are placed at all exit ports included in the Tax Refund Scheme for Tourists, where tourists can submit the tax invoices on their purchases, along with their passport and credit card, to recover VAT. No limit is placed on the maximum amount that can be recovered if the said amount is transferred to the tourist’s credit card. However, in the event that the applicant requests a cash refund, then the maximum amount is set at AED10,000 per day.”

“The new service reflects our commitment to continuously upgrade our services,” he added. “Our periodic follow-ups have revealed a sustained increase in customer happiness with the Tax Refunds for Tourists Scheme, launched in November 2018 in collaboration with system operator Planet. This is part of the government’s plan to establish a legislative, executive, and technological ecosystem that would galvanise the tourism sector – one of the major contributors to national GDP, whereby the UAE has become a major destination for tourists and visitors, offering safety, hospitality, and world-class services.”

The new system consists of integrated mechanisms to connect retail stores registered with the authority and those wishing to register for the Tax Refunds for Tourists Scheme, linking them to the UAE’s ports of entry. This, in turn, allows tourists to apply for tax refunds on their purchases through the system, which operates on the latest technology, if they are eligible to recover VAT as per the terms and criteria specified in Cabinet Decision No. (41) and FTA Decisions No. (1) and (2) of 2018.

The FTA had outlined several conditions for a tourist to be eligible for a tax refund, such as the tourist must be at least 18 years old; must meet the criteria specified in Cabinet Decision No. (52) of 2018 regarding the Executive Regulations of Federal Decree-Law No. (8) of 2017 on VAT, and must exit the UAE along with the purchased items within 90 days.

Top 5 positive changes in GCC, thanks to VAT

Date: 09 Jun, 2019

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External URL: https://www.khaleejtimes.com/business/vat-in-uae/top-5-positive-changes-in-gcc-thanks-to-vat

Following the signing of the Common VAT Agreement by GCC member states, value-added tax (VAT) has become an important step towards ensuring the region’s socio-economic resilience. The new tax regime is a proactive policy meant to diversify the GCC economy, bringing fundamental positive changes to the region. Below are some of these transformative effects felt just more than a year after the system’s implementation.

Increased transparency and accountability

VAT is simpler to implement compared to other indirect taxes. It is also more transparent because the system entails that it be levied at each stage of the supply chain. Indeed, higher transparency and accountability levels are among the benefits of introducing VAT to the regional market.

Companies required to register for VAT purposes contributes to the transparency level by enabling concerned government authorities to track businesses and monitor effectively their compliance. This provision also leads to the creation of a reliable and updated database, thereby aiding the governments in their respective economic performance assessments.

Businesses are critical to collecting VAT from consumers. While before they have limited reporting requirements, companies are now required to maintain all necessary records such as tax invoices and make timely report to the government. To comply with their duties under the VAT tax regime, it is imperative, therefore, that they make sure that their relevant processes and transactions are compliant with the provisions of the law.

UAE's VAT collections exceeds expectations by a wide margin in 2018

Date: 03 Jun, 2019

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External URL: https://www.khaleejtimes.com/business/vat-in-uae/uaes-vat-collection-exceeds-expectations

UAE residents paid Dh27 billion in value-added tax (VAT) last year, surpassing the government’s target of collecting of Dh12 billion, an increase of 125 per cent. It even surpassed the goal of Dh20 billion VAT revenue collections for 2019.

The total VAT collection was also close to the UAE’s nine-month of surplus, which stood at Dh28 billion during the January-September 2018 period.

Analysts expect that VAT revenues will further increase in 2019 as companies analyse their incomes, expenses and IT systems to ensure that correct VAT has been paid. This, in turn, will help the government to increase its spending on the infrastructure and public welfare programmes.

Shoppers can also enjoy VAT-free shopping at one of the malls.

Date: 30 May, 2019

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External URL: https://www.khaleejtimes.com/ramadan-2019/24-hour-mega-sale-for-eid-al-fitr-at-malls-in-uae

24-hour mega sale for Eid Al Fitr at malls in UAE

Shopping malls in Abu Dhabi has announced a 24-hour mega sale during Eid Al Fitr holidays.

For the third year running, Yas Mall is offering visitors big savings and even receive VAT back on purchases of Dh1,000 or above.

Also read: 15-day Ramadan sale in Dubai; free parking, entry

Running straight through from 10am on June 5, 2019, to 10am the following day, shoppers visiting Yas Mall during the 24-hour extravaganza will enjoy incredible exclusive offers and discounts, as well as tax-free shopping.

Also read: Dubai Duty Free announces Eid sale

For all purchases of Dh1,000 or more, shoppers will receive a Yas Mall gift card loaded with their VAT amount. This exclusive offer will only be available during the 24-hour event.

Shoppers can also win instant prizes from mystery boxes and a triple grand prize give away as part of the sale event.

Starting at 10am, Dalma Mall in Abu Dhabi will  be open for 24 hours and offer a Mega Sale from June 5 to June 6, 2019.

The mall will be celebrating four days of mesmerizing Eid festivities starting with the 1st day of Eid Al Fitr.

UAE Cabinet approves VAT revenues distribution between federal and local governments

Date: 30 May, 2019

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External URL: http://wam.ae/en/details/1395302765668

The UAE Cabinet has approved distribution of the value-added tax (VAT) revenues totalled approximately AED27 billion between the federal and local government.

According to the decision 30 percent of the revenue will go to the federal government, and 70 percent to the local governments.

The decision ensures the sustainability and the quality of government services. It also contributes to the development of economic and social projects and public services.

The VAT was introduced in the UAE on 1st January 2018. The rate of VAT is 5 percent. VAT provides the UAE with a new source of income which will be continued to be utilised to provide high-quality public services.

FTA urges tax agents to comply with standards

Date: 28 May, 2019

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External URL: https://www.gulftoday.ae/business/2019/05/28/fta-urges-tax-agents-to-comply-with-standards

The Federal Tax Authority, FTA, has called on tax agents to comply with the five ‘Professional Standards for Tax Agents’, published in a new guide on the subject, in all of their transactions to ensure uninterrupted activity.

The new guide was issued through the FTA’s official website, offering a detailed explanation of the standards and conditions required for practising the profession of tax agent in the UAE.

In the new guide, the FTA offered a detailed explanation of the five professional standards that should be met by tax agents, noting that a system has been put in place to track and ensure compliance with these standards.

The system relies on three methods, first of which is reviewing the timeliness and accuracy of the taxable persons’ returns if they have appointed a tax agent. The second approach is monitoring requests for clarifications and other correspondence with the FTA sent by tax agents, to ensure that their professional and technical knowledge meets the level expected of them under the outlined professional standards. The FTA has accredited 357 tax agents who meet the technical standards, conditions and qualifications required, and who have passed the exams set by the Authority.

Pre-VAT rush to buy gold, second phase to be implemented from July 1

Date: 28 May, 2019

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External URL: http://www.gdnonline.com/Details/541519/Pre-VAT-rush-to-buy-gold,-second-phase-to-be-implemented-from-July-1

GOLD appears to have regained its shine as jewellers in Bahrain are reporting a surge in demand weeks before the rollout of the second phase of a key levy. The second phase of Value Added Tax (VAT) will be implemented from July 1 .

FTA applies penalties for digital tax evasion on cigarettes

Date: 25 May, 2019

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External URL: https://www.thenational.ae/business/economy/fta-applies-penalties-for-digital-tax-evasion-on-cigarettes-1.866135

Penalties for not implementing the new digital tax stamp scheme on tobacco products include fines of Dh20,000 to more than Dh50,000, the Federal Tax Authority said on Saturday.

A ban on the import of any type of cigarettes into the UAE not bearing the digital tax stamps came into effect on May 1. The sale, importation or production of tobacco products not bearing the digital tax marks will be prohibited in the UAE as of August.

The penalties have been set “in an effort to protect consumers, prevent contraband, low-quality products from entering local markets, and halt sales of smuggled goods in the UAE,” the FTA said in a statement.

Bahrain hosts VAT workshop for construction professionals

Date: 25 May, 2019

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External URL: https://www.constructionweekonline.com/business/182955-bahrain-hosts-vat-workshop-for-construction-professionals

National Bureau for Revenue’s workshop aimed at smooth registration of companies earning $1.3-13m

Bahrain’s National Bureau for Revenue, a part of the kingdom’s government, recently held a value-added tax (VAT) workshop for construction professionals to boost clarity in the sector and support their registration for VAT, which Bahrain started levying in January 2019.

The session saw the bureau providing 45 representatives from 29 vendors a rundown on general and sector-specific concepts surrounding VAT, such as invoicing and filing.

The workshop was followed by a Q&A session, and a visit to an interactive demo center that offers a more hands-on understanding of VAT.

State news agency, BNA, reported that the session was part of National Bureau of Revenue’s goal to work as a platform for all public- and private-sector stakeholders to ensure streamlined company registration by June of firms with an annual income of $1.3-13m (BHD500,000-5,000,000).

VAT was made mandatory for companies in the UAE and Saudi Arabia last year, with Bahrain following suit in 2019.

Dubai airport clerk stole Dh70,000 in VAT refunds

Date: 24 May, 2019

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External URL: https://gulfnews.com/uae/crime/dubai-airport-clerk-stole-dh70000-in-vat-refunds-1.64162581

 A tax refund company employee went on trial accused of stealing Dh70,000 this week.

The 34-year-old Filipino forged electronic documents on his company’s system, which refunds value added tax (VAT) to travellers at Dubai International Airport. He then deposited the money onto credit cards for his own benefit.

The accused’s duty was to receive travellers refund documents and use the username and password in the company system to refund money to travellers.

However, the director of the tax refund company noticed two credit card numbers repeatedly appeared in tax refund transactions for different travellers.

“Some travellers who applied for cash refunds were in a hurry to catch their flights,” said the company director. “The defendant changed their refund transactions from cash to credit card payments and put the refund amount for his benefit onto two credit cards.”

Saudi imposes tax on e-cigarettes and sugary drinks

Date: 20 May, 2019

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External URL: https://gulfbusiness.com/saudi-imposes-tax-on-e-cigarettes-and-sugary-drinks/

Saudi Arabia has imposed a special tax on electronic cigarettes and sugary drinks, extending similar taxes introduced in 2017 as it seeks to reduce a budget deficit caused by low oil prices.

The General Authority of Zakat and Tax said a 100 per cent tax would be levied on electronic cigarettes and products used in them, and a 50 per cent tax on sugared drinks.

Saudi Arabia, the Arab world’s largest economy, already had a 100 per cent tax on cigarettes and tobacco products, a 100 per cent tax on energy drinks and a 50 per cent one on fizzy drinks.

The authority took the decision on May 15 and it became effective from Saturday after publication in the official gazette.

The taxes fall under the category of selective taxes on products deemed harmful to public health.

Saudi Arabia, the world’s top oil exporter, introduced a 5 per cent value-added tax (VAT) in January 2018 to improve non-oil revenue generation after a plunge in oil prices from mid-2014 bruised its revenues.

The IMF last week said the VAT introduction had been successful, but that the Saudi government should consider raising the rate, which is low by global standards.

UAE says processing over 8,000 VAT refunds per day

Date: 16 May, 2019

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External URL: https://www.arabianbusiness.com/banking-finance/420095-uae-processing-over-8000-vat-refunds-per-day-tax-authority

The United Arab Emirates Federal Tax Authority (FTA) processes around 8,110 refunds per day on value added-tax (VAT) paid on goods and services bought in the country, it was announced on Wednesday.

The UAE, along with Saudi Arabia, introduced VAT on January 1, 2018, as part of the region’s bid to diversify its revenue streams away from hydrocarbons. Last year, the FTA announced that the Tax Refunds for Tourists schemes, which allows tourists to claim a refund on VAT paid on goods bought during their visit, will be rolled out to all UAE airports and ports and to around more than 4,500 retailers across the country.

In a press statement issued by WAM, the state news agency, Khalid Ali Al Bustani, director-general of the FTA, said that as part of the authority’s efforts to manage and collect federal taxes, various tax refund mechanisms have been launched for legally eligible groups to recover VAT, including the Tax Refunds for Tourists schemes, of which nearly 8,110 transactions were processed on a daily basis.

IMF suggests hiking VAT; commends Saudi reforms

Date: 16 May, 2019

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External URL: https://www.khaleejtimes.com/imf-suggests-hiking-vat-commends-saudi-reforms

The International Monetary Fund has recommended that the 5 per cent value-added tax (VAT) levied in Saudi Arabia and the UAE as part of a GCC-wide framework should be raised, saying it is low by global standards.

The IMF suggested in a country note on the kingdom released late on Wednesday that the decision should be taken following consultations with GCC countries.

“The introduction of VAT has been very successful, and consideration should be given to raising the rate from 5 per cent, which is low by global standards, in consultation with other GCC countries,” it said in the note.

The UAE and Saudi Arabia levied 5 per cent VAT on a host of goods and services from January 1, 2018, in order to bolster the revenues of the Gulf governments as part of diversification initiatives. Other Gulf countries will levy VAT at a later stage. Currently, it is one of the lowest in the world.

UAE marks 500 successful days of VAT

Date: 15 May, 2019

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External URL: http://wam.ae/en/details/1395302762871

As the Federal Tax Authority, FTA, marks 500 days of the Value Added Tax, VAT, in the UAE, Khalid Ali Al Bustani, Director-General of the FTA, revealed that the rates of compliance with tax laws and procedures have increased exponentially among all taxable businesses.

The tax came into effect on 1st January, 2018, at a rate of five percent on the supply of most goods and services.

In a press statement issued by the authority, Al Bustani added, “Compliance was made possible through the seamless, flexible, and clear procedures the FTA has rolled out through electronic, fully paperless systems that are among the most advanced of their kind in the world, underpinned by a sophisticated legislative environment that meets the highest standards in the field.”

“The FTA implemented an easy-to-use system for submitting tax returns and paying taxes via the e-Services portal, available 24/7 on the FTA’s official website,” he added.

Al Bustani said that as part of the authority’s efforts to manage and collect federal taxes, various tax refund mechanisms have been launched for legally eligible groups to recover VAT, including the Tax Refunds for Tourists schemes, of which nearly 8,110 transactions were processed on a daily basis.

IMF urges Saudi Arabia to mull VAT rate increase

Date: 15 May, 2019

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External URL: https://www.arabianbusiness.com/politics-economics/420060-imf-urges-saudi-arabia-to-mull-vat-rate-increase

Economic reforms in Saudi Arabia have started to yield positive results, with non-oil growth picking up and female labour force participation and employment increasing, according to the International Monetary Fund (IMF).

The IMF hailed the successful introduction of value-added tax, saying it has underpinned an increase in non-oil fiscal revenues.

It added that consideration should be given to raising the rate from 5 percent, which is low by global standards, in consultation with other GCC countries.

Consulting VAT Expert before VAT Submissions to Avoid Penalties

Date: 11 May, 2019

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External URL: https://t2conline.com/consulting-vat-expert-before-vat-submissions-to-avoid-penalties/

Ignorance is bliss but not in the case of VAT. The VAT is a very crucial matter in UAE and it should thus be dealt with carefully. Being careless about it may make a lot of hurdles for the companies based in UAE.

Businesses who fail to comply with the rules and regulations of VAT may have to face serious penalties. These penalties may harm the business as well as the reputation of the businessman in the market. that is why it is important for the companies to get help from the VAT consultants in UAE.

The VAT experts are preferred because they have a better understanding of the proceedings of the VAT. They know the right procedure to follow for UAE VAT registration. That is why they are a very good option to consider by the companies for their compliance with the VAT laws in UAE

No matter where you live if tax laws have been implemented on you, you must comply with them, or else you will have to pay heavy penalties.

NBR holds a workshop for professionals working in audit firms

Date: 08 May, 2019

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External URL: https://www.nbr.gov.bh/releases/48

The National Bureau for Revenue (NBR) held a workshop primarily aimed at increasing professional auditors’ VAT awareness to better equip them with the knowledge they need to provide accurate VAT advisory and audit services.

A total of 57 professionals attended the workshop that provided a detailed presentation of the Kingdom’s VAT regulatory and procedural aspects, including registration requirements, filing requirements, and mechanisms for dealing with VAT-payers to better meet their needs.

Today’s workshop ensures the smooth implementation of VAT, particularly in regards to companies with an annual supply of BHD 500,000 to BHD 5,000,000 that are expected to complete their registration by June.

UAE residents confident about state of their finances, impact of VAT falling

Date: 07 May, 2019

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External URL: https://www.arabianbusiness.com/politics-economics/419468-uae-residents-confident-about-state-of-their-finances-impact-of-vat-falling-survey

Residents in the United Arab Emirates continue to be upbeat about the state of their finances, while fewer and fewer report they are seeing any impact from the introduction of value-added tax (VAT) on goods and services since last year, according to a new survey released on Tuesday.

The Consumer Confidence Tracker Q1 2019 from financial website yallacompare surveyed around 1,000 UAE residents on the state of their finances and attitudes towards work.

The results found that 21 percent of respondents feel more confident about their finances than they did 12 months ago, compared to 22 percent in Q4 last year and 14 percent in Q3 2018.

NBR holds an interactive workshop for representatives working in the retail and wholesale sectors

Date: 06 May, 2019

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External URL: https://www.nbr.gov.bh/releases/47

The National Bureau for Revenue (NBR) held an interactive VAT workshop for professionals working in the retail and wholesale sectors, during which the NBR recapped general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 59 representatives from 38 vendors were given the opportunity to visit the unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.

Today’s workshop is a continuation of the series of workshops organized by the NBR to provide an inclusive platform for all stakeholders from the public and private sectors to ensure the smooth registration of companies with an annual supply of BHD 500,000 to BHD 5,000,000 by June.

VAT Financial Guarantee or Cash Deposit Release for Non Registered Importers User Guide VAT 702

Date: 01 May, 2019

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1. About this guide

This guide is prepared to help non-registered importers to submit a request to liquidate partially or completely an eGuarantee or refund partially or completely an eDirham deposit provided while importing goods under tax suspension.

2. About VAT 702

VAT 702 is a form provided by the Federal Tax Authority (“FTA”) pursuant to which a nonregistered importer notifies the FTA to either cancel or liquidate an eGuarantee or to refund or collect an eDirham deposit. In line with the relevant legal provisions, there would be specific scenarios where a non-registered importer would provide an eGuarantee or an eDirham deposit to clear goods at customs, which are subject to tax and duty suspension. Upon export of the goods, the importer is eligible for a refund or a return of the financial guarantee.

Read more..

NBR holds interactive workshop for retail and wholesale sectors representatives

Date: 22 Apr, 2019

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External URL: https://www.nbr.gov.bh/releases/46

The National Bureau for Revenue (NBR) held an interactive VAT workshop for professionals working in the retail and wholesale sectors, during which the NBR recapped general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 48 representatives from 36 vendors were given the opportunity to visit the unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.

Today’s workshop is a continuation of the series of workshops organized by the NBR to provide an inclusive platform for all stakeholders from the public and private sectors to ensure the smooth registration of companies with an annual supply of BHD 500,000 to BHD 5,000,000 by June.

 

Attendees can now register for VAT workshops

Date: 21 Apr, 2019

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External URL: https://www.nbr.gov.bh/releases/45

The National Bureau for Revenue (NBR) today introduced a new electronic service to allow VAT payers to register their interest to attend upcoming VAT workshops by submitting a simple form at https://www.nbr.gov.bh/workshop_registration.

The workshops will introduce attendees to key VAT concepts, including invoicing and filing, as well as providing them with the opportunity to visit the interactive demo-center. The registration feature builds on Bahrain’s intensive efforts to increase all VAT payers’ solid understanding of key VAT concepts in addition to ensuring the smooth registration of companies with annual supplies between BHD 500,000 and BHD 5,000,000 by June.

Can I avoid a Dh22,000 penalty imposed by the FTA?

Date: 16 Apr, 2019

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External URL: https://www.thenational.ae/business/money/vat-q-a-can-i-avoid-a-dh22-000-penalty-imposed-by-the-fta-1.849235

If you fail to file the return the FTA does not recognise any payments that you have made. Therefore you get fined not only a later filing fee but also interest on the amount of the tax due, until the point at which you file the return.

The penalty for missing the filing deadline is Dh1,000 for the first offence and then Dh2,000 for every subsequent missed deadline.

VAT Treatment of Education Services

Date: 15 Apr, 2019

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The supply of educational services and  related goods and services by kindergartens, pre-primary, primary, secondary and higher education institutions is subject to the zero-rate.

In order for the zero-rate to apply:

The school or educational institution must be licensed by the Ministry of Education in Bahrain or be under its supervision, and Supplies must be provided directly to a student who is enrolled in that school or institution.

Certain educational services are not subject to the zero-rate (and will be subject to the 5% rate), including:

Professional education; and Vocational training, unless such  vocational training is provided by a polytechnic educational institution  which is licensed by the Ministry of Education in Bahrain.

 

Read more..

 

VAT Healthcare Guide

Date: 15 Apr, 2019

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An overview of the VAT rules and procedures in relation to the healthcare sector in Bahrain and, if required, how to comply with them the necessary background and guidance to help you to determine how a supply is treated
for VAT purposes.

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Financial Services VAT Guide

Date: 15 Apr, 2019

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This document sets out some of the general principles of Value Added Tax (VAT) in the Kingdom of Bahrain (Bahrain) specifically relevant to the financial services and the insurance sectors. The main aim of this document is to provide the reader with:

An overview of the VAT rules and procedures applicable to the financial services and the insurance sectors in Bahrain and, if required, how to comply with them the necessary background and guidance to help you to determine how a supply is treated for VAT purposes.

Read more..

NBR holds an interactive workshop for representatives working in the manufacturing sector

Date: 10 Apr, 2019

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External URL: https://www.nbr.gov.bh/releases/44

The National Bureau for Revenue (NBR) held an interactive VAT workshop for professionals working in the manufacturing sector, during which the NBR recapped general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 46 representatives from 24 vendors were given the opportunity to visit the unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.

Today’s workshop is a continuation of the series of workshops organized by the NBR to provide an inclusive platform for all stakeholders from the public and private sectors to ensure the smooth registration of companies with an annual supply of BHD 500,000 to BHD 5,000,000 by June.

VAT implementation in focus

Date: 04 Apr, 2019

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External URL: http://www.gdnonline.com/Details/522760/VAT-implementation-in-focus

The Bahrain Chamber of Commerce and Industry (BCCI) represented by its finance, insurance and tax committee, and its technology committee held a workshop themed “Using technology in VAT implementation” at Beit Al Tijjar. The workshop, delivered by experts from KPMG Bahrain, discussed the legal and administrative framework of the tax, the sector-specific guidelines for VAT as per the National Bureau for Revenues, and the challenges of implementing the tax .

VAT Digital Economy Guide

Date: 04 Apr, 2019

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External URL: https://www.newsofbahrain.com/bahrain/52526.html

The National Bureau for Revenue (NBR) has published a guide that mainly focuses on educating the public on the VAT treatment of e-commerce and the VAT treatment of electronic services. ‘The VAT Digital Economy Guide’ aims to educate the public about the application of VAT on e-commerce and electronic services. The document sets out the general principles of Value Added Tax (VAT) in relation to the digital economy sector in the Kingdom.

The main aim of the document is to provide the reader with an overview of the VAT rules and procedures in the Kingdom in relation to the digital economy sector and how to comply with them if required. It also explains the necessary background and guidance to help determine how supply is treated for VAT purposes.

“This guide is intended to provide general information only and contains the current views of the National Bureau for Revenue (NBR) on its subject matter. “No responsibility is assumed for the VAT laws, rules or regulations in the Kingdom. “This guide is not a legally binding document and does not commit the National Bureau for Revenue or any taxpayer in respect of any transaction.

Read more..

FTA begins process for refunding VAT to business visitors

Date: 02 Apr, 2019

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External URL: http://wam.ae/en/details/1395302752645

The Federal Tax Authority, FTA, has begun implementing the Value Added Tax, VAT, refunds for business visitors while noting that a dedicated application form for the procedure is available on its website.

In a press statement issued today, the FTA explained all the procedures with regard to the refund of VAT to business visitors. The FTA also published a guide through its website which can be accessed through the link: Guide – VAT Refunds for Business Visitors.

Khalid Ali Al Bustani, FTA Director-General, said, “Reciprocity is a key condition for the procedure, whereby the authority will collaborate with countries that refund VAT for UAE businesses visiting their territories.

“The procedure abides by Federal Decree-Law No. (8) of 2017 on VAT and its Executive Regulations, which call for refunding taxes on supplies or imports made by a person not residing in the UAE or any of the Implementing States, provided they meet the necessary conditions.”

The FTA clarified that the period of each refund claim shall be a calendar year, noting that for claims in respect of the 2018 calendar year, it started accepting refund applications as of 1st April, 2019. However, in subsequent calendar years, the opening date for refund applications submission will be 1st March of the following year. That means for the period 1st January to 31st December, 2019, applications will be accepted as of 1st March, 2020.

Early registration key to a smooth Bahrain VAT transition

Date: 02 Apr, 2019

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External URL: https://ameinfo.com/money/banking-finance/early-registration-key-to-a-smooth-bahrain-vat-transition/

Bahrain introduced a 5% value-added tax (VAT) in the Kingdom from January 1st, 2019.

The tax registration in the country is split across phases and requires businesses to enrol across each phase based on their threshold. As such, the larger businesses with annual supplies exceeding BHD 5,000,000 ($13.25 million) are mandated to register in the first phase, whereas businesses with the annual supplies value exceeding BHD 500,000 ($1.32 million) are mandated to register in the second phase.

Similarly, businesses whose annual supplies exceeds BHD 37,500 ($99,375) are mandated to register in the third phase. In addition, voluntary VAT registration is available for businesses even if the annual supplies are less than the mandated registration threshold limit. While it is voluntary, and entrepreneurs can register if their annual supplies exceed BHD 18,750 ($49,687) benefits of registering under VAT are immense and it is recommended that businesses that have not yet enrolled, start immediately to assess the impact of tax on their operations.

Upon registering under VAT, businesses are given a VAT number which can be displayed on invoices, letterheads, websites and other forms of business stationery. While early registrations help businesses add VAT to the sale price of goods and services when they sell to commercial and non-commercial consumers, it can also help in claiming the Input VAT – a mechanism by which a VAT registered business can deduct input tax from the output tax for a period and remit the balance tax payable to the National Bureau for Revenue.

VAT is a simple process, and The National Bureau for Revenue (NBR) has introduced several knowledge and process guides to make registration seamless and accurate. As such, with the help of NBR, early registered businesses can prepare well in advance and ensure that the process is completed easily, eliminating the risk for unnecessary delays, and incorrect information, which may lead to hefty fines or rejection.

UAE considers adding more 'harmful' products to excise tax list

Date: 01 Apr, 2019

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External URL: https://www.arabianbusiness.com/politics-economics/416809-uae-considers-adding-more-harmful-products-to-excise-tax-list

The UAE is mulling the inclusion of new products on its excise tax list, according to a statement by the Ministry of Finance, which implemented the fee on three categories in October 2017.

The ministry is conducting a joint study with officials in Saudi Arabia “on the addition of new goods to the selective tax list, as well as to determine tax rates on certain harmful substances,” its statement said.

While it did not share details of the goods it is considering to add to the tax list, it said in 2017 that it aims to reduce the consumption of harmful substances.

These include tobacco and tobacco products and carbonated and energy drinks, which are currently listed under the excise tax and have doubled in price since the fee’s introduction.

Basic food products NOT subject to VAT

Date: 01 Apr, 2019

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External URL: https://s3-eu-west-1.amazonaws.com/nbrproduserdata/media/59sMaZjgMJHhj7hPqKDFwJdaqEMlhyAODPrYOSe3.pdf

Items Not Subject to VAT

 

 

NBR holds an interactive workshop for representatives working

Date: 01 Apr, 2019

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External URL: https://www.nbr.gov.bh/releases/43

The National Bureau for Revenue (NBR) held an interactive VAT workshop for professionals working in the construction sector, during which the NBR recapped general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 88 representatives from over 50 vendors were given the opportunity to visit the unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.

Today’s workshop is a continuation of the series of workshops organized by the NBR to provide an inclusive platform for all stakeholders from the public and private sectors to ensure the smooth registration of companies with an annual supply of BHD 500,000 to BHD 5,000,000 by June.

NBR holds an interactive workshop for representatives working in the construction sector

Date: 01 Apr, 2019

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External URL: https://www.nbr.gov.bh/releases/43

The National Bureau for Revenue (NBR) held an interactive VAT workshop for professionals working in the construction sector, during which the NBR recapped general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, 88 representatives from over 50 vendors were given the opportunity to visit the unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.

Today’s workshop is a continuation of the series of workshops organized by the NBR to provide an inclusive platform for all stakeholders from the public and private sectors to ensure the smooth registration of companies with an annual supply of BHD 500,000 to BHD 5,000,000 by June.

Introducing Digital Tax Stamps Scheme in the UAE

Date: 01 Apr, 2019

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External URL: https://www.tax.gov.ae/pdf/DTS%20Newsletter_2_Plus_3_en.pdf

IMPORTANT DATES 

1st Jan 2019

Importers will be able to order stamps to be sent to the Manufacturers for application to the pack of cigarette products

1st May 2019

No cigarette products without a digital tax stamp will be permitted to be imported into the UAE. Customs departments will undertake checks on
products from this date and penalties for non-compliance may apply.

1st August 2019

No cigarettes will be allowed to be stored, held out for sale, imported or produced anywhere in the UAE unless they carry a Digital Tax Stamp with
end-to-end traceability. Penalties for non-compliance with this rule may apply. It would therefore be advisable for businesses to consider this final deadline date into their supply chain planning to ensure all unmarked products have been sold prior to this time.

Read more..

 

Arab Regional Tax Forum opens in Dubai

Date: 31 Mar, 2019

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External URL: http://wam.ae/en/details/1395302752099

Arab Regional Tax Forum has discussed ways of balancing tax policies, Arab countries’ competitiveness in managing them, as well as the challenges facing these nations in pursuing their tax policies.

The two-day forum which opened today at the Grand Hyatt Hotel in Dubai, is organised by the Ministry of Finance, MoF, and the Arab Monetary Fund, AMF, in cooperation with the Federal Tax Authority, FTA, and the International Tax and Investment Centre, ITIC.

Dr. Abdulrahman Al Hamidy, Director-General of AMF; and Khalid Al Bustani, Director-General of the FTA attended the ceremony. Senior officials from the Ministry of Finance, top tax policy and administration officials from all AMF member states, senior tax and finance executives from multinational enterprises, tax experts from international organisations, and renowned public finance academics also attended the event.

Dr. Abdulrahman Al Hamidy opened the forum with a welcome speech, following which Sir Mark Moody-Stuart, Honorary Co-Chairman of ITIC and the Director General of the FTA gave the keynote addresses.

The FTA Director-General stressed the importance of holding meetings with senior officials and experts, especially in light of the great economic transformation the region is undergoing. He expressed hope that the Arab Regional Tax Forum will benefit all Arab countries through the discussions and knowledge-sharing on key issues.

UAE's FTA sees more businesses registering for taxes in 2019

Date: 31 Mar, 2019

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External URL: https://www.thenational.ae/business/economy/uae-s-fta-sees-more-businesses-registering-for-taxes-in-2019-1.843517

The number of UAE businesses registering for taxation in 2019 is set to grow from levels previously seen in 2018 as more companies become tax compliant, the head of the Federal Tax Authority said.

The limited number of businesses and people that registered for taxation last year was due to a lack in compliance, Khalid Al Bustani said at the sidelines of the Arab Regional Tax Forum in Dubai on Sunday. However, he said the authority had conducted numerous awareness campaigns to limit the number of those penalised for non-compliance.

The rise in the number of new businesses launched in the UAE will also result in an increase in the number of registrations this year, he added.

“Regarding registration, this is a dynamic process because we have companies that are still reaching the compulsory threshold, when they reach that they need to register,” Mr Al Bustani said.

The Emirates introduced a 5 per cent VAT in January last year, and in 2017, it rolled out an excise tax on fizzy and energy drinks and tobacco, to diversify income and create new revenue streams as part of a plan to lower dependence on oil revenues. The International Monetary Fund estimates the introduction of VAT in the Arabian Gulf region could generate between 1.5 to 3 per cent of non-oil GDP in new revenue.

Bahrain publishes VAT guide on financial services

Date: 31 Mar, 2019

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External URL: https://www.zawya.com/mena/en/economy/story/Bahrain_publishes_VAT_guide_on_financial_services-SNG_141422748/

Bahrain’s National Bureau for Revenue stated that a 5% standard tax is applicable where the payment for the services is made by way of fees, commissions or commercial discount.

The Bahrain National Bureau for Revenue (NBR) has released the first edition of its Financial Services VAT guide (FSI VAT Guide) and Islamic finance products generally have the same VAT treatment as their conventional financial product counterpart.

NBR stated that a five per cent standard tax is applicable where the payment for the services is made by way of fees, commissions or commercial discount.

Additionally, tax exemption will be applied where the payment for the services is made by way of an implicit margin or spread, including interest.

MCA is now a FTA approved Tax Agent

Date: 27 Mar, 2019

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MCA Management Consultants has qualified to represent clients to FTA in matters relating to VAT after earning the approval as a FTA accredited Tax Agent.

MCA has met the stringent conditions specified by the Federal Tax Authorities to attain this approval. The conditions safeguard the interest of registered VAT entities and ensure that VAT computation, filing and audit is as per the guidelines contained in the various statutes of the VAT law in UAE.

Businesses in UAE urged to conduct pre-audit checks of VAT returns for expected tax audits this year

Date: 27 Mar, 2019

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External URL: https://menafn.com/1098309617/Businesses-in-UAE-urged-to-conduct-preaudit-checks-of-VAT-returns-for-expected-tax-audits-this-year

Al Dhaheri Jones and Clark (ADJC) reminded companies anew of properly filing their value added tax (VAT) returns in anticipation of a possible tax audits by the Federal Tax Authority (FTA) this year. The Dubai-based consultancy firm, which is a registered tax agent in the UAE as approved by the FTA, warned that hefty penalties await tax violators in pursuant of Cabinet Resolution No. (40) of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE. Since the implementation of VAT in the UAE at the start of 2018, the number of tax returns received from businesses registered for VAT purposes has exceeded 650,000 as per the report of the FTA.

NBR holds interactive workshop for retail/wholesale sectors

Date: 27 Mar, 2019

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External URL: https://www.nbr.gov.bh/releases/42

The National Bureau for Revenue (NBR) held another interactive VAT workshop for professionals in the retail and wholesale sectors, during which the NBR recapped general and sector-specific VAT concepts, including invoicing and filing.

Following a Q-and-A session, 90 representatives from 48 vendors were given the opportunity to visit the unique interactive demo-center that provides innovative learning experiences to ensure effective implementation of VAT.

Today’s workshop is a continuation of the series of workshops organised by the NBR to provide an inclusive platform for all stakeholders from the public and private sectors to ensure the smooth registration of companies with an annual supply of BD 500,000 to BD 5,000,000 by June.

Over 300,000 businesses now registered for VAT in the UAE

Date: 26 Mar, 2019

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External URL: https://www.arabianbusiness.com/banking-finance/416295-over-300000-businesses-now-registered-for-vat-in-the-uae

More than 300,000 businesses have now registered for WAT in the UAE, according to the Federal Tax Authority (FTA).

At a meeting chaired Sheikh Hamdan bin Rashid Al Maktoum, also Deputy Ruler of Dubai, it was also revealed that the number of approved tax agents operating in the UAE has increased to 316.

It also confirmed the success of the VAT refund procedures for Emiratis building new homes, with 235 applications approved, enabling citizens to recover a total of AED9.76 million.

Sheikh Hamdan commended the positive results, saying: “The Federal Tax Authority has developed comprehensive plans to encourage tax compliance, raise the registration rate among taxable businesses, and combat tax evasion.”

The FTA also announced that the Tax Refunds for Tourists Scheme, which was introduced in November, was recording nearly 6,000 refund transactions per day.

Business visitors to UAE to get VAT refund

Date: 26 Mar, 2019

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External URL: https://www.zawya.com/mena/en/economy/story/Business_visitors_to_UAE_to_get_VAT_refund-SNG_141039144/

The Federal Tax Authority has completed preparations to launch the “VAT refunds for business visitors scheme” from April 2.

The scheme aims to reciprocate the efforts made in countries that offer VAT refunds to visiting UAE businesses,” the FTA said in a statement.

To be eligible for the VAT refund, the first condition is that foreign businesses must not have a place of establishment or fixed establishment in the UAE or in any of the VAT-implementing GCC states.

 

FTA board reviews developments of ongoing projects

Date: 26 Mar, 2019

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External URL: http://wam.ae/en/details/1395302750976

The Board of Directors of the Federal Tax Authority, FTA, has issued a number of executive decisions concerning the Authority’s operations and administrative policies during its 8th meeting, chaired by H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and FTA Chairman.

During the meeting, held on Tuesday at the Ministry of Finance’s Dubai headquarters, the Board reviewed a report on the developments of ongoing projects and the FTA’s recent achievements. The report also covered results pertaining to its registration processes for VAT and excise tax and transactions related to filing tax returns, payment of outstanding taxes and collection of recoverable taxes.

The report pointed out that the level of tax compliance in the country has increased, with the number of registrants for VAT exceeding 300,000 registered businesses – tax groups and individuals. Meanwhile, the number of registrants for excise tax reached 719, and the number of approved tax agents increased to 316.

The report confirmed the success of the VAT Refund Procedures for UAE Nationals Building New Residences, with many citizens benefiting from the simple and straightforward electronic procedure that enables them to claim refunds on the taxes incurred on the construction of their new villas and apartments. The study noted that 235 applications were approved, enabling citizens to recover a total of AED9.76 million.

Sheikh Hamdan bin Rashid commended the positive results and major strides the Authority has made since its inception. The FTA saw to the implementation of simple and clear cutting-edge electronic systems, leading to encouraging compliance levels from business sectors. This success was the result of streamlined procedures, an advanced legislative environment, and adherence to high international standards and best practices.

VAT refunds for pavilions at Expo 2020 Dubai

Date: 24 Mar, 2019

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External URL: https://www.khaleejtimes.com/business/local/vat-refunds-for-pavilions-at-expo-2020-dubai

Maximum 20% of pavilion space allowed for commercial activity to claim tax return.
Countries and inter-government agencies will be able to claim value-added tax (VAT) refunds for the costs incurred for the developments of pavilions at Expo 2020 Dubai.
 According to a Cabinet decision posted on the Federal Tax Authority’s (FTA) website, the commercial space should be less than 20 per cent of the space to be entitled for the refund. The Expo 2020 Bureau will largely administer this process.

VAT Refund for Expo 2020

Date: 21 Mar, 2019

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In accordance with the Cabinet Decision No. 1 of 2019 on the ‘Refund of Value Added
Tax Paid on Goods and Services Connected with Expo 2020 Dubai’, Official Participants
of the Expo 2020 are able to claim a refund of VAT incurred by them on the import or
supply of certain Goods and Services.
This document provides guidance for Official Participants of Expo 2020 in respect to the following:

  • The conditions which have to be met to be entitled to claim the VAT refund;
  • The process to be followed to claim VAT; and
  • Information required to complete the relevant forms.

Additional details on the registration requirements along with the importing and customs
details are covered in this user guide.

Click here  to know more

Cabinet Decision is primarily for Expo 2020 Official Participants

Date: 20 Mar, 2019

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This Cabinet Decision is primarily for Expo 2020 Official Participants which includes Countries and Inter Govt agencies. They can claim VAT refund in case they are not VAT registered. Condition is that commercial exhibition space is less than 20% and VAT refund value is more than Aed 200 per transaction. Expo 2020 Bureau will largely administer this process.

Click here   to know more

Is Bahrain facing VAT implementation hurdles

Date: 20 Mar, 2019

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External URL: https://ameinfo.com/money/banking-finance/is-bahrain-facing-vat-implementation-hurdles/

Saudi Arabia and the UAE led the way in January 2018 with the introduction of a 5 percent value-added tax (VAT) as part of the unified GCC VAT Agreement – and Bahrain followed suit in January 2019. This measure in Bahrain, however, could be facing some hiccups.

Value-added tax (VAT) is a type of consumption tax that is placed on the supply of goods and services. It takes into account the “value added” at every step of the supply chain. The GCC framework on VAT, which has been spurred by efforts toward tax transparency and the GCC’s diversification goals, gives sufficient leeway for member states to be flexible on VAT implementation in industries based on local contexts and specifications. Bahrain, for instance, has decided to exclude oil products from VAT, as part of its essential goods exclusion.

Could blockchain transform the GCC's VAT system?

Date: 20 Mar, 2019

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External URL: https://gulfbusiness.com/blockchain-transform-gccs-vat-system/

With the introduction of VAT in the Middle East (UAE, Saudi in 2018 and Bahrain in 2019), the governments had a clean sheet to work with.

From e-registration to manual e-filing, they’ve introduced a lot of technology in a very short amount of time. Companies also had to adapt very quickly and both parties are just beginning their journey of tax and revenue automation.

While the GCC VAT system has just been born, other parts of the world have already traveled a long way in this automation path and there is no doubt these developments will come sooner rather than later in the region.

Read more…

Tourists to Bahrain will be offered VAT refunds through a VAT refund desk at the Bahrain International Airport.

Date: 19 Mar, 2019

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External URL: https://www.newsofbahrain.com/bahrain/52179.html

Tourists to Bahrain will be offered VAT refunds through a VAT refund desk at the Bahrain International Airport. This comes as the Kingdom’s National Bureau for Revenue (NBR) announced the launch of a VAT refund desk at the Bahrain International Airport yesterday. The set up is in collaboration between the Bahrain Airport Company and international payment specialist Planet Payment. The NBR stated that the new desk will offer VAT refund solutions for tourists and non-residents visiting the Kingdom as well as citizens residing abroad. “The VAT refund desk uses an integrated system that allows VAT refund claims on local purchases from over 300 retail outlets across the Kingdom,” the NBR stated.

“The VAT refund desk represents one of many measures the Kingdom is implementing to expand regional and international tourist base, while increasing market competitiveness and expanding growth across Bahrain’s established tourism sector,” it added. Chief Commercial Officer of the Bahrain Airport Company, Ayman Zainal said, “The BAC is pleased to support the Ministry of Finance and National Economy and the National Bureau for Revenue in Bahrain with this important function. Two dedicated stands will be set up at the airport, where tourists can avail hassle-free VAT refunds on their shopping.” The Country Manager of Planet Payment, Eyad Al Kourdi, commented, saying, “Planet is proud to be working closely with the National Bureau for Revenue and the Bahrain Airport Company to deliver a fast, efficient and state-ofthe-art digital VAT refund scheme as the Kingdom’s tourism and retail sectors continue to grow and attract shoppers from across the world.” The NBR explained the VAT refund process stating, “Claimers are required to present their passports, entry visa permits, GCC National IDs, or residency permits for Bahraini nationals living abroad, when shopping VAT free”.

Read more..

KPMG Organizes a Seminar on Tax Compliance and Reporting for Businesses in Bahrain

Date: 17 Mar, 2019

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External URL: https://www.albawaba.com/business/pr/kpmg-organizes-seminar-tax-compliance-and-reporting-businesses-bahrain-1266694

Approximately 200 key members from the business community in the Kingdom of Bahrain attended an exclusive seminar organized by KPMG in Bahrain for VAT registered and to-be registered businesses to discuss tax compliance and reporting obligations.  This in preparation for the first VAT return cycle coming up in April this year. VAT has now been live in the Kingdom of Bahrain for nearly three months and by latest 30 April 2019, VAT registered businesses will be required to submit their first VAT return to the National Bureau for Revenue (NBR).

 Philippe Norré, Partner and Head of Taxes and Corporate Services at KPMG in Bahrain was the keynote speaker and shared insights from his long experience in rolling out and leading KPMG’s Global Indirect Tax Compliance approach.  He explained and discussed the detailed requirements outlined by the Bahraini VAT legislative framework.  “Not only are VAT registered businesses required to submit correctly completed VAT returns and do by deadline together with any payment due, but the compliance and reporting obligations for VAT do require keeping a set of quality documents to support the numbers reported and allowing for an end-to-end reconciliation including with the General Ledger (purchase orders, contracts, invoices, import and export documentation, debt and credit notes and others). As further official guidance notes are issued by NBR a proper knowledge management process is required to keep fully abreast of all developments around VAT in Bahrain. ” He commented during the event.

Real Estate guide for Bahrain

Date: 17 Mar, 2019

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External URL: http://www.allaboutvat.com/wp-content/uploads/Real-Estate-update-17032019.pdf

Summary of VAT on Real Estate sale/Lease

Exempt Standard rated
  •  Sale/lease of  property
  •  Sale/lease land
  •  Labour accommodation
  •  Car parking for > a month
  •  Serviced accommodation  more than a year
  •   Hotel accommodation  and related   services
  •   Paid car parking for period < 1 month
  •   Non Exclusive serviced office space
  •   Function hall
  •   Management services, utilities,     telecommunications etc
  •   Signage and permissions
  •   Services charged separately
  •   Furnished apartments   with  tourism  licence
  •   Storage services
  •   Short term retail and promotional stands
  • No VAT on furniture, unless charged separately from accommodation.
  • VAT to be charged on services provided in addition to serviced space
  • VAT to be charged on provision of space for retails and promotional stands for < 1 month
  • Normal place of rules applicable for insurance of real estate property

 

Click here to know more

NBR announces the opening of a new VAT refund desk for visitors at Bahrain International Airport

Date: 17 Mar, 2019

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External URL: https://www.nbr.gov.bh/releases/39

Bahrain’s National Bureau for Revenue (NBR) today announced the launch of a VAT refund desk at the Bahrain International Airport. Launched in collaboration between the Bahrain Airport Company and Planet, the new desk offers VAT refund solutions for tourists and non-residents visiting the Kingdom of Bahrain as well as citizens residing abroad.

The VAT refund desk uses an integrated system that allows VAT refund claims on local purchases from over 300 retail outlets across the Kingdom.

The VAT refund desk represents one of many measures the Kingdom is implementing to expand regional and international tourist base, while increasing market competitiveness and expanding growth across Bahrain’s established tourism sector.

Commenting on the announcement, the Chief Commercial Officer of the Bahrain Airport Company, Ayman Zainal said:

“BAC is pleased to support the Ministry of Finance and National Economy and the National Bureau for Revenue in Bahrain with this important function. Two dedicated stands will be set up at the airport where tourists can avail hassle-free VAT refunds on their shopping.”

The Country Manager of Planet, Eyad Al Kourdi, also welcomed the launch of the new desk saying:

“Planet is proud to be working closely with the National Bureau for Revenue and the Bahrain Airport Company to deliver a fast, efficient and state-of-the-art digital VAT refund scheme as the Kingdom of Bahrain’s tourism and retail sectors continue to grow and attract shoppers from across the world.”

The NBR also outlined the following steps for completing VAT refund submissions at the Bahrain International Airport:

Claimers are required to present their passports, entry visa permits, GCC National IDs, or residency permits for Bahraini nationals living abroad, when shopping VAT Free.

Claimers need to request VAT free tags, available at retail stores, upon completing their purchase. The tags can be attached to receipts, which will be validated along with purchased goods at the VAT refund desk during check out.

Refunds will be paid in cash or via a credit/ debit card account provided by the claimer.

We must ensure smooth VAT implementation

Date: 15 Mar, 2019

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External URL: http://www.gdnonline.com/Details/509638/We-must-ensure-smooth-VAT-implementation

Bahrain being part of GCC, is obliged to comply and apply the VAT treaty which came to face and absorb some difficulties. First, it is better to mention that the new VAT is of certain features including, among other things, a small rate of five per cent compared with 17 to 20pc in developed countries including Germany, France and the UK. Also, the exemption of many essential products and services “zero rated” from the VAT. I believe, such strategy is intended due to the absence of taxation culture in the region.

This year, the implementation of VAT in Bahrain, is in progress but not free from obstacles. Including, some companies are yet to complete IT systems, train staff, comprehend the process, registration issues, VAT return process and confusion over tax invoices. Moreover, other related issues have started as consequence to VAT, namely prices increase to face VAT. Such points need time to settle and firm actions are required. By all means, costs rationalisation is needed and there should be regulations to supervise and control the market to escape adverse consequences due to VAT.

How to claim VAT refund for Tourist?

Date: 14 Mar, 2019

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External URL: https://www.planetpayment.com/en/countries/uae/#

Tourist leaving the country can claim the VAT refund within 90 days from the date of purchase.

You will receive 85% of the tax paid, minus a fee of 5 AED per Tax Free tag validated. Tax Free tags are stuck to every invoice that you obtain.

There are two counters for claiming the refund. One in the checkin area and the other past immigration. The check-in area counter can process refunds of bills upto 8000 AED and can refund to your credit card directly. If you need cash, you can process the claim at this counter, but to obtain the refund in cash you must go past immigration and collect in US Dollars from Travelex counter.

To claim for bills of value over 8000 AED you are expected to carry and show the item at the counter after immigration in the terminal. They will follow the similar method of directly crediting your card or collect cash from Travelex.

You will not get the full VAT refunded as you are supposed to get only 85% refund, plus pay 5 AED for the tag placed on your bill and the exchange fee to convert to US dollars.

Planet is the official agent for processing refunds and has counters in the check in area, and inside the airport.

Read More

UAE expects to reach deal with EU soon on tax-haven blacklist

Date: 13 Mar, 2019

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External URL: https://www.khaleejtimes.com/business/banking-finance/uae-expects-to-reach-deal-with-eu-soon-on-tax-haven-blacklist

The UAE expects to reach an amicable solution with the European Union soon on the issue of including the emirate in the list of non-cooperative jurisdictions for tax purposes, said a senior UAE banking official.

“I am sure this issue will be solved in the near future. I think it was due to lack of communication and lack of understanding. The EU will be approached and discussed; I’m sure there will be a way out,” said Abdul Aziz Al Ghurair, chairman of the UAE Banking Federation and CEO of Mashreq Group.

“Because we have chosen to be international financial centre, so we have to comply with world regulations. We had issues like this in the past and were solved,” Al Ghurair told media on the sidelines of a banking conference in Dubai on Wednesday.

The UAE on Wednesday regretted the European Union’s decision to include it on a list of non-cooperative jurisdictions for tax purposes. This inclusion was made despite the UAE’s close cooperation with the EU on this issue and ongoing efforts to fulfill all the EU’s requirements, Wam said in a statement.

The UAE said it had shared with the EU a detailed timeline of actions that it is currently implementing in accordance with its sovereign legal process and constitutional requirements.

Dubai Refreshment Co's 2018 profits drop 54% after VAT, excise tax

Date: 12 Mar, 2019

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External URL: https://www.arabianbusiness.com/retail/415206-dubai-refreshment-cos-2018-profits-drop-54-after-vat-excise-tax

The implementation of value-added tax (VAT) and excise tax amounted to 60 percent of the Dubai Refreshment Company’s net local revenue and led to higher consumer prices, according to a statement to shareholders posted to the Dubai Financial Market.

In the statement, Dubai Refreshment Company, which is the sole bottler and distributor for PepsiCo in the UAE, said that the company “was forced to pass these taxes to the consumer”.

“This happened at a time when other sugary non-carbonated drinks were not subject to the excise tax and as such did not need to increase their prices,” the statement added.

 “The price increase on company products combined with favourable tax advantages for non-carbonated sugary drinks put DRC products at a significant competitive disadvantage which resulted in significant reduction in sales and profit.”

In 2018, Dubai Refreshment Company’s net profit fell 54 percent to AED 42.3 million ($11.52 million). Revenues totalled AED 646 million ($175.87 million), a 26 percent decline when compared to the year before.

“The situation was especially difficult in the first few months after the excise tax implementation, however, through a combination of sales improvement and cost reduction initiatives, the company has been able to stabilise the situation and return to reasonable profitability,” the statement said.

Dubai Refreshments distributes carbonated, non-carbonated and bottled water products. Some of brands under Dubai Refreshments’ portfolio include Pepsi, Diet Pepsi, 7-Up, Diet 7-Up, Mountain Dew, Miranda, and Shani, Mountain Dew and Aquafina.

What inflation? Cost of living set to decrease in UAE in 2019

Date: 10 Mar, 2019

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External URL: https://www.khaleejtimes.com/business/economy/what-inflation-uae-cost-of-living-set-to-decrease-in-2019-1

Following a big jump in inflation in 2018 after the implementation of a 5 percent value-added tax, some economists believe that the UAE economy will slip into deflation this year following a persistent decline in housing and fuel prices and an oversupply in the retail and hospitality sectors.

Monica Malik, chief economist at Abu Dhabi Commercial Bank, said the UAE consumer price index contracted by 2.4 percent on a year-on-year basis in January from a 0.4 percent rise in December.

“We had expected to see deflation from January as the impact of the introduction of VAT in 2018 dropped out of the annual data and with the fall in housing and fuel prices,” she said.

The UAE levied 5 percent VAT on a host of goods and services from January 1, 2018 as part of a GCC framework agreed among the Gulf nations, resulting in a spike in inflation in the first few months of the implementation.

Contractors want faster processing on VAT refunds

Date: 09 Mar, 2019

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External URL: https://gulfnews.com/business/contractors-want-faster-processing-on-vat-refunds-1.62552671

Dubai for UAE’s contractors, when they get VAT refunds is getting to be as important as the amounts involved.

“As a main contractor, I will have to pay all the VAT-related costs to the subcontractor or supplier,” said K.A. Siddiqui, Partner at Dubai Walls Construction. “It automatically becomes part of the LPO (local purchase order). There can’t be any delay on our part because any delay will invite penalties and becomes a criminal offense.

“The second I invoice something, I have to pay up … whether the client had paid me or not.”

Which is why contractors are now insisting on clients and project promoters to, in turn, shorten the payment cycles in releasing funds due to them.

IMF says VAT launch in Bahrain a 'significant step'

Date: 07 Mar, 2019

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External URL: https://www.arabianbusiness.com/politics-economics/414919-imf-says-vat-launch-in-bahrain-significant-step

Economic activity in Bahrain was subdued in 2018 and is expected to remain at about 1.8% this year, says the International Monetary Fund.

Economic activity in Bahrain was subdued in 2018 and is expected to remain at about 1.8 percent this year, according to the International Monetary Fund (IMF).

The IMF described the introduction of value added tax (VAT) in January as “a particularly significant step”, as are plans for cost recovery in utilities and further means-tested subsidy reforms.

It added that the Fiscal Balance Program (FBP), accompanied by $10 billion in regional support, marks a major step in Bahrain’s reform agenda and has alleviated near-term financing constraints.

NBR holds interactive workshops

Date: 06 Mar, 2019

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External URL: https://www.nbr.gov.bh/releases/34

The National Bureau for Revenue (NBR) held two consecutive VAT workshops for professionals working in the education, healthcare, service and utility industries, during which the NBR recapped general and sector-specific VAT concepts, including invoicing and filing.

Following a question-and-answer session, around 190 representatives from 100 companies and institutions were given the opportunity to visit the unique interactive demo-center that provides innovative learning experiences to maximize participants’ assimilation and implementation of the materials presented.

Today’s workshop is a continuation of the series of workshops organised by the NBR to provide an inclusive platform for all stakeholders from the public and private sectors to ensure the smooth registration of companies with an annual supply of BHD 500,000 to BHD 5,000,000 by June.

VAT challenges in spotlight at forum

Date: 04 Mar, 2019

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External URL: http://www.gdnonline.com/Details/507804

Around 25 key officials from financial institutions in Bahrain attended an exclusive closed roundtable discussion organised by KPMG in Bahrain to discuss the challenges faced by the financial services sector following the formal introduction of Value Added Tax (VAT) in Bahrain. Philippe Norré, partner and head of indirect taxes at KPMG in Bahrain, was the moderator during the event and said “With their first VAT returns due latest by 30 April 2019, banks and other financial institutions still face lack of VAT treatment clarity around several typical financial offerings .

NBR holds interactive workshops for the food, hospitality, communications and entertainment industries

Date: 04 Mar, 2019

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External URL: https://www.nbr.gov.bh/releases/35

The National Bureau for Revenue (NBR) held two consecutive workshops primarily aimed at increasing the VAT awareness of professionals working in the food & hospitality and communications & entertainment industries.

The workshops attracted 150 representatives from 85 vendors, and recapped general and sector specific technical VAT concepts, invoicing and filing requirements, as well as a question and answer session.

Following the workshop, attendees visited the unique interactive demo-center that provides innovative learning experiences to assist vendors in implementing VAT.

The NBR will continue to organize workshops that provide an inclusive platform for all stakeholders from the public and private sectors to ensure the smooth registration of companies with an annual supply of BHD 500,000 to BHD 5,000,000 by June.

Bahrain cutting budget deficit

Date: 03 Mar, 2019

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External URL: https://thearabweekly.com/bahrain-cutting-budget-deficit

Bahrain recently quickened the pace of economic reforms by passing a package of laws, notably the introduction of a VAT and pension reforms.

The 5% VAT is one of the key commitments under the Gulf Finance programme. The agreement provides for the imposition of a VAT in all Gulf Cooperation Council countries during the current year.

The tax is to promote and diversify non-oil financial revenues. It comes after the introduction in December of a tax, ranging 50-100%, on tobacco and its derivatives, soft drinks and energy drinks.

Bahrain gov't revenues 'out of sync' with non-oil growth - Minister

Date: 27 Feb, 2019

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External URL: https://www.arabianbusiness.com/politics-economics/414186-bahrain-government-revenues-out-of-sync-with-non-oil-economy-growth-says-finance-minister

Minister of Finance and National Economy says growth of Bahrain’s non-oil economy has averaged about 7.5% per year Bahrain gov’t revenues ‘out of sync’ with non-oil growth – minister Bahraini government revenues have not kept pace with the growth of the kingdom’s non-oil economy, according to Sheikh Salman bin Khalifa Al Khalifa, Minister of Finance and National Economy.

Speaking at the GCC Financial Forum in Manama on Wednesday, Sheikh Salman said that non-oil economic growth in Bahrain has averaged approximately 7.5 percent per year.

“There’s a very positive story in the non-oil economic growth space,” he said. “What has been the issue is that non-oil revenues generated by the government have not kept up with that growth.”

Bahrain is currently in embarking on a plan to balance its budget by 2022, a key requirement of a $10 billion aid package funded by neighbouring states including the UAE and Saudi Arabia.

Last year, the country managed to trim its deficit by 35 percent to $3.5 billion. On Monday, Bahrain’s government approved a draft budget for the coming two years that projects a reduction of the deficit to $1.63 billion by 2020.

“As we continue on our deficit reduction measures, it will be of extreme importance that we look at the reduction of operating expenditure and an increase in revenues, non-oil revenues in particular, and that all our spending on subsidies is directed towards citizens,” Sheikh Salman said at the event.

Since VAT was introduced in Bahrain on January 1, Sheikh Salman said that more than 2,000 companies have registered already, more than two-thirds of which are below the legal threshold and have registered because of the positive incentives of refunds.

“It’s working well,” he said, noting that laws passed in Bahrain have zero-rated and exempted certain industries to ensure that citizens are protected from inflationary pressure and that economic growth continues.

Looking to the future, Sheikh Salman said he predicts that Bahrain’s logistics, tourism, financial and oil and gas sectors will continue to be the biggest drivers of economic growth.

Earlier in the week, the governor of Bahrain’s Central Bank said he expects the economy to grow at between 2.0 and 2.5 percent in 2019, similarly to last year.

NBR holds workshops along with its first demo center to educate vendors

Date: 25 Feb, 2019

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External URL: https://www.nbr.gov.bh/releases/32

The National Bureau for Revenue (NBR) held two workshops today for retail and wholesale vendors followed by an interactive demo center providing on-spot assistance and information regarding VAT, at the Ministry of Finance and National Economy.

The VAT demo center is designed to provide vendors with a live step-by-step guide on VAT readiness, and is part of the NBR’s efforts in ensuring the correct implementation of VAT within the Kingdom of Bahrain.

140 representatives from various retail and wholesale vendors attended two workshops that provided a general overview on VAT, sector specific content, invoicing and filing requirements, as well as a question and answer session, to ensure they are well informed on relevant VAT concepts.

The workshops were followed by access to the live demo center that provided an interactive experience on technicalities of VAT to ensure vendor readiness on VAT application.

The workshops and demo center are part of the NBR’s commitment to increase public and private stakeholders’ awareness and transparency regarding the treatment of the VAT across all sectors.

The NBR highlighted the importance of spreading awareness on VAT technicalities at this initial phase, given that companies with an annual revenue of BHD 500,000 to BHD 5,000,000 are set to register for VAT by June of this year.

No VAT for international companies holding shows at ADNEC

Date: 13 Jun, 2019

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External URL: http://wam.ae/en/details/1395302767635

Abu Dhabi National Exhibitions Company, ADNEC, today announced that it has obtained the Federal Tax Authority, FTA, License for waiver from Value Added Tax, VAT, for all international companies and organisations participating in or holding shows and conferences at its venues across the UAE with effect from 1st June, 2019.

The VAT waiver covers exhibitions and conferences held over a period not exceeding seven days. The waiver also stipulates that recipients shall not have a permanent base or established business in UAE and shall not be registered or obliged to register in UAE as per the UAE VAT Law.

Speaking on the announcement, Humaid Matar Al Dhaheri, Group CEO of ADNEC, said, “The VAT waiver for ADNEC-hosted event organisers and participants will further stimulate the business tourism sector in the UAE through enhancing the competitiveness of our venues to host major international exhibitions and conferences. This move supports our strategy to attract new and world-renowned events to our venues and increase our direct and indirect contributions to the Abu Dhabi economy.”

“The business tourism sector is a major contributor identified by Plan Abu Dhabi and Abu Dhabi Economic Vision 2030 to accelerate non-oil GDP growth. Through hosting more than 3,390 events and welcoming nearly 17.5 million visitors to date, our venues – Abu Dhabi National Exhibitions Centre and Al Ain Convention Centre – have delivered a direct and indirect economic impact of more than AED32 billion since ADNEC’s inception in 2005,” he concluded.

Sugar Sweetened Beverage – Excise update

Date: 01 Jun, 2019

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Saudi’s General Authority for Zakat and Tax (Gazt) said it approved amendments to existing regulations on May 15, 2019. According to the guidance published in the official gazette, a 100 per cent tax will be enforced on e-cigarettes and its accompanying tools, and a 50 per cent tax on soft and sugary drinks.

The UAE imposed excise duty on certain items at the end of 2017 and is now considering the inclusion of more products on its excise tax list, according to a statement by the Ministry of Finance in April 2019.

Considering the probability of implementation of Excise on Sugar Sweetened Beverages, entities involved in the manufacturing, distribution and selling of these products should evaluate the impact of potential excise levy on their business model and operations.