UAE: Lawyer penalized with imprisonment and fine for tax evasion

Abu Dhabi August 5, 2022:

The Abu Dhabi Criminal Court convicted the accused Asim Ghafoor, who has American citizenship, of committing two crimes of tax evasion and money laundering. The court sentenced him to three years in prison and imposed a fine of AED 3 million, along with deportation from the UAE.

The case arose upon the American authorities’ request for judicial assistance regarding their investigations of the accused for making suspicious money transfers to the state.

The UAE Public Prosecution (PP) started its procedures by studying the judicial assistance request and verifying the nature of the financial transactions related to the aforementioned accounts and bank transfers. Suspicions of money laundering crime aroused as the accused carried out international transfers without proof of their source. Based on the findings of the investigations, the accused was found guilty by the Criminal Court on charges of tax evasion and money laundering.

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OTA: Taxpayer Services conducts Tax Awareness Campaigns through Field visits

Muscat July 29, 2022:

For those subject to VAT in the Governorate of Muscat the Auditor Services Department of the Tax Authority launched awareness campaigns on the importance of tax compliance from 24 July to 18 August.

Specialists from the Working Group carried out awareness-raising campaigns in the Auditor Services of the Tax Authority on 24 July by visiting a number of shops in the state of Muttrah. They provided subjects with necessary information on the accurate methods of recording tax and the timely submission of tax returns through the electronic portal of the tax authority.

During the awareness drive, brochures and manuals on tax laws were also distributed. These manuals also explain the step-by-step process to clear all tax transactions in their electronic system.

The widespread campaign contributes to raising awareness of the importance of tax compliance and also helps ease the completion of tax transaction.

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ZATCA initiates Procedures for Implementing Phase II of E-invoicing Project

Riyadh July 27, 2022:

Zakat, Tax and Customs Authority (ZATCA) clarified that it has started the procedures for implementing Phase II (Integration Phase) of E-invoicing. This phase aims to integrate E-invoicing solutions of taxpayers with ZATCA’s platform -FATOORA, where the authority will inform targeted taxpayers to complete procedures for implementing the second phase.

ZATCA has revealed that the implementation of Phase II of the E-invoicing project will begin on January 1, 2023, with selected taxpayers in the first wave. The selection was based on the revenue subject to VAT for the year of 2021 exceeding 3 billion SAR.

ZATCA stated that Phase II requires additional requirements, the most prominent being the integration of taxpayer’s E-invoicing solutions with FATOORA, issuance of electronic invoices in a specific format, and inclusion of additional fields in the invoice. Furthermore, the procedure of E-invoicing would occur gradually in waves, and ZATCA would inform the requirements directly at least six months prior to the integration date.

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UAE’s FTA increases Inspection Visits 104% in 6 months

Dubai July 22, 2022:

The Federal Tax Authority (FTA) significantly expanded its efforts in collaboration with various government departments, ministries and authorities to protect consumers from non-compliant products, combat tax evasion and ensure compliance with tax legislation and procedures.

During the first half of this year, the FTA carried out 9,948 inspection visits in local markets across the country in collaboration with the Ministry of Economy, Customs and Port Security and various Economic Development Departments.

Inspections conducted in the first half of 2022 increased by 104 percent compared to 4,878 inspections conducted in 2021 during the same period.

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Ajman Free Zone witnesses 33 percent Increase in Corporate Tax Companies

Dubai July 15, 2022:

As the UAE gears up for the implementation of corporate tax in 2023. Ajman Free Zone records a significant increase of 33 percent in the number of corporate tax institutions.

H.E Eng. Ali AlSuwaidi, Director-General of Ajman Free Zone, stated that “The Federal Corporate Tax will become applicable in 2023 and is believed to propel the country forward.”

“Businesses are expected to align their relevant processes in order to ensure full compliance with the new law, and will need the assistance of specialized tax advisory firms specializing in this domain. As a global business hub, Ajman Free Zone is prepared to address these requirements with innovative solutions and cost-effective packages, while facilitating growth opportunities for tax advisory companies. Moreover, we recognize the importance of these entities to enhance our performance and ensure compliance with federal regulations.”

“In addition, the introduction of the corporate tax is set to position the UAE as an attractive destination for foreign direct investments. This will drive us to help companies grow and expand, streamline their business processes, and attract more foreign investors who can benefit from the competitive advantages of Ajman, one of the region’s top investment destinations,” he added.

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Oman: Collection of Withholding Tax Suspended till 2025

Muscat July 14, 2022:

As part of the Sultanate of Oman’s Vision 2040 plan with a vision of achieving high economic growth, His Majesty Sultan Haitham bin Tarik floated Oman’s Economic Stimulus Plan on 3 March 2021. According to the plan, a circular was issued by Capital Market Authority (CMA) announcing the suspension of the collection of withholding tax at 10% on dividends of shares, returns on Sukuk and interests on bonds till May 6, 2022.

The circular was addressed to the general public of investors, public joint stock companies, Muscat Stock Exchange, Muscat Clearing and Depository Company, audit and law firms and the companies operating in the field of securities.

However, in relation to the questions raised on social media by investors and those interested in investing on the Muscat Stock Exchange on the fate of the decision, a new Circular 11/2022 was issued announcing the extension of the suspension of the collection of withholding tax on dividends and interest for a further period of five years till 2025 (i.e no withholding tax will apply during these years). The CMA clarified that this decision to extend suspension till 2025 was taken as part of the economic stimulus plan.

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ZATCA sets 15th July as deadline to submit excise tax returns for last May and June

Riyadh July 12, 2022:

The Zakat, Tax and Customs Authority (ZATCA) has requested all taxpayers from the business sector subject to selective goods tax to submit their tax returns for the months of the last May and June. The deadline for submission is set on the fifteenth of this month without fail.

The Excise Goods Tax in force in the Kingdom is imposed on goods that have a negative effect on public health or the environment at varying rates and the list includes soft drinks, energy drinks, sweetened drinks, and tobacco and its derivatives.

Taxpayers can submit their declarations quickly through the website (zatca.gov.sa), in order to avoid the penalties for non-submission within the specified period. The fines are at the rate of 5% of the value of the tax that should have been declared for each month’s delay in submitting the declaration.

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OMR 301 million collected as VAT in Oman in 2021

Muscat July 7, 2022:

The value-added tax (VAT) increased by 0.3 percent over the estimated figure to reach OMR 301 million in 2021 in Oman. The authorities also collected OMR 103 million in selective tax, an increase of 8.8 percent during the same period.

This followed a unified Gulf Cooperation Council (GCC) agreement to implement VAT to find alternative sources of revenue other than oil and gas.

Statistics further reveal that the total tax and fee revenues decreased by 8 percent to reach OMR1.49 billion at the end of 2021 compared to the approved budget estimate of OMR1.62 billion. This decline was mainly attributed to the repercussions of the COVID-19 pandemic on the national economy which had resulted in frequent closures and restrictions on goods and travel movements through international ports.

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FTA released new Public Clarification on Excise Goods

Dubai July 1, 2022:

The Federal Tax Authority (FTA) has issued a public clarification EXTP007 offering guidance on excise goods. The guide explains the scenarios where relief from excise tax may be granted for excise goods that are found to be deficient, shortage, considered as wastage, or where goods are intended to be destroyed.

The highlights of the public clarification are as follows:

Excise goods that are considered wastage or deficient when located within a designated zone will be treated as released for consumption and therefore will be subject to excise tax. However, as an exception, goods will not be considered to be released for consumption where:

  • Warehouse keeper notifies FTA within 30 days of discovering the deficiency in stock or shortage in quantity. This notification is given through a form on the e-services portal – Lost and Damaged declaration EX203B.
  • Shortage or deficiency is due to a legitimate cause accepted by FTA.
  • Where these conditions are met, a taxable person will not be required to account for excise tax on deficient or missing goods.

    View more in the guide.

    ZATCA denies rumors on VAT Exemption Certificate

    Riyadh June 30, 2022:

    Saudi Arabia’s Zakat, Tax and Customs Authority (ZATCA) have denied the existence of a value-added tax (VAT) exemption certificate.

    The Authority clarified that all business owners in the region who engage in economic activities are to obligatory register in the VAT system if their annual revenues reach the mandatory limit, which is SR 375,000. However, business owners who engage in economic activities and whose annual revenues are less than SR 187,500 are not obligated to register.

    The Authority also clarified that businesses whose annual revenues exceed SR 187,500 but do not exceed SR 375,000 are eligible for the optional VAT registration.

    If revenue touch the mandatory registration threshold, then business owners are required to register within 30 days.

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