date: 20190712

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.

date: 20190609

Organized By: Vikas Panchal

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.

date: 20190520

Organized By: Reuters

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.

date: 20190515

Organized By: Sam Bridge

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.

date: 20190516

Organized By: waheedabbas

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.

date: 20190327

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.

date: 20190320

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…

date: 20190314

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

date: 20181222

Organized By: National Bureau of Taxation

External URL: https://www.nbt.gov.bh/vat_news_6

The Assistant Undersecretary for Development and Policy of Public Revenues at the Ministry of Finance and National Economy (MoFNE), Rana Ebrahim Faqihi, affirmed the Ministry’s commitment to increasing consumers and businesses’ awareness about the VAT procedures and legal framework, in line with the VAT Law and its Executive Regulations, underscoring the Ministry’s commitment to strengthening consumer protection and transparency.

Faqihi added that the Ministry of Finance and National Economy and the National Bureau for Taxation have dedicated resources towards raising VAT procedural and legal framework awareness, including an extensive series of workshops for business owners and companies that will be subject to the VAT, in addition to directly communicating with businesses to ensure effective and seamless implementation of VAT on January 1, 2019.

The Assistant Undersecretary noted that all registered businesses are required to display their VAT registration certificate, which includes the business’s Commercial Registration number and the VAT registration date, in a prominent place that is clearly visible to consumers prior to levying the 5% VAT, to avoid violations.

The Assistant Undersecretary stressed that all registered businesses are also legally required to display the final prices of all goods and services – inclusive of tax before any sale.

The Assistant Undersecretary went on noting that it is a violation to mislead consumers.

The Assistant Undersecretary concluded by highlighting NBT’s efforts towards establishing multiple communication channels including the hotline 80008001, establishing the email vat@mof.gov.bh, as well as detailing VAT information uploaded on NBT’s recently launched website www.nbt.gov.bh

date: 20181225

Organized By: National Bureau of Taxation

External URL: https://www.nbt.gov.bh/vat_news_8

Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa hailed the Royal directives of His Majesty King Hamad bin Isa Al Khalifa to review the VAT mechanisms during the trial application period and observe the citizens needs through the exemption of basic commodities and services.

The Ministry of Finance and National Economy as well as the governmental entities concerned with the application of VAT will implement the Royal directives by ensuring the soundness of application procedures from day one of the trial period while taking into consideration the importance of market stability and the steady and smooth supplies of commodities and services to the citizens and residents to ensure the continuity of development and growth of the sectors whilst ensuring the citizens’ needs, he said.

This came during the meeting held at the Ministry of Finance and National Economy premises in the presence of Industry, Commerce and Tourism Minister Zayed bin Rashid Alzayani and Bahrain Chamber of Commerce and Industry (BCCI)’s deputy chairman Khalid Najibi.

Shaikh Salman stressed the importance of continuous communication, consultation and discussion with the Bahrain Chamber of Commerce and Industry regarding the VAT mechanisms. He cited the ongoing cooperation and discussion of viewpoints to reach the results that would serve the aspirations in the interest of the homeland and the citizen foremost.

date: 20181221

Organized By: Bahrain Chapter-The Institute of Chartered Accountants of India

External URL: https://www.linkedin.com/feed/update/urn:li:activity:6481849111883677696

Bahrain Chapter-The Institute of Chartered Accountants of India in association with MCA Pyramid Consulting hosted a successful event on VAT implementation regulations and VAT challenges. A session on Supply chain Digitization was also conducted. Excom members with speakers Mr Girish Chand, Mr Ashish Chakravarti. Thank you to the speakers, MCA Pyramid consulting and, CA Lakshmanan R

date: 20181203

Organized By: WAM/Rasha Abubaker/Esraa Ismail

External URL: http://wam.ae/en/details/1395302724911

The Federal Tax Authority (FTA) has announced that only those goods which have previously been subject to VAT before the supply in question may be subject to the Profit Margin Scheme. As a result, stock on hand of used goods which were acquired prior to the effective date of Federal Decree-Law No. (8) on Value Added Tax (VAT law), or which have not previously been subject to VAT for other reasons, are not eligible to be sold under the profit margin scheme. VAT is therefore due on the full selling price of such goods.

The Authority had clarified the above to address questions from the audience at an awareness session recently organised at the Abu Dhabi Chamber of Commerce and Industry to raise awareness among car dealers about the procedures and tax treatment for this vital sector, as well as the efforts made by the FTA to remove obstacles facing those working in the sector.

The session brought together several car dealers, experts and other stakeholders from the industry, where the FTA team introduced them to the procedures for implementing VAT and the Profit Margin Scheme.

In a press statement issued today, FTA Director-General Khalid Ali Al Bustani asserted that the Federal Tax Authority has been committed, since the tax system went into effect, to raising awareness among all business sectors to abide by their tax obligations, by means of various media and digital channels, as well as direct contact through awareness campaigns across all seven emirates. The Authority also provides various tax awareness instruments through its website, which was designed according to international best practices.

“The Federal Tax Authority is committed to enhancing its partnerships with business sectors and providing assistance for them to fully comply with tax regulations,” Al Bustani said. “The Authority maintains constant communication with retailers, producers and service providers to identify their views and ensure a smooth and seamless implementation of the UAE tax system with minimal effects on their business activities.”

date: 20181218

Organized By: BONDS NEWS - Reporting by Stephen Kalin and Marwa Rashad; Editing by Gareth Jones

External URL: https://www.reuters.com/article/saudi-budget-tax/saudi-arabia-collects-twice-as-much-vat-as-expected-in-2018-budget-document-idUSB2N1YE016

Saudi Arabia collected 45.6 billion riyals ($12.16 billion) from value-added tax (VAT) in 2018, more than double its initial estimate, budget documents showed.

The Saudi budget expects total tax revenues of 166 billion riyals this year, up from an initial estimate of 142 billion riyals, the document showed.

The Saudi government has said it expects VAT, which was introduced earlier this year, to be one of the main generators of non-oil revenue. ($1 = 3.7507 riyals) (Reporting by Stephen Kalin and Marwa Rashad; Editing by Gareth Jones)

date: 20181213

Organized By: Khaleej Times - Waheed Abbas

External URL: https://www.khaleejtimes.com/business/vat-in-uae/phase-2-of-tourist-vat-refund-scheme-rollout-from-dec-16-

The Federal Tax Authority (FTA) on Wednesday said all preparations were complete to launch phase 2 of the Tax Refunds for Tourists Scheme from Sunday, December 16. The scheme would cover 12 air, land and sea ports across the UAE.

The first phase went into effect on November 18, 2018, covering the Abu Dhabi, Dubai and Sharjah international airports.

The second phase will cover Al Ain International Airport, Al Maktoum International Airport and Ras Al Khaimah International Airport; as well as 2 sea ports: Zayed Port in Abu Dhabi and Port Rashid in Dubai; and 4 land ports: Al Ghuwaifat Border Post in Abu Dhabi, Hili Border Port and Al Madheef Border Crossing in Al Ain, and Dubai’s Hatta Border Exit.

“The FTA coordinated with the system operator Planet, running all necessary experiments to ensure the scheme is implemented smoothly and accurately,” said Khalid Ali Al Bustani, director-general of FTA.

Al Bustani projects daily refunds of value-added tax (VAT) to grow quickly in the coming period. The number of refund requests processed surpassed 3,800 daily transactions.

The FTA asserted that to be refundable, tax invoices must be issued by retail stores included in the scheme and registered in the system; these venues can be identified by visibly showcasing ‘tax-free’ stickers on their storefronts.

The FTA had outlined conditions for a tourist to be eligible for a tax refund, namely: The tourist in question is at least 18 years old; goods eligible for the scheme are supplied to an overseas tourist who was on UAE soil when the purchase was made, and who intends to exit the UAE along with the purchased items within 90 days; goods must be exported out of the UAE by the tourist within 3 months of the date of supply.

date: 20181211

Organized By: Out Law - Joanne Clarke

External URL: https://www.out-law.com/en/articles/2018/december/saudi-arabia-and-bahrain-vat-deadlines-fall-in-december/

VAT will also come into effect in the Kingdom of Bahrain with effect from 1 January 2019, with an obligation for some businesses to register in December 2018.

Small businesses whose obligation to register for VAT in the Kingdom of Saudi Arabia (KSA) was deferred under transitional provisions will have to submit an application for registration by 20 December 2018. In addition transitional arrangements which meant that VAT did not have to be paid in respect of existing contracts come to an end on 31 December, meaning that contract prices may need to be renegotiated.

VAT was introduced in the KSA with effect from 1 January 2018.

Appreciating the challenge facing businesses in the region, the minister of finance Mohammed Al-Jadaan, together with the board of the General Authority on Zakat & Tax (GAZT), approved the inclusion of transitional provisions in the VAT Implementing Regulations in September 2017. Two of these transitional provisions may now require action by businesses.

Under KSA VAT rules, any person whose annual value of taxable supplies exceeds or is expected to exceed the mandatory registration threshold of SAR375,000 ($100,000) is required to register for VAT with GAZT within 30 days.

However, if the annual value of their supplies does not exceed SAR1 million ($267,000) the transitional rules provided relief from registration in advance of 1 January 2018. The rules defer the effective date of registration for these businesses to 1 January 2019, but the application for registration has to be submitted by 20 December 2018.

“To allow sufficient time to gather the necessary information and documentation for the registration application, together with the time it may take for GAZT to process your application, it is important that businesses affected by this transitional provision, who have not already voluntarily registered, start the process as soon as possible,” Joanne Clarke said.

date: 20181105

Organized By: Khaleej Times - Surandar Jesrani

External URL: https://www.khaleejtimes.com/business/economy/how-vat-in-bahrain-/impacts-its-neighbours

Value-added tax, being all pervasive, impacts a country’s economy as well as the industries therein. Furthermore, VAT impact also spills over to the import and export of goods and services. The UAE, all along, has business ties with Bahrain through either a local presence in Bahrain (as branch or local entity) or through export/import of goods or services.

Typically, after the introduction of VAT in a country, businesses discover that their entire business ecosystem – i.e., their vendors, suppliers and customers located in and outside the country – are also part of their business. Underlying reason for this tectonic shift is the fact that in VAT, businesses cannot take unilateral decisions and have to take decisions bilaterally as a buyer can debate on the applicability of VAT (for example, whether the transaction qualifies as ‘export’ or not).

Outbound transactions

As mentioned above, dependency between the supply chain intensifies, particularly, in cases of outbound supply of goods (like goods being supplied to Bahrain from the UAE).

Typically, in such transactions there are two aspects to be vetted, one whether the supply qualifies as export from UAE and whether the transaction qualifies as import in Bahrain. Thus, it is advisable for UAE entities having business interests in Bahrain to initiate early dialogue on the likely impact to identify possible issues and documentation requirements to avoid VAT debates/disputes with customers.

Import of goods

Typically, VAT is payable at the time of import of goods (unless facility of deferment is provided) along with customs duty.

Thus, after introduction of VAT, imports in Bahrain may attract VAT and thus, at the time of import itself it will be critical to determine the applicability of VAT on goods being imported in Bahrain (as certain goods such as specified medicines may not attract VAT). Also, procedural aspects like declaration of the VAT registration number on import documents, linking of the VAT number with customs, etc, also become critical during transition.