FTA Releases a Guideline on Input Tax Apportionment
Date: 21 Mar, 2023
Dubai March 21, 2023:
On 20 March 2023, the Federal Tax Authority release a guideline on Input Tax Apportionment (VATGIT1) to provide in understanding the input tax apportionment and special methods for input tax apportionment when applying the VAT legislation.
This document describes the rules and methods for input VAT recovery when both VAT taxable and VAT exempt activities are performed.
In addition, VATG1 will replace the previously released Input Tax Apportionment: Special Methods VAT Guide.
Bahrain: NBR Announces Mandatory Digital Stamps for Waterpipe Tobacco Products
Date: 19 Mar, 2023
Dubai March 19, 2023:
The National Bureau for Revenue (NBR) in cooperation with De La Rue announced the successful completion of the first implementation milestone of the Digital Stamps Scheme on waterpipe tobacco “molasses” products. This scheme aims to track excise goods from the manufacturing stage to the consumption point through digital stamps, which will protect against the circulation of counterfeit or illegal products.
The National Bureau for Revenue (NBR) announced that starting from 19 March 2023, the import of waterpipe tobacco products without a digital stamp will be prohibited through the customs points of entry in Bahrain.
UAE FTA Introduces New E-commerce Related VAT Obligations
Date: 17 Mar, 2023
Dubai March 17, 2023:
The Federal Tax Authority (FTA) has introduced new e-commerce reporting and record-keeping obligations for resident taxpayers. These obligations, published in an amendment to the UAE VAT Executive Regulation, change the sourcing rules for e-commerce supplies made by residents in the Emirates. Amendments to the voluntary disclosure procedure have also been enacted.
The new reporting and record-keeping obligations are applicable from July 1, 2023, or the first tax period following the calendar year in which the threshold was exceeded.
- Taxpayers that meet the threshold should be subject to the e-commerce reporting obligation for a set time period.
- For taxpayers that have exceeded the threshold during year 2022: 18 months from the first tax period on or after July 1, 2023.
- For taxpayers that have exceeded the threshold after calendar year 2022: two years from the first tax period of the calendar year following the year the taxpayer has exceeded the threshold.
- After this time period, whether it be 18 months or two years, the taxpayer should re-assess whether it has met the threshold in the calendar year that has just ended.
The voluntary disclosure rules will be applicable from March 1, 2023.
View the document to know more about the amendments’ impact and obligations for taxpayers.
UAE and Turkey sign Trade Agreement
Date: 15 Mar, 2023
Dubai March 15, 2023:
The United Arab Emirates and Turkey signed a comprehensive economic partnership agreement (CEPA) in Abu Dhabi. The aim of the deal is to increase trade between the two countries to $40 billion in the next five years and create thousands of new jobs.
Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, said in Abu Dhabi that the agreement was a milestone for the region.’It promises to write a new chapter in the UAE-Turkey bilateral relations, transforming long-standing friendship into a dynamic partnership for growth’ he said. ‘The agreement, which is expected to come into effect from the middle of this year, will create 25,000 highly skilled jobs in the UAE and 100,000 jobs in the Turkish market in the next 10 years’, Dr Al Zeyoudi told.
Speaking in Istanbul Turkish President Tayyip Erdogan said ‘The Comprehensive Economic Partnership Agreement (CEPA) will certainly take economic and trade relations between the two countries to a new phase’.
FTA Issues Excise Tax Public Clarification EXTP010 on Registration of Warehouse Keeper
Date: 13 Mar, 2023
Dubai March 13, 2023:
The Federal Tax Authority (FTA) of UAE has issued the Excise Tax Public Clarification EXTP010 on ‘ Registration of Warehouse Keeper and Registration and Renewal of Registration of Designated Zones’. This new issue replaces EXTP005 effective from 1st April 2023.
Every designated zone in the UAE is required to have an appointed warehouse keeper who is responsible for overseeing the operation of the designated zone and ensuring that the conditions and security requirements imposed over the designated zone continue to be met. A warehouse keeper must apply to the FTA to be authorised to oversee a designated zone.
This Public Clarification provides more details on these conditions and criteria to register as a warehouse keeper and to register or renew the registration of a designated zone, effective from 1 April 2023.
Dubai Custom Reinstates Previous Import Value threshold of AED 1,000 for Shipments
Date: 07 Mar, 2023
Dubai March 7, 2023:
The new customs duty, which was to be levied on goods bought internationally with a value of more than AED 300 will no longer apply in Dubai as of March 1, 2023. This is according to an email sent by Dubai Customs, which also announced that as of March 1, 2023 the previous threshold of AED 1,000 for the exemption of parcels and shipments has been reinstated.
In January this year, Dubai introduced new customs duty on goods bought internationally with a value of more than AED 300, which earlier only applied to goods exceeding AED 1,000.
The email said, “Kindly be informed that Paragraph (a) of Article (2) of Customs Notice 5/2022 related to exemption of consignments with value not exceeding AED 300 has been suspended and that it has been decided to re-establish the previous threshold for exemption of parcels/shipments of AED 1,000 effective March 1, 2023, until further notice.”
OTA Launches App to Combat Counterfeit Goods
Date: 05 Mar, 2023
Muscat March 5, 2023:
The Oman Tax Authority (OTA) has launched an app called ‘Ta’akad’ to protect consumers from counterfeit goods and verify the validity of tax stamps on products.The app is available on both Android and IOS devices and allows consumers to report any commodity which violates the law.
An official at Tax Authority said, ‘The app aims to prevent the spread of counterfeit goods in the local markets and ensures the validity of the tax stamp on the products and protects the consumer.’ He added, ‘The consumer can now report any commodity that violates the law through the application.’
The Tax Authority is also working with the Royal Oman Police and the Consumer Protection Authority to prevent the entry of cigarettes and tobacco products without the distinctive tax stamp into the country.
NBR to Prevent the Import of Hookah Tobacco Products without Digital Stamps
Date: 04 Mar, 2023
External URL: https://www.nbr.gov.bh/releases/153
Manama March 4, 2023:
The National Bureau of Revenue (NBR), in cooperation with De La Rue International Ltd., successfully completed the first phase of applying the distinctive mark system (digital stamps) on hookah tobacco products (Moassel). Under this control system, digital stamps containing security codes are placed on the excise goods to track them from the manufacturing stage to the point of consumption, which helps reduce illegal trade and prevent the circulation of counterfeit products.
The NBR indicated that registration in the digital stamp system is concerned with selective importers of hookah tobacco products (Moassal), manufacturers and related institutions in the supply chain starting from production and import until offering products in the local markets in the Kingdom of Bahrain.
The agency stressed the importance of the first phase of implementing the system which began on November 20, 2022, and is concerned with receiving requests to purchase digital stamps by those subject to selectivity registered with the agency, through the electronic system designated for that, while allowing the trading of products that do not contain digital stamps in the markets.
The importance of complying with this stage is to ensure the readiness of importers before March 19, 2023 for the second stage, in which importers must ensure that all products arriving at the ports of the Kingdom of Bahrain for customs clearance bear digital stamps.
The last stage is the application stage within local markets, where it is prohibited at this stage to possess, trade, sell or supply any hookah tobacco products that do not contain digital stamps from June 18, 2023.
Federal Tax Authority Teams Up with SAP to Advance Digital Transformation Efforts
Date: 03 Mar, 2023
External URL: http://wam.ae/en/details/1395303134409
Dubai March 03, 2023:
FTA has signed an MoU with global technology company SAP, which specialises in enterprise software solutions and cloud computing, to collaborate towards advancing the FTA’s standing in the international tax sector.
The agreement also underlines FTA’s role in driving sustainable financial diversification, leading digital transformation efforts, and efficiently implementing innovation and smart technology plans.
The MoU was signed by His Excellency Khalid Ali Al Bustani, Director General of the FTA, and Zakaria Haltout, Managing Director of SAP UAE.
ZATCA Authorities Carry Out more than 10,000 Inspection Visits
Date: 27 Feb, 2023
Riyadh February 17, 2023:
The Zakat, Tax and Customs Authority (ZATCA) carried out more than 10,000 inspection visits during the month of January, on markets and shops in various cities of the Kingdom. The Authority stated that the visits carried out by its supervisory and inspection teams, in cooperation with the National Program for Combating Commercial Concealment, included a number of commercial sectors, most notably retail, the food sector and professional services. The inspection visits aimed to enhance compliance with the provisions of the tax regulations in force in the Kingdom.
The Authority iterated that its inspection visits to markets and shops come in the context of its oversight efforts, which it implements through field inspection teams, aim at enhancing the degree of tax compliance among taxpayers from the business sector and limiting commercial transactions that violate the instructions and controls that fall within the jurisdiction of the Authority.
FTA issues VAT Public Clarification P033 – Amendments to Emirates’ Reporting – Electronic Commerce Supplies
Date: 26 Feb, 2023
Dubai February 26, 2023:
Following the Ministerial Decisions on which the Criteria and Conditions for Electronic Commerce for Record Keeping of the Supplies Made, the Federal Tax Authority (FTA) has issued a Public Clarification VATP033 guide of the approved amendments for the Emirate Reporting.
VAT Public Clarification P033 – Amendments to Emirates’ Reporting – Electronic Commerce Supplies by Qualifying Registrants covers reporting guidelines for taxable e-commerce registrants on the reporting of standard rates supply. In addition, taxable e-commerce registrants are required to track and keep records of supplies made from and to each emirate.
View the VAT Public Clarification P033 for more details.
MoF issues a Ministerial Decision on the Criteria and Conditions for Electronic Commerce for Record Keeping of Supplies Made
Date: 25 Feb, 2023
Dubai February 25, 2023:
The Ministry of Finance (MoF) issued a Ministerial Decision on the Criteria and Conditions for Electronic Commerce for Record Keeping of the Supplies Made.
The decision came following the issuance of Cabinet Decision No. 99 of 2022 on the amendment of some provisions of Cabinet Decision No. (52) of 2017 on the Executive Regulation of Federal Decree-Law No. (8) of 2017 on VAT, which has amended Article 72 of the Executive Regulation and introduced for some taxable persons (whose value of e-commerce supplies of goods and services exceeds AED 100 million) the requirement to keep records of e-commerce transactions according to the emirate in which these supplies are received.
As per the decision, a supply of goods and services shall be considered to be an electronic commerce supply made via an electronic commerce medium where all the following criteria and conditions are met:
- The goods and services are listed or advertised on an electronic commerce medium;
- The goods and services are ordered through the electronic commerce medium, regardless of whether the payment is made online or not;
- In the case of a supply of goods, the goods are delivered to a location specified by the customer whereby this location is not owned by the supplier nor operated by that supplier.
- In the case of a supply of services, the services are provided, or the right to receive the services is granted to the customer with minimal or no human intervention.
The decision defines an electronic commerce medium as “A website, portal, gateway, interface, platform, marketplace, programme interface (API), or similar application which facilitates the sale of Goods or Services, including electronic means, electronic platform, a store in social media and electronic applications or similar applications.”
Qatar may Introduce 5% VAT in Summer 2023
Date: 22 Feb, 2023
Doha February 22, 2023:
Qatar’s VAT regime can be expected during 2023. The country is said to be progressing with plans to introduce a 5 percent VAT regime in the Summer and it is anticipated that its authorities may soon announce a value-added tax (VAT) law and executive regulation in the months to come.
VAT would affect most sales of goods and services in Qatar, with limited exemptions (e.g. financial services, insurance) and consumption tax relief. VAT-registered businesses will be able to claim credit for VAT paid on their expenditure, relating to their taxable business activities.
UAE PASS Digital Signature feature Introduced to EmaraTax
Date: 20 Feb, 2023
Dubai February 20, 2023:
The Federal Tax Authority (FTA) introduces single sign-on UAE PASS feature – the first national digital identity – to the EmaraTax platform which tax system registrants can use in all procedures and services on the platform, available through the official FTA website. This feature further advances the sweeping digital transformation taking place across the UAE.
The Authority stated that the new feature was launched in collaboration with relevant authorities and is designed to meet the highest standards of security, confidentiality and accuracy of information and procedures in an effort to speed up processes, improve user experience and meet customers’ aspirations.
Mr Abdulla Al Bastaki, Executive Director of the Information Technology Sector at the Federal Tax Authority, called on all FTA customers to take advantage of the new feature and activate their UAE PASS accounts and then use them to access the Authority’s services quickly and easily from the convenience of their devices.
Qatar : GTA announces Detection of Tax Evasion Cases
Date: 17 Feb, 2023
Doha February 17, 2023:
General Tax Authority’s (GTA) Revenue Protection Team have identified tax evasion cases in the region by a group of individuals and companies. The GTA’s investigations revealed that two companies operating in the contracting sector had committed acts that constitute tax evasion crimes. The GTA has taken the necessary measures by referring these companies to Public Prosecution for legal action and to recover the evaded amounts, a total of QR 24 million, in addition to the penalties and fines stipulated by applicable laws.
The competent court has issued convictions against both the companies and their authorized signatory partner. GTA referred that tax evasion is a serious impediment to tax systems worldwide, adding that such criminal practices harm the national economy and compromise equality and fair opportunities among taxpayers while eroding the competitive advantage of compliant companies. Moreover, the GTA reiterated its commitment to combat tax evasion and take legal action against anyone guilty of such crimes.
The GTA is taking proactive measures across all its departments to foster voluntary tax compliance and enhance community confidence in the tax system. These ongoing efforts aim to minimize tax evasion and create an environment of greater tax compliance. Finally, GTA urges all taxpayers to strictly comply with the provisions and procedures outlined in the tax laws to avoid any potential legal consequences.
ZATCA issues Circular on ‘VAT Treatment of Certain Supplies in the Financial Services Industry’
Date: 10 Feb, 2023
External URL: https://bit.ly/3Y629LJ
Riyadh February 10, 2023:
The ZATCA of KSA has issued Tax Circular on ‘VAT Treatment of Certain Supplies in the Financial Services Industry’.
The circular aims to provide guidance on the application of VAT rules in respect of two types of transactions involving banks and financial institutions in the KSA which are Supplies of services by International banks established in KSA to non-resident customers; and Incentives provided by credit card companies to banks in return for achieving operational targets.
Oman: The Obligation Phase of Digital Tax Stamps has begun with Inspections
Date: 05 Feb, 2023
External URL: https://bit.ly/3Z3ffur
Muscat February 5, 2023:
Oman Tax Authority (OTA) has commenced the phase of mandatory local obligation with respective to its decision of Tax Stamp implementation in the Sultanate of Oman. Inspectors of the Tax Authority have conducted inspections in many local markets since the first of February to ensure that the Digital Tax Stamp (DTS) is being put on the products of excise goods.
The system of Tax Stamps aims to protect the consumer from counterfeit excise goods. The tax stamps are scanned at the entry points to the Sultanate of Oman to ensure that the products are original and intact, and to reduce the incidence of smuggling these products to the Sultanate. This move thereby reduces the possibility of evasion from Excise Tax while ensuring timely and effective tax collection and meeting compliance standards under the WHO (FCTC).
FTA Launches ‘Tax Support’ Initiative for 2023
Date: 31 Jan, 2023
Dubai January 31, 2023:
The Federal Tax Authority (FTA) has launched the ‘Tax Support’ initiative to raise tax awareness among business sectors in the UAE. The initiative aims to achieve awareness through direct and sustained contract, as a means to enhance compliance with tax laws and regulations.
The first workshop under the initiative was held on January 24th and 25th as a collaboration between the FTA and On Time Business Solutions Centre, which is located in Oud Metha, Dubai.
The Authority stated that the activities of the ‘Tax Support’ initiative will continue throughout the year and cover all seven emirates, in collaboration with relevant centres and entities in the government and private sectors, where experts from the FTA will go on several tours in accordance with a comprehensive timeline.
The initiative targets taxpayers and aims to facilitate the process of paying taxes for them, in an effort to raise the rate of tax compliance and awareness around the UAE, in addition to responding to taxpayer enquiries and observations, directing them to the available tax guidelines, and correct procedures.
FTA Invites Select Businesses to Start their CT Registrations
Date: 30 Jan, 2023
Dubai January 30, 2023:
Big businesses and public companies get their first shot at registering for Corporate Tax (CT) via EmaraTax. A staggered approach for CT registering gives mid- and small businesses more time to be ready and get their processes in order. At the same time, it gives the tax authorities to fine-tune all of the related processes before the implementation date for the Corporate Tax from June 2023.
Currently, the ‘big corporates and public joint stock companies (PJSC) have been invited to do their CT registrations through the EmaraTax platform. The early registration period will continue until May. Registration is open for certain categories – i.e. a ‘Legal Person’, which includes PJSCs and UAE private companies.
Are you ready for UAE corporate tax 2023? Chat with our tax experts now.
KSA: Voluntary Participation in Phase 2 of E-invoicing
Date: 26 Jan, 2023
Riyadh January 26, 2023:
The Saudi Arabian Tax and Customs Authority ZATCA, has recently changed its approach to voluntary participation in Phase 2 of E-invoicing in the Kingdom.
Previously it has not been allowed to voluntarily start the implementation of Phase 2, however, with the update of the guideline published in December 2022, taxpayers now have the option to start following Phase 2 requirements on a voluntary basis before their integration enforcement date.
View the guideline.
FTA Releases User Manual on Login to EmaraTax using UAE PASS
Date: 25 Jan, 2023
Dubai January 25, 2023:
The UAE Federal Tax Authority (FTA) released a User Manual on Login to EmaraTax using UAE PASS. This manual helps taxpayers navigate through the application and depicts the steps in an easy-to-understand manner.
Here is the manual for anyone interested in knowing more about the login procedures.
FTA opens Pre-registration for Corporate Tax through EmaraTax Platform
Date: 22 Jan, 2023
Dubai January 22, 2023:
The Federal Tax Authority (FTA) has launched early registration for corporate tax through the EmaraTax platform for digital tax services, in line with Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, which stipulates that Taxable Persons will become subject to Corporate Tax from the beginning of their first financial year that starts on or after 1 June 2023.
The Authority explained that the early registration period is available from January 2023 to May 2023 for certain categories of companies operating in the UAE. These selected companies will be receiving invitations from the FTA by email and SMS, allowing them to register via the EmaraTax platform.
Following this phase, the FTA will announce at a later date when registration will be open for other companies and businesses. The FTA will make sure to give ample time for companies and businesses to apply for registration and meet their legal obligations. When registration opens, priority will be given to companies and businesses that have a financial year starting on 1 June 2023.
The Authority welcomes any feedback and suggestions during this phase to ensure continuous improvements of registration procedures and processes.
New UAE Rule- Mandatory Attestation required for Import Invoices more than Dh 10000
Date: 18 Jan, 2023
Dubai January 18, 2023:
Companies in the UAE will soon be required to attest import invoices with a value of Dh 10,000 and above, according to the UAE Ministry of Foreign Affairs and International Cooperation. The attestation cost of Dh 150 per commercial invoice will be applicable, and customers will have a grace period of 14 days after the declaration of goods to comply with the attestation. Failure to do so will result in a penalty of Dh 500 per invoice levied by the UAE Ministry of Foreign Affairs and International Cooperation (Mofaic) on the non-complying businesses.
According to a tweet issued by Mofaic — as per Cabinet Resolution No. 38 of 2022 regarding fees for certification of invoices and certificates of origin for imports into the UAE — this new rule will come into effect on February 1, 2023. This new regulation will apply to all goods imported into the UAE with a value of Dh 10,000 and above and the attestation of Invoices will be done electronically.
Contact our tax experts for more details.
ZATCA confirms Liquor will not be Sold at Duty-free Shops in KSA
Date: 16 Jan, 2023
External URL: https://saudigazette.com.sa/article/628664
Riyadh January 16, 2023:
Saudi Arabia’s Zakat, Tax, and Customs Authority (ZATCA) has confirmed that liquor will not be sold at the newly established duty-free markets in the Kingdom’s entry ports.
According to the rules for establishing duty-free markets, only goods and products that are permitted to be traded in the Kingdom will be allowed at the duty-free markets, ZATCA said.
The authority has set the customs rules, requirements and procedures for establishing duty-free markets at air, sea and land ports, in accordance with the unified customs law for the GCC countries, which includes the conditions related to the operation of duty-free markets. The authority stressed that the decision will contribute to supporting supply chains and improving logistical services provided to duty-free markets by providing a wide range of goods and products for travel shopping.
ZATCA Issues Tax Circular on VAT Treatment of Certain Supplies in the Financial Services Industry
Date: 15 Jan, 2023
Riyadh January 15, 2023:
The Zakat, Tax and Customs Authority (ZATCA) has issued a new circular to clarify the VAT laws and provisions concerned with certain supplies of services in the financial and their application in specific circumstances.
The circular provides information and guidance on the application of VAT rules in respect of two types of transactions that involve banks and financial institutions in KSA:
- Supplies of services by international banks established in KSA to non-resident customers.
- Incentives provided by credit card companies to banks in return for achieving operational targets.
The circular is based on the unified VAT agreement of the states of the Gulf Cooperation Council ( Unified VAT Agreement), Value Added Tax Law (VAT Law) and Value Added Tax implementing regulations as well as the general practice with respect to applicable rules.
Dubai: New Custom Duty Applicable on International Shopping exceeding AED 300
Date: 12 Jan, 2023
Dubai January 12, 2023:
Dubai has introduced new customs duty on goods bought internationally with a value of more than AED 300. This means that residents shopping internationally with a value of over AED 300 will have to pay a 5 percent import customs duty and 5 percent value-added tax (VAT).
“Customs duty rate has been set at five percent of the goods if their value exceeds AED 300, except where a rate of zero percent exemption applies according to the Unified Customs Tariff for the GCC States of 2022,” said Abdelhak Attalah, partner, maritime and international trade practice, Galadari Advocates and Legal Consultants.
Attalah further added that tobacco, tobacco products, e-cigarettes and vaping liquids are subject to a higher customs duty at the rate of 200 percent in addition to the sin tax which is applied also to sugary drinks.
ZATCA to Host 30 Specialized Workshops in February
Date: 11 Jan, 2023
Riyadh January 11, 2023:
Zakat, Tax and Customs Conference to be held in Riyadh on 8th – 9th February 2023 will feature more than 30 specialized workshops in the tax sectors. Those interested to attend can register for the conference by logging onto ztc.sa. A group of specialized experts will present on various topics in both Arabic and English.
The conference, organized by the Authority, comes under the slogan ‘An Integrated Digital System to Sustain the Economy and Enhance Security’ and is sponsored by the Minister of Finance, Chairman of the Board of Directors of the Zakat, Tax and Customs Authority, His Excellency Mr. Muhammad bin Abdullah Al-Jadaan. It aims to discuss the most important global and local experiences and developments in the zakat, tax and customs sectors, and the digital transformation witnessed by the system.
Through organizing workshops accompanying the conference, the authority aims to enhance the tax culture and raise the level of compliance and public awareness of taxpayers, importers and exporters and all relevant parties.
ZATCA urges Taxpayers subject to Selective Goods Tax to submit Returns by Jan 15, 2023
Date: 10 Jan, 2023
Riyadh January 10, 2023:
The Zakat, Tax and Customs Authority (ZATCA) has called on taxpayers from the business sector subject to selective goods tax to submit their tax returns for the past November and December, on January 15, 2023, at the latest.
The authority urged its taxpayers to quickly submit their declarations through the website ( zatca.gov.sa ) , in order to avoid a fine for failure to submit a declaration within the specified period at 5% of the value of the tax that should have been declared for every 30 days of delay in submitting the declaration.
The selective goods tax is one of the tax systems in force in the Kingdom, which is imposed on goods that have negative effects on public health or the environment in varying proportions, and includes soft drinks, energy drinks, sweetened drinks, tobacco and its derivatives.
Kuwait: KD 900M Collected in Taxes during Past 5 Years
Date: 04 Jan, 2023
Kuwait City January 4, 2023:
The Kuwaiti government collected about 900 million dinars in taxes from companies during the past five years, from April 2017 until the end of March 2022.
The total taxes were 787.6 million dinars, which came in the form of income tax from foreign companies and from Kuwaiti companies to support employment, zakat proceeds from Kuwaiti companies, and companies’ contributions to state services, in addition to about 110 million dinars from profits distribution and revenues for issuing tax certificates or others.
The data disclosed fiscal 2018/2019 witnessed the highest rate of collection of taxes on income, profits, and capital gains from companies and other projects, during which they collected 181.3 million dinars, in addition to a non-recurring rate of ‘dividend profits’ of about 109.94 million dinars, which is equivalent to the value of income tax from foreign companies for the same year bringing the total collection to 291.2 million dinars.
READ ALSO : No New New Taxes Eyed in Kuwait
KSA: ZATCA Implements the Integration Phase of E-invoicing
Date: 03 Jan, 2023
Riyadh January 3, 2023:
The Zakat, Tax, and Customs Authority (ZATCA) has begun applying the second phase of E-invoicing ‘Integration Phase’ since January 1, 2023, to the enterprises that were chosen within the first group which met the conditions necessary to complete this phase.
The Authority stated that the enterprises that began to connect their E-invoicing systems with the Fatoora platform were chosen based on the level of revenues subject to VAT for the year 2021 whose revenues exceed 3 billion Riyals.
ZATCA stressed that this phase aims to link and integrate the E-invoicing systems of taxpayers subject to the E-invoicing regulations with the Fatoora platform, as the Authority worked to notify the targeted enterprises to complete the procedures for applying the second phase of e-invoicing six months before the application.
In addition, the Authority claimed that the second phase has additional requirements, most notably connecting taxpayers’ electronic invoicing systems with the Authority’s system, issuing electronic invoices using a specific format, and including a number of additional elements in the invoice. The Authority is striving to impose this phase gradually and in groups, and it will directly inform the succeeding groups at least six months prior to the integration date.
Dubai Axes 30 Percent Tax on Alcohol Sales
Date: 02 Jan, 2023
Dubai January 2, 2023:
From January 1, 2023 Dubai has suspended a tax of 30 percent on alcoholic beverages as well as dropped the personal liquor licence fee that was previously mandated to buy alcohol in the commercial and tourism hub.
However, a valid Emirates ID, or Passport for tourists, will still be required to apply for the license. Added to that a person must be at least 21 to drink legally in the UAE, and alcohol can only be consumed privately or in licensed public places.
The move of slashing the tax is expected to further boost the appeal of Dubai to tourists and expats towards its more liberal lifestyle, compared to other Gulf states.
FTA releases User Manual on EMARATAX Tax Group Registration
Date: 01 Jan, 2023
Dubai January 1, 2023:
The United Arab Emirates (UAE) Federal Tax Authority (FTA) publishes a User Manual on ‘EMARATAX Tax Group Registration – Version 188.8.131.52’.
This manual is prepared to help VAT Tax Group representative members navigate through the FTA’s Emaratax website and create an account with the FTA. It also provides steps to submit a VAT Tax Group Registration Application. In addition, it offers you an understanding of the Login process, user types, forgot password and modify online user profile functionalities.
Note: The representative member must login into their EMARATAX account to initiate the VAT TAX Group Registration Application. Other Tax Group Members who are not a representative member will not be able to submit this application.
Click here to access the user manual.
ZATCA Determines the Criteria for Selecting the Taxpayers in Phase II of E-invoicing
Date: 28 Dec, 2022
Riyadh December 28, 2022:
Zakat, Tax and Customs Authority (ZATCA) determined the criteria for selecting the targeted taxpayers in the second wave for implementing the “Integration Phase” of E-invoicing. The authority clarified that the second wave includes all taxpayers whose revenues subject to VAT exceeded (half a billion Saudi riyals) in 2021. VAT-registered taxpayers meeting the criteria should integrate their E-invoicing solutions with the FATOORA Platform starting from July 1, 2023.
ZATCA has stated that Phase Two requires additional requirements, the most prominent is to integrate taxpayer’s E-invoicing solutions with (FATOORA) Platform, issue electronic invoices based on a specific format, and include additional fields in the invoice. Furthermore, the second phase of E-invoicing would be implemented in waves, and ZATCA would inform the next waves at least six months prior the integration date.
It is noteworthy that the implementation of the Integration Phase of the first wave will be on January 1, 2023, for the taxpayers whose selection criteria were announced last June, after such taxpayers completed the necessary requirements to complete this phase.
FTA urges Taxpayers to Benefit from Administrative Penalty Re-determination facility before December 31
Date: 23 Dec, 2022
External URL: bit.ly/3vBba3i
Dubai December 23, 2022:
The Federal Tax Authority (FTA) has called on registered taxpayers to benefit from the facility to re-determine administrative penalties on tax violations to be 30% of the total outstanding amount that were not paid before June 28, 2021
The FTA stressed that the facility has set a deadline i.e on or before December 31, 2022 and that taxpayers eligible to benefit from the decision must complete all related procedures through the EmaraTax portal to be able to benefit from the facility.
The Authority explained that after December 31, 2022, tax registrants who have outstanding penalties from before June 28, 2021 will not be eligible to avail of the re-determination facility and will be required to pay their fines in total, instead of just 30% of them, if the required conditions are met within the deadline set by the Cabinet Decision on Re-Determining Administrative Penalties on Tax Violations in the UAE.
KSA Extends Penalty Waiver for all Taxes until May 2023
Date: 19 Dec, 2022
Riyadh December 19, 2022:
The Zakat, Tax and Customs Authority (ZATCA) as part of its efforts to mitigate the effect of the coronavirus (COVID-19) pandemic again extended the amnesty initiative that waives penalties on all taxes for another 6 months, until the end of May 2023 (previously set to close 30 November 2022).
The authority pointed out that extending the initiative would enable taxpayers to benefit from the initiative and its goals, and alleviate economic burdens arising from the COVID-19 pandemic on businesses.
Highlights of the decision include:
- The extended tax amnesty covers the period from 1 December 2022 to 31 May 2023.
The amnesty initiative applies to fines and penalties relating to the following taxes:
- Value-added tax
- Withholding tax
- Excise tax
- Corporate income tax
- Real estate transaction tax
For any additional information with respect to this alert, please get in touch with our tax experts.
FTA launches Strategy to explore Future of Tax Sector
Date: 15 Dec, 2022
Dubai December 15, 2022:
The Federal Tax Authority (FTA) has launched its strategy to explore the future of the tax sector and strive for global leadership. The strategy is built on a thorough assessment and follows comprehensive plans developed to map out the future of the UAE tax system, in line with international best practices.
The Authority explained that launching the strategy formed part of its activities to mark World Future Day 2022 which began last week.
FTA Director General His Excellency Khalid Ali Al Bustani said: “The Federal Tax Authority’s strategy for exploring the future of the tax sector primarily aims to identify the basic motives, scenarios, and proactive measures required for sustainably upgrading tax procedures in the UAE, and promoting a culture of future-mapping within, paving the way for it to become a world leader in the field.”
“Over the past few days, the Authority organised a series of events to mark World Future Day, including an awareness seminar on the methods and tools of forecasting the future, which highlighted the importance of the FTA’s participation in celebrating World Future Day, and showcased various effective future-planning mechanisms, with detailed steps and frameworks,” H.E. added.
UAE Issues Federal Decree-Law on 9% Corporate Tax for 2023
Date: 09 Dec, 2022
Dubai December 9, 2022:
The UAE has issued Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses (The Corporate Tax Law). This means businesses will be subject to UAE Corporate Tax from the beginning of their first financial year which starts on or after June 1, 2023.
The UAE’s Corporate Tax regime will levy a standard rate of 9% for taxable profits exceeding AED 375,000. Profits up to and including that threshold will be taxed at a 0% rate to support small businesses and start-ups.
The Ministry of Finance (MoF) confirmed the Federal Decree-Law on Taxation of Corporations and Businesses is an important milestone in building an integrated tax regime that supports the strategic objectives of the UAE and enhances its global economic competitiveness, as well as provides the national economy with sufficient flexibility to deal with and support international financial systems within the framework of the UAE’s established partnerships.View the MoF’s newly released Frequently Asked Questions that supplement your queries.
UAE VAT Law: Changes in Gold and Diamond sector Announced
Date: 08 Dec, 2022
Dubai December 8, 2022:
The Ministry of Finance (MoF) announced changes to the VAT rules for gold and diamond suppliers. The amendment comes as part of a resolution issued by the cabinet on workmanship services when supplying gold and diamonds between registrants.
According to the resolution, there will be a temporary replacement for the definition of “goods” contained in Article (1) of Cabinet Decision No. (25) of 2018 on the Mechanism of Applying VAT on Gold and Diamonds between Registrants in the State to be gold, diamonds and any products whose main component is gold or diamonds, which may include workmanship services directly related to the supply of these commodities”.
This amendment will be applied for the period from June 1, 2018, to December 31, 2022, noting that the term provided in the aforementioned Cabinet Decision No. (25) of 2018 (goods) will be re-applied starting from January 1, 2023.
Join now! FTA holds Webinars Series in December to Orient Users towards EmaraTax
Date: 06 Dec, 2022
Dubai December 6, 2022:
To orient tax payers towards the new payment portal EmaraTax, FTA has released a recorded webinar in English. An Arabic recording of the webinar will be made available soon.
In order to gain an in-depth overview on FTA’s EmaraTax click here to view the webinar (on YouTube).
During this month, FTA will also be running a series of online orientation sessions for EmaraTax users. There will be two sessions per day:
• 10 – 11 am providing you an opportunity to raise specific questions about using EmaraTax;
• 3 – 4 pm focusing on specific aspects of EmaraTax, in particular password reset, returns submission and payments.
Please join any session that is of interest to you and you can access the webinars via WebEx. We recommend that you download WebEx in advance to avoid any possible delays when joining your chosen session. The live webinars are currently conducted in English as per the schedule.
FTA releases Guide on Password Reset Process to login to EmaraTax
Date: 05 Dec, 2022
Dubai Dec 5, 2022:
This is to update you that FTA has released detailed guidelines on resetting of password to login to EmaraTax portal. The document contains a step-by-step guide to resetting your password and briefs you the corresponding steps and scenarios bound to occur.
Kindly click here to view the document for your reference. We hope you will find it useful.
Please feel free to reach out to us on WhatsApp in case of any clarifications.
FTA to Launch EmaraTax on December 5, 2022
Date: 24 Nov, 2022
Dubai November 24, 2022:
Here’s an important notice from FTA that is all set to launch EmaraTax on December 5 2022.
EmaraTax significantly enhances taxpayer access to the FTA’s services, payment of taxes and obtaining refunds. The new platform also enhances the ability of the FTA to administer taxes in the UAE and enables better, faster decision-making and earlier engagement with taxpayers that need support.
The new online platform is part of the UAE’s Digital Government Strategy 2025 to leverage emerging technologies and build a digital infrastructure that serves the people and business community.
Click here to get more details about the new platform that includes guidance videos, FAQs and links to online orientation sessions.
NBR releases Updated VAT Registration Guide
Date: 22 Nov, 2022
Dubai November 22, 2022:
The National Bureau for Revenue (NBR) releases a VAT Registration Guide (Updated in October 2022). The document provides guidance on registering for VAT in the Kingdom of Bahrain (Bahrain).
For your information, VAT was introduced in Bahrain since January 1, 2019 with a standard rate of VAT of 5 %. With effect from 1 January 2022, the standard rate of VAT was revised to 10 %. See the VAT Rate Change Transitional Provisions Guide on NBR’s website for an explanation of the transitional rules relevant to the change in rate.
The guide is intended to provide general information only, and contains the current views of the National Bureau for Revenue (NBR) on its subject matter. The document serves as a guideline only and is not a substitute for obtaining competent legal advice from a qualified professional. The main principles of the VAT system in the Kingdom of Bahrain are set out in the VAT General Guide issued by the NBR which is available on it’s website.
UAE announces VAT Exemption for Board Members from January 1, 2023
Date: 18 Nov, 2022
Dubai November 18, 2022:
Supply of services for people serving as board members will not be subject to value-added tax from next year, the Ministry of Finance said on November 17, 2022.
The ministry added that before the new legislative amendment is implemented, tasks performed by board members – natural and legal persons alike – are treated as taxable services subject to VAT, on the condition that the member provides them on a regular, continuous, and independent basis, and if the total value of these taxable supplies/services and import transactions, exceeds the mandatory tax registration threshold.
Saudi Arabia to Begin e-invoicing Phase II from January 2023
Date: 16 Nov, 2022
External URL: https://www.arabnews.com/node/1980221/business-economy
Riyadh November 16, 2022:
Having only introduced VAT on 1 January 2018, Saudi Arabia is leading the way in digitizing its tax invoices. The Zakat, Tax and Customs Authority (ZATCA) has given January 1, 2023 as the go-live date of the second phase.
Phase I consisted of ensuring that there is a technical e-invoicing solution compatible with the relevant requirements. This puts an end to handwritten invoices or invoices written through text editors. A fine of SR 5,000 will be applied for not issuing and saving the invoices electronically.
Phase II of e-invoicing will be implemented in a phased manner from January 2023, to establish integration between e-systems of taxpayers and the authority’s regulations. In addition to other requirements, Phase II introduces integration with ZATCA platform for continuous transaction controls requiring taxpayers to clear invoices ahead of transmission to buyers. The fine for omitting the QR Code and not reporting any malfunction in the issuing of the e-invoice to the authority starts with a warning. The fine for violating the deletion or modification of e-invoice starts from SR 10,000.
FTA emails Awareness Information on Excise Tax Registration
Date: 15 Nov, 2022
Dubai November 15, 2022:
As part of Muwafaq initiatives, the Federal Tax Authority (FTA) will send weekly Awareness Materials to taxpayers such as informative guides, and updates. The Authority is committed to ensuring full and voluntary compliance with tax regulations among all business sectors, and keep all registrants abreast with the obligations under the UAE tax laws.
With regards to this, the FTA has sent an emailer on the requirements, processes and conditions for ‘Excise Tax Registration‘ in the region. The application takes hardly about 45 minutes to complete, and can be submitted 24/7 on their official website.
Click here to view the file.
UAE: Get Ready, EmaraTax set to Go Live on December 5
Date: 14 Nov, 2022
Dubai November 14, 2022:
EmaraTax, FTA’s new enhanced tax platform, is going live on December 5, 2022. The migration to EmaraTax will commence from November 30, 2022 and will be available for use on 5 December. The migration is planned in such a way so as to minimize disruption to taxpayers and coincides with the National Day holidays well in advance of the usual tax return submission and payment dates.
Emaratax is a new tax platform designed to provide a better experience for taxpayers to manage their tax obligations. The smart app will also enhance taxpayer’s ability to administer taxes, enable better, faster decision-making and foster earlier engagement with those requiring support.
Log onto eservices.tax.gov.ae to access the FTA’s online services. This web address will remain unchanged even after the transition to EmaraTax. A dedicated microsite has been launched containing important information about EmaraTax and is intended to help taxpayers prepare for the new platform. From November 7, 2022 to November 18, 2022 the FTA will host virtual awareness sessions for taxpayers regarding the new EmaraTax portal to help them navigate the new system easily.
Click here to get more details about the new platform that includes guidance videos, FAQs and links to online orientation sessions. Stay tuned for more updates and content addition over time.
Bahrain: NBR releases FAQS on Digital Tax Stamps
Date: 12 Nov, 2022
External URL: https://www.nbr.gov.bh/excise_faqs/4
Manama November 12, 2022:
Following UAE Federal Tax Authority’s footsteps, Bahrain’s National Bureau for Revenue announced the introduction of Digital Tax Stamps on Excise Goods starting from July 17, 2022 (extended from May 15, 2022) for imported Cigarettes, and retailed Cigarettes starting October 16, 2022 (extended from August 14, 2022)
The digital tax stamp system is a regulatory system that aims to track excise goods from the manufacturing stage to the goods being put into the local market for sale/consumption. Under this system, a dedicated digital stamp containing security features and codes is placed in order to prevent the circulation of non-original excise goods in the region.
Click here to read the FAQS.
FTA issues VAT guide on refund of VAT for Construction and Operation of Mosques
Date: 11 Nov, 2022
Dubai November 11, 2022:
Federal Tax Authority (FTA) has recently issued a VAT guide on ‘Refund of VAT Incurred on the Construction and Operation of Mosques’. The VAT guide explains the requirements and process for recovering input VAT incurred on construction and operation of mosques and this document should be read by persons constructing and/or operating/maintaining a mosque in the UAE.
Click here to view the VAT guide.
Federal Tax Authority granted ISO 22301 for Business Continuity Management
Date: 10 Nov, 2022
Dubai November 10, 2022:
The Federal Tax Authority (FTA) has enhanced its holistic quality scheme designed to bring its operating systems and services in line with the highest international quality standards, thus earning the ISO 22301 certificate.
The FTA secured the ISO certificate for Business Continuity Management for its Business Continuity and Crisis Recovery System, after updating all of its practices and procedures in the sector. The independent assessment and audit team reviewed compliance with requirements to meet the ISO 22301 standard, as well as internal protocols and documented procedures that have been implemented.
The Authority underlined the continuous growth in the number of FTA employees who obtained international accreditation certificates related to the international standard for business continuity, which is now 74 employees compared to just 49 last year. This marks a 51% increase in 2022, highlighting the FTA’s commitment to developing its human capital in accordance with the highest international standards. The Authority strives to continuously upgrade its services to meet customers’ needs, save time, cut costs, and boost efficiency in resource management, in addition to motivating employees to integrate into the work environment.
FTA Director General His Excellency Khalid Ali Al Bustani said, “The new certification we have earned reaffirms confidence in the Federal Tax Authority’s systems, as well as in its efficiency and ability to face challenges and maintain business continuity. The ISO 22301 for Business Continuity Management reflects the Authority’s commitment and excellence in implementing technological systems and hiring the right talent, capable of ensuring continuity in our service provision, while maintaining the highest levels of quality and safety.”
FTA releases Key Amendments to the UAE VAT Law
Date: 09 Nov, 2022
Dubai November 9, 2022:
We wish to inform you that the United Arab Emirates (UAE) Federal Tax Authority (FTA) has published notable amendments to the Federal VAT Decree-Law No. 8 of 2017 (UAE VAT Law). This is the first update to the UAE VAT Law ever since its introduction in 2017. The amendments will go into effect from January 1, 2023.
In this piece, we have outlined an overview of the key changes to the UAE VAT Law. We recommend taxpayers in the UAE to closely study all the amendments to the UAE VAT law. This is in order to determine if your current tax processes require changes to comply with the new regulations.
Oman to Introduce Income Tax on High Earners
Date: 08 Nov, 2022
Muscat November 8, 2022:
After two years of contemplation, the Gulf state of Oman is on the cusp of introducing income tax in the region. A draft law to levy income tax on high earners was passed on November 6, 2022 by the country’s Shura Council. Subject to approval from the Council of Ministers and a final endorsement from Sultan Haitham, the tax will then become law.
“Income tax is on track. We expect personal income tax to go live by late 2023 or in 2024 provided that it receives all approvals including the royal decree.” a source revealed on the condition of anonymity.
Oman is more likely to bring personal income tax in the range of 5-9%, which is not yet confirmed. The buzz on income tax draft law has evoked mixed reactions from citizens in different salary brackets. Most feel a percentage cut of 3-5% will be okay and anything above that can hit their income. Middle-income earners were also concerned that if the new law is approved what would it mean for them in the long run. However experts opine that such a levy would be a good idea overall for the country’s finances.
Oman: Amendments to Executive Regulations of the Excise Tax Law
Date: 04 Nov, 2022
Muscat November 4, 2022:
In October 2022, the Oman Tax Authority (OTA) issued Ministerial Decision No. 456/2022 (MD 456/ 2022) amending certain provisions of the Executive Regulations of the Excise Tax Law issued under MD 53/ 2021. The amendments have gone into effect from 17 October 2022.
The amendments are currently available only in Arabic and can be downloaded from here.
ZATCA issues Guideline on Control of Fees for Storage at Land Customs Ports
Date: 03 Nov, 2022
External URL: https://uqn.gov.sa/?p=18306
Riyadh November 3, 2022:
ZATCA recently issued a guideline on the ‘Controls of fees for storing goods at land customs ports’. The guideline is in accordance with the unified customs regulations of the GCC.
Click here to read the full guideline.
Bahrain: NBR updates Excise Goods List
Date: 02 Nov, 2022
Manama November 2, 2022:
The National Bureau for Revenue (NBR) has recently announced the updation of their excise goods list available on the NBR portal.
Click here to view the new excise goods list.
UAE Ministry of Finance Amends some Provisions of VAT law
Date: 31 Oct, 2022
Dubai October 31, 2022:
The UAE Ministry of Finance has amended certain provisions to the value added tax (VAT) laws (Federal Decree-Law No. 8 of 2017 on Value Added Tax (VAT)), which will go into effect from January 1, 2023. The amendments made are in line with international best practices, based on experiences, challenges faced by various business sectors as well as recommendations received from relevant parties.
Some of the major changes to the existing VAT rule introduced by Federal Decree-Law No 18 of 2022 are as follows:
- Registered persons who make taxable supplies are allowed to apply for an exception from VAT registration if all of their supplies are zero-rated or if they no longer make any supplies other than zero-rated supplies.
- Setting a 14-day period to issue a tax credit note to settle output tax, in line with the time frame set for issuing tax invoices.
- The FTA may forcibly deregister registered persons in specific cases if deemed necessary.
Want to further know the Key Amendments to the UAE VAT Law in detail, then click here to read the full article.
FTA: New Payment Platform 'Magnati' announced for Tax Liabilities
Date: 30 Oct, 2022
Dubai October 30, 2022:
The Federal Tax Authority (FTA) announced that it will be discontinuing the use of the eDirham system in paying taxes from October 30, 2022 and replacing it with Magnati, the smart payment option from First Abu Dhabi Bank (FAB).
Magnati provides advanced software solutions for online payments, using next-generation advanced technologies to provide a seamless and efficient payment service for FTA customers. The FTA explained that the new smart payments feature will allow registrants to pay their tax obligations via FAB’s platform, in addition to enabling taxpayers to settle any payment due using credit cards.
OTA issues Document on Tax Stamps
Date: 25 Oct, 2022
Muscat October 25, 2022:
Starting from September 19, 2022, importers and local manufacturers will be able to request the digital tax stamps which will be sent to manufactures to put on molasses and other tobacco products.
Click here to view the document elaborating on the essentials of the Tax Stamp Scheme in Oman (Note: File in Arabic).
FTA: Positive Indicators marking the Success of 5th year of Excise Tax in UAE
Date: 24 Oct, 2022
UAE October 24, 2022:
The Federal Tax Authority (FTA) asserted that the implementation of Excise Tax has been a great success in all aspects. Whether in relation to the implementation mechanisms developed as per international best practices, or in relation to encouraging cooperation from sectors of taxable businesses, the indicators have revealed positive results. Thus demonstrating that the roll-out of Excise Tax in the region has achieved its intended objectives.
The review was part of a press statement the Authority issued to mark the five-year anniversary of the implementation of Excise Tax, which went into effect in the UAE since October 1, 2017. Primarily applied to carbonated beverages at a rate of 50%, tobacco products and energy drinks at 100%, the scope of Excise Goods was later expanded to include sweetened drinks as of December 1, 2019, that were subject to a rate of 50%, and electronic smoking devices, tools along with the liquids used within were subject to a rate of 100%.
- The FTA revealed that the total number of Excise Tax registrants grew continuously from 309 by the end of 2017 to 430 by the end of 2018, at a growth rate of 39.16%.
- The total increased by 60.47% to 690 registrants by the end of 2019, and subsequently by 45.36% to hit 1,003 registrants by the end of 2020, and by another 22.33% to reach 1,227 registrants by the end of 2021.
- An additional growth rate of 19.72% was recorded in the first nine months of the current year, where the total number of registrants reached 1,469 by the end of September 2022.
- Overall, this marks a cumulative growth of 375.41% between the end of 2017 and the end of September 2022.
ZATCA issues Fatoora Portal User Manual – Version 2
Date: 22 Oct, 2022
Riyadh October 22, 2022:
ZATCA has issued a user guideline for the Fatoora platform to implement the second phase of the electronic invoice – the integration phase.
This user manual contains the steps of using the portal to onboard and integrate the e-invoicing solutions and has been prepared for educational and awareness purposes.
View the Fatoora Portal User Manual- Ver 2.
ZATCA: Items Worth over SAR 60,000 to be Disclosed during Travel
Date: 18 Oct, 2022
Riyadh October 18, 2022:
The Zakat, Tax and Customs Authority (ZATCA) stated that every traveller arriving or departing from the Kingdom of Saudi Arabia must disclose if they are carrying in their luggage a sum of or items amounting to 60,000 Saudi Arabian Riyals (SAR) or more.
Travelers must disclose the items and fill out the declaration form and submit it electronically via the application or through ZATCA’s website.
The items that may have a value of more than 60,000 SAR include:
- Monetary instruments
- Gold bars
- Precious metals
- Precious stones
- Fine jewellery
- Equivalent in foreign currencies
ZATCA said that the declaration is a mandatory requirement to protect the traveler from being charged with the crime of money laundering, smuggling, or evading the payment of legal fees and taxes.
For more information, click the link: https://e-services.zatca.gov.sa/en/declare
NBR: October 16 marks Application of Last Phase of DTS in Bahrain
Date: 12 Oct, 2022
External URL: https://www.nbr.gov.bh/releases/144
Manama October 12, 2022:
The National Revenue Authority (NBR) confirmed that October 16, 2022 marks the last phase of application of the distinctive mark system (digital stamps) on cigarette products. The decision was implemented based on decision No. 3 of 2022 of the CEO of the National Revenue Authority, where all cigarette products available for sale must be mandatorily marked with digital tags for trading, sourcing, or holding in local markets.
The agency called on all importers and traders in the local markets to deal in appropriate quantities and avoid storing large quantities of cigarettes that do not bear digital stamps. This was in order to clear the stock before the last stage and prepare for the ban of sale, circulation, possession or supply of cigarettes without stamps.
It is worth noting that the digital stamp system aims to track the movement of selective excise related goods from the manufacturing stage to the point of sale for consumption. The system helps combat the smuggling of goods and illegal trade and also helps protect consumers from poor quality and counterfeit products alike, while ensuring effective collection of tax proceeds by the government.
FTA to launch a New Integrated Platform—EmaraTax
Date: 11 Oct, 2022
Dubai October 11, 2022:
FTA announced that a new platform will be launched in November this year following an extensive period of assessment, consultation and development. EmaraTax represents a major milestone in the FTA’s ambition to be a leading digitalised tax administration system in full recognition of the UAE’s national digital agenda.
EmaraTax will significantly enhance the way taxpayers access the services of FTA, pay their taxes and obtain refunds. The new platform also greatly enhances the ability to administer taxes in the UAE, enables better, faster decision-making and earlier engagement with taxpayers in need of support.
Offering online access to a larger number of services, a simplified and streamlined user experience and extensive self-help options, EmaraTax offers a range of significant enhancements. Individual taxpayers, tax agents, legal representatives, foreign missions and diplomats, customs bodies and verification agencies will all benefit from the range of developments.
The new platform is a modern tax administration ecosystem that integrates with other influential government entities such as the UAE Central Bank and national technology-based programs including UAE PASS to make best use of common data and simplify the range of user processes from logging-in to compiling tax returns. Importantly EmaraTax is mobile-ready and the App will be launched shortly after the new platform goes live in November 2022.
FTA publishes a a Cabinet Decision on Charities
Date: 07 Oct, 2022
Dubai October 7, 2022:
The UAE tax authorities have issued Cabinet Decision No.55 of 2017 on Charities That May Recover Input Tax.
The decision, which has retrospective effect from 1 January 2018, confirms that certain charities (as specified in the list) will be able to recover all the input tax paid by them. This comes with exception of tax excluded from recovery by virtue of UAE’s executive regulations on VAT and tax paid for goods and services used for making exempt supplies.
The file contains the list of charities in both English and Arabic.
FTA showcases latest Digital Initiatives at GITEX 2022
Date: 06 Oct, 2022
Dubai October 6, 2022:
The Federal Tax Authority (FTA) showcased its latest digital initiatives at GITEX Global Exhibition at the Dubai World Trade Centre. More than 5,000 companies from over 90 countries participated in the event.
The Authority revealed that its participation at GITEX highlights its latest digital initiatives, launched as part of the continuous development plans to match the best standards. The initiatives are in line with UAE’s Digital Government Strategy, designed to drive the smart transformation of all services, and introduce seamless and proactive digital services. The objective is to provide innovative models that embody the leadership and excellence of the government systems, and strengthen efforts to meet taxpayers’ aspirations and process their transactions quickly.
FTA Director General His Excellency Khalid Ali Al Bustani said “Through its participation at GITEX, the world’s largest tech event, the FTA aims to achieve two main objectives. The first is to introduce the FTA’s experts to the latest technologies and smart digital systems in the field of tax administration, which can be built upon to ensure the modernisation of the FTA’s services. This in turn, supports our efforts to fulfil the directives of our wise leadership and make the UAE one of the best countries in the world.”
OTA releases Manual Guide on Updating Taxpayers Data
Date: 04 Oct, 2022
External URL: https://bit.ly/3yd10rx
Muscat October 4, 2022:
Oman Tax Authority has made an announcement urging taxpayers to update their communication data of their institutions when they access to the Tax Authority’s electronic portal.
In a statement the Tax Authority said “Taxpayers should update the communication data of their institutions when they access to the Tax Authority’s portal www.taxoman.gov.om. We appreciate your cooperation to update this data that will allow you to access the electronic services provided by the Tax Authority in the future.”
In regards to this, the Authority has also issued a step by step guide outlining the process for updating contact details.
Click here to view the guide.
OTA activates Digital Tax Stamps in Oman
Date: 02 Oct, 2022
Muscat October 2, 2022:
Starting from September 19,2022, importers and local manufacturers in Oman can request the digital tax stamps which will be sent to manufactures to put on molasses and other tobacco products.
Ahead of the rollout of the second phase of its Digital Tax Stamp initiative on October 14, 2022, Oman Tax Authority has urged importers of tobacco products and spirits to obtain excise tax stamps to be supplied to their overseas principals for affixing on their goods before they are shipped into the country.
The scheme, which came into effect on June 30, 2022, aims to strengthen regulation of trade and sale of excisable products and optimize the collection of tax levied on such goods. The digital tags will also help clamp down any illegal imports of excise goods in the country.
ZATCA releases VAT Guidelines for Electronic Contracts
Date: 26 Sep, 2022
Riyadh September 26, 2022:
ZATCA releases VAT Guidelines for Electronic Contracts. The guideline is addressed to all natural and legal persons who carry on economic activity and who are subject to VAT. The purpose of this guideline is to provide more clarifications regarding VAT consequences on electronic contracts entered into between a supplier and a customer. View the Guide in Arabic.
For further advice on specific transaction, you can approach the Authority on its website which contains a host of tools and visual guidance materials.
FTA announces 100 percent Digital VAT Refund Scheme for Tourists
Date: 25 Sep, 2022
Dubai September 25, 2022:
The UAE’s Tax Authority (FTA), in partnership with Planet Tax Free, launched the world’s most innovative and 100% digital VAT-refund scheme for tourists. The paperless procedure is considered the most advanced solution of its kind in the world and is a reflection of the government’s continuous adoption of proactive solutions based on the concept of proactive government work, to meets the requirements of the future and positively reflect on customers.
The announcement was made at a joint press conference in the presence of H.E. Khalid Ali Al Bustani, Director General of the UAE Federal Tax Authority and Eyad Al-Kourdi, General Manager of Planet Tax Free, the operator of the tax refund system for tourists in the UAE.
The integrated system was demonstrated at the press conference, showcasing the strength of using electronic invoices issued at the point of sale registered within the authority’s system, instead of traditional paper invoices. The new solution is integrated electronically between retail outlets and the tax refund scheme, ensuring a seamless digital process of issuing, sending, modifying and saving invoices for tourists.
ZATCAs 2 hours Customs Clearance Initiative continues its efforts
Date: 20 Sep, 2022
Riyadh September 20, 2022:
The Zakat, Tax and Customs Authority (ZATCA) has concluded making all the necessary preparations to expand the application of the customs clearance initiative within the two hours specified by the noble royal order and has worked on this in collaboration with 26 government agencies that serve as customs clearance agencies.
The Authority is expanding the implementation of the initiative in order to further the clearance system’s efforts to facilitate cross-border trade in line with the goals of the Kingdom’s Vision 2030 to become a global platform for logistics service.
According to the Authority, importers’ can utilize the feature of pre-submitting the documents needed for importation 72 hours before the consignment arrives at the port, in addition to meeting all clearance requirements from the relevant authorities, and contribute to the accomplishments made during the final stage of the clearance system.
In this regard, the Authority, through its integrated work with the National Competitiveness Center and in continuous cooperation with the clearing authorities, has achieved a tangible development at the level of customs clearance procedures within the framework of its strategy that meets the requirements of the Kingdom’s vision 2030 to be a pioneer in customs work at the regional and global level, fostering national competitiveness and enhancing national competitiveness.
FTA holds 3 Youth Circles on Tax Culture to support SMEs
Date: 16 Sep, 2022
Dubai September 16, 2022:
The Federal Tax Authority (FTA) Youth Council, in cooperation with the Federal Youth Authority (FYA), held three youth circles on Tax Culture to Support Small and Medium Enterprises(SMEs) as part of the Council’s initiatives to raise tax awareness and facilitate tax compliance through direct engagement with youth business.
More than 100 representatives of SMEs participated in the discussions in Abu Dhabi, Dubai and Ajman. The sessions were attended by FTA Director General, His Excellency Khalid Ali Al Bustani, FYA Director General, Saeed Al Nazari, Abu Dhabi Department of Economic Development (ADDED) Undersecretary, Rashid Al Baloosh and the Mohammed bin Rashid Establishment for Small and Medium Enterprise Development Executive Vice President, Saeed Al Marri, alongside a number of federal and local authority officials.
The youth circles dealt with a set of aspects that include the services provided by the authority, its future directions to enhance youth tax culture in the SME sector and the prominent challenges young people face at SMEs and ways to overcome them.
FTA publishes a Guide on 'Excise Stock Movement For Warehouse Keepers not Registered for Excise Tax'
Date: 15 Sep, 2022
Dubai September 15, 2022:
A Public Clarification was published on August 2022 by the FTA on ‘Excise Stock Movement Guide For Warehouse Keepers who are not Registered for Excise Tax’.
This guide helps Warehouse Keepers (WHK) understand their responsibilities of holding a warehouse in a Designated Zone (DZ) in the UAE and navigate the e-Services portal from a systems perspective. It further throws lights on the following aspects:
- The process of declaring Excise Goods that belong to Excise taxpayers that are held in the Designated Zone beginning January, 2021.
- Assist in understanding the Excise Tax compliance obligations that Warehouse Keepers have to comply with.
- An overview of the declaration forms that need to be filed by the Warehouse Keeper of Designated Zones in the UAE holding stock of Excise taxpayers and explanation of the icons and symbols included in the forms.
The sections of the guide offer a detailed explanation about the declaration forms and who, how and when a Warehouse Keeper should complete and submit them to the FTA.
FTA announces World’s First Paperless Tax Refund experience for Tourists
Date: 14 Sep, 2022
Dubai September 14, 2022:
The UAE’s Federal Tax Authority (FTA) announced the world’s first paperless tax refund scheme for tourists.
Khalid Ali Al Bustani, Director General of FTA, said the system has been linked with the retailers hence all the receipts will be generated electronically and tourists will not have to carry paper receipts of their purchases for claiming VAT refunds. UAE is the first country in the world to achieve this milestone.
The tourists need to spend a minimum of AED 250 to claim a VAT refund. In addition, there are a number of kiosks placed at various locations in the country for tourists to claim a refund.
FTA to implement Muwafaq Priviledge Package for Facilitating SMEs
Date: 13 Sep, 2022
Dubai September 13, 2022:
In line with the development goals set by the UAE to support small and medium enterprises, which represent the backbone of the national economy, the Federal Tax Authority (FTA) has begun designing and implementing Muwafaq Privilege Package which aims to provide innovative tax solutions to facilitate transactions for SMEs with speed, ease and accuracy.
The highlights of the Muwafaq package include:
- Acceleration of tax registration procedure.
- Preparing and offering low cost tax accounting programs to ease financial burdens of SMEs.
- Prioritization of SME procedure requests to facilitate ease of access to FTA services.
- Cooperation with service providers to offer certain taxpayers support services for SMEs.
FTA resumes Tax Clinic initiative in Ras Al Khaimah and Sharjah
Date: 12 Sep, 2022
External URL: https://bit.ly/3eLtz8o
Dubai September 12, 2022:
The Tax Clinic initiative organised by the Federal Tax Authority (FTA) resumed its field activities across the emirates with sessions in Ras Al Khaimah and Sharjah. The sessions were designed to raise tax awareness and enhance tax compliance , while establishing and maintaining direct communication with business sectors,.
Two rounds of sessions were held last month under the campaign. The first of which was held over three days from 16 to 18 August at Tasheel Enjaz – Alrams Centre in Ras Al Khaimah, while the second round took place at the Tasheel-Al Thiqah Multi-Services Centre in Mleiha in the Emirate of Sharjah from 23 to 25 August.
The Tax Clinic initiative was launched way back in August 2018 in all seven emirates to raise tax awareness, assist taxpayers in overcoming any obstacles they face and ensure self-compliance. FTA representatives present across all locations answer questions about registration, how to file tax returns and pay tax-related obligations. FTA organized these remote awareness sessions under the Tax Clinic initiative for more than two years, bringing together hundreds of business sector representatives and tax system stakeholders.
FTA Director General His Excellency Khalid Ali Al Bustani said “The Federal tax Authority organizes the Tax Clinic campaign in collaboration with Departments of Economic Development and municipalities across all seven emirates, under the framework the FTA established for coordinating with its strategic partners in the public and private sectors providing top-quality services and ensuring the successful implementation of tax legislation.”
Dubai Customs Authority Bans Export of Iron Scrap & Wastepaper till Sep 30
Date: 11 Sep, 2022
Dubai September 11, 2022:
The Dubai Customs Authority published customs notice 07/2022 announcing a temporary ban on the export and re-export of iron (ferrous) scrap and paper waste. The customs notice states that the temporary ban on iron scrap and waste paper exports has been extended until September 30, 2022.
The UAE had issued a similar notice in 2020 which said that the ban is effective from May 15, 2020 for a period of four months ending 1September 15, 2020. This was in regards to strengthen the country’s domestic demand.
VAT of a Car Exported from Saudi Arabia cannot be Refunded
Date: 10 Sep, 2022
Riyadh September 10, 2022:
Zakat, Tax and Customs Authority (ZATCA) clarified that it’s not possible to refund the paid value-added tax (VAT) on a car that has been exported from the Kingdom of Saudi Arabia. This clarification came while responding to an inquiry from a Saudi citizen asking about the possibility to receive VAT refund after he purchased a car, then exported it from the Kingdom.
He was asked to get a VAT refund in Saudi Arabia after he paid another new VAT in the country to which he exported the car to.
It stated that all the services and commodities are subjected to the VAT with a percentage of 15 percent if it has been provided by the establishment or by an activity or business owner registered in the VAT system.
OTA organizes Workshops on VAT and CIT
Date: 09 Sep, 2022
Musact September 9, 2022:
The tax authority, in coordination with the General Authority for Economic and Free Zones, organized two workshops on value-added tax and corporate income tax in the Salalah Free Zone, in the presence of several officials and employees of the authority, the industrial city of Raysut (Mada’in), the free zones of Salalah and Mazyona, the office of the governor of Dhofar and investors in the industrial zones.
The first workshop presented by Saeed bin Ahmed Al-Shanfari, Director-General of the Second General Directorate of Taxation, addressed several themes. The most important one was on Value Added Tax Act imposed on all supplies of goods and services in Oman unless exempted or submitted at zero percent. Other topics discussed were VAT mechanism, types of supplies, tax rates and tax-exempt supplies.
Participants were also introduced to VAT returns filing mechanism, annual revenue components, tax collections and services provided by the Tax Authority through its website.
The workshops were attended by a large number of employees and investors in the industrial zones, who widely interacted by asking questions to the tax specialists who in turn provided all the necessary clarifications about the tax.
Bahrain: National Revenue Authority prepares for Implementation of Digital Stamps
Date: 07 Sep, 2022
External URL: https://www.nbr.gov.bh/releases/142
Manama September 7, 2022:
The National Revenue Authority confirmed that as of October 16, 2022, the distinctive mark system of Digital Stamps will be applied to cigarette products in the country. This decision is implemented in line with the directives of the CEO of the National Revenue Authority, where all cigarette products available for sale must be marked with the stamp for trading in the local market.
The Authority called on all importers and traders in the region to deal in appropriate quantities and not to store large quantities of cigarettes that do not bear digital stamps, so that the stock will be cleared before October 16, 2022.
This directive will help them prepare for the ban on the sale, circulation, possession and supply of cigarettes that do not bear stamps. After the commencement of the digitization phase, any product in the supply chain that isn’t digitally stamped will have to be either destroyed or moved outside the territory of the Kingdom to avoid issues with the law for non-adherence. Penalties can range from administrative fines to cases for Public Prosecution.
ZATCA signs MOU with Hungarian National Tax and Customs Authority
Date: 05 Sep, 2022
Riyadh September 5, 2022:
The Zakat, Tax and Customs Authority (ZATCA) signed a Memorandum of Understanding (MOU) on tax administration with the Hungarian National Tax and Customs Authority. The MOU was signed by His Excellency the Governor of ZATCA, Eng. Suhail bin Muhammad Abanmi and Mr. Ferenc Fagogeli, Minister of State at the Ministry of Finance and Commissioner of the National Tax and Customs Authority of the Republic of Hungary.
The memorandum includes a general framework for cooperation in the field of tax administration between the two countries. It also discusses ways for cooperation in a number of fields notably in digital solutions, and review of experiences of both sides in tax applications.
This memorandum comes within the framework of the Authority’s endeavor to strengthen its strategic relations at the international level for upgrading tax system and its services.
UAE and Kuwait Sign Double Tax Treaty
Date: 04 Sep, 2022
External URL: https://twitter.com/MOFKW/status/1564542419823198208
Kuwait City September 4, 2022:
Kuwait and the United Arab Emirates (UAE) have recently signed a treaty for the avoidance of double taxation, as announced by the the Kuwait Ministry of Finance on Twitter.
This is the first tax treaty that Kuwait has signed with a Gulf Cooperation Council member state. The objectives of the tax treaty are to expedite cooperation in tax matters, strengthen ties between the two countries and unite the economic and investment partnerships in the region.
This move is in line with the efforts of both countries to grow commercial trading, boost investment opportunities, enhance development goals and also provide full protection of goods and services exchanged in both the countries.
Bahrain: The National Bureau of Revenue (NBR) updates list of Excise Goods
Date: 02 Sep, 2022
Manama September 2, 2022:
The National Bureau of Revenue (NBR) updated the selective list of goods subject to excise tax as a continuation of the recent excise tax developments.
Kindly click here to view the entire updated list of goods subject to excise tax.
Majalis Abu Dhabi conducts Awareness Session on VAT Refund to UAE Nationals on building new residences
Date: 01 Sep, 2022
External URL: https://bit.ly/3U0xXRb
Abu Dhabi September 1, 2022:
As part of the lecture series at Majalis Abu Dhabi at the President’s Court, the Federal Tax Authority (FTA) held an awareness session that was broadcast live on Majalis Abu Dhabi’s Instagram account on the procedure for UAE nationals to recover the Value Added Tax (VAT) incurred on building their new residences. The session was broadcast live on Majalis Abu Dhabi’s Instagram account.
The session was held remotely, bringing Emirati citizens together with a team of experts from the FTA who explained the process for refunding VAT to UAE citizens on the construction of their new residences.
Speakers at the session clarified the steps to be taken to recover VAT through the FTA’s e-Services, starting with submitting the refund request with all supporting documents, all the way to receiving the refund amount by bank transfer to the applicant’s account.
During the session, the FTA’s team of experts outlined the criteria for submitting a VAT refund request incurred on the construction of new residences by UAE citizens, explaining the steps needed to create and verify an e-Services account for new users, as well as how to create a special refund requests account. The team also outlined how to submit and track a refund request, the deadline for submission, and the required documents. They also highlighted which potential applicants are eligible to recover VAT on their new homes, as well as which taxes are refundable.
ZATCA launches Public Consultation document on Amendments to Excise Tax Regulations
Date: 29 Aug, 2022
Riyadh August 29, 2022:
A draft of the proposed amendments to the RETT Regulations was issued by ZATCA on 27 June 2022 for public consultation on the National Competitiveness Centre platform.
Zakat, Tax and Customs Authority’s (ZATCA) board of Directors approved all the proposed amendments to various Articles of the Real Estate Transaction Tax (“RETT”) Regulations without any changes. Click here to access the official announcement. Also view the RETT Regulations with approved amendments.
ZATCA has also issued a new version of the RETT Implementing Regulations (in Arabic) after incorporating the approved amendments. Click here to view the entire document.
Commercial Establishment Shutdown for violating Tax Regulations worth AED 91 million
Date: 28 Aug, 2022
Dubai August 28, 2022:
Following a joint inspection campaign by the Federal Tax Authority (FTA) in cooperation with the General Administration of the Federal Criminal Police in the Ministry of Interior and the General Command of Dubai Police represented by the General Department of Investigation and Criminal Investigation, a non-compliant commercial establishment was seized and closed in Dubai after it was caught selling tobacco-based products without Digital Tax Stamps.
According to the press release, a total of 5,430,356 packs were confiscated from the violators for not bearing the trademark of Tax Stamps and the tax due on these products amounted to 91,833,016 AED.
The Authority took necessary legal measures against the violating establishment, as part of its continuous efforts to strengthen control over markets and prevent malpractices. The Authority reaffirmed its commitment to enhancing collaboration with all relevant federal and local government entities in order to ensure tax compliance across the emirates.
ZATCA Tightens Custom Controls to curb smuggling of Narcotics
Date: 16 Aug, 2022
Riyadh August 16, 2022:
During a stringent inspection schedule, the Zakat, Tax and Customs Authority (ZATCA) thwarted an attempt to smuggle 1,100,000 narcotic pills, after finding it hidden in a toys and clothes consignment received through the port of Jeddah Islamic Port.
In coordination with the General Directorate of Narcotics Control, the 5 culprits were arrested right on time. All thanks to the Authority’s efforts, which asserted that it will continue to tighten customs control over the Kingdom’s imports and exports through all its customs outlets, in order to achieve security and protection of society from malpractices.
At the same time, the authority also called on citizens and residents to contribute to combating smuggling in all its forms by communicating any such violations to its hotline 1910 OR 00966114208417 or via e-mail firstname.lastname@example.org. Through these channels, the authority receives reports related to smuggling crimes in complete secrecy and will bestow a financial reward to whistleblowers if the notified information is accurate.
KSA: ZATCA issues Simplified Guide on E-invoicing requirements
Date: 11 Aug, 2022
Riyadh August 11, 2022:
The Zakat, Tax and Customs Authority (ZATCA) of KSA has issued a Simplified guide on E-invoicing requirements in English. The guide aims to provide the taxpayers an overview of the E-invoicing implementation in the Kingdom and its requirements to facilitate their readiness for first and second phase.
The guide acts as a guide for users to understand the taxpayer’s user journey in preparing and successfully onboarding their E-invoice systems, and complying with the E-invoicing regulations with respect to cleared and reported invoices.
Also view the Simplified Guide for E-invoicing Requirements
UAE: FTA Extends Timeframe to Pay Penalties till 31 December 2022
Date: 10 Aug, 2022
External URL: https://bit.ly/3p8fgNf
Dubai August 10, 2022:
FTA calls tax registrants to benefit from the extension of the grace period for the re-determination of administrative penalties on violating tax law until December 31, 2022.Tax registrants who were not able to benefit from redetermination by December 31, 2021, can now benefit from the one-year extension.
The decision has been taken by the Cabinet in line with the wise leadership’s directives to reduce burdens on business sectors and enhance their abilities to contribute more to the growth of the national economy. The decision is also a part of the FTA’s goal to provide a legislative environment that encourages a high level of tax compliance.
Bahrain: National Bureau for Revenue (NBR) releases Manual on Tax Stamps
Date: 09 Aug, 2022
Manama August 9, 2022:
The National Bureau for Revenue (NBR) has issued a detailed manual on Tax Stamp for domestic importers and local manufacturers. The Digital Stamp Scheme is a supervisory system to track excise goods from the manufacturing stage to the point of consumption to limit smuggling instances within the Kingdom of Bahrain, thereby reducing the possibility of Excise evasion.
The manual provides clarity on the digital tax stamp on excise products in the country. It contains the following:
- An overview of the Kingdom of Bahrain’s excise rules and procedures in regard to the Digital Stamps Scheme.
- The necessary guidance needed to navigate the Digital Stamps Scheme online portal and the process of ordering and tracking digital stamps from the perspective of an importer of excise products.
NOTE: The manual intends to provide general information only and does not represent exhaustive or legally binding guidelines. For more information as case, you may directly contact National Bureau for Revenue (NBR) via email email@example.com
UAE: FTA sets Time Limit for Claiming Refund of VAT by Tourists
Date: 08 Aug, 2022
Dubai August 8, 2022:
The Federal Tax Authority (FTA) issued Decision 4 of 2022 for ‘Setting the Time Limit for Claiming Refund of VAT by Tourists’. Following are the key points of the decision.
- One year time limit has been set up for tourists to claim the refund of Value Added Tax through bank card or by cash, from the date of verification of the refund request.
- If Tourist does not claim the VAT refund within one year, in such case operator of the Tax Refunds for Tourist Scheme has to deposit the unclaimed amount to FTA within 1 month from expiration of the time limit of 1 year.
This decision will be effective from 1st June 2022.
UAE: Lawyer Penalized with Imprisonment and Fine for Tax Evasion
Date: 05 Aug, 2022
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.
OTA: Taxpayer Services conducts Tax Awareness Campaigns through Field visits
Date: 29 Jul, 2022
External URL: https://bit.ly/3OI8DM2
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.
ZATCA initiates Procedures for Implementing Phase II of E-invoicing Project
Date: 27 Jul, 2022
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.
UAE's FTA increases Inspection Visits 104% in 6 months
Date: 22 Jul, 2022
External URL: http://wam.ae/en/details/1395303068351
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.
Ajman Free Zone witnesses 33 percent Increase in Corporate Tax Companies
Date: 15 Jul, 2022
External URL: https://www.wam.ae/en/details/1395303060045
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.
Oman: Collection of Withholding Tax Suspended till 2025
Date: 14 Jul, 2022
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.
ZATCA sets 15th July as deadline to submit excise tax returns for last May and June
Date: 12 Jul, 2022
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.
OMR 301 million collected as VAT in Oman in 2021
Date: 07 Jul, 2022
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.
FTA released new Public Clarification on Excise Goods
Date: 01 Jul, 2022
External URL: https://bit.ly/3NFNy49
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:
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
Date: 30 Jun, 2022
External URL: https://saudigazette.com.sa/article/622375
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.
FTA released a new Public Clarification on Gold Making Charges
Date: 29 Jun, 2022
Dubai June 29, 2022:
The Federal Tax Authority (FTA) has recently released a Public Clarification – VATP029 on Gold Making Charges, iterating that the suppliers of the gold jewellery are required to pay VAT on the making charges component by charging the same in the invoice, which would not be covered under the ‘special reverse charge mechanism’.
This Public Clarification provides detailed guidance on the VAT legislation application pertaining to making charges received by gold jewelers and further explains several instances where the making charges are taxable under VAT or not.
ZATCA released an Updated Draft of the e-Invoicing Implementation Resolution
Date: 22 Jun, 2022
Riyadh June 22, 2022:
Electronic Invoicing (e-Invoicing) has gone live in Saudi Arabia (KSA) since December 4, 2021 and its further implementation has been planned in two phases:
1. Phase 1– Generation phase- which has gone live since December 4, 2022.
2. Phase 2– Integration phase- to go live on January 1, 2023.
With regards to the Integration phase, it is anticipated that six months before the second go-live date i.e by July 1, 2022, the Zakat, Tax and Customs Authority (ZATCA) will invite the first wave of taxpayers to integrate their IT systems with ZATCA’s Fatoora Portal.
The ZATCA released an updated draft of the e-Invoicing Implementation Resolution in Arabic on May 27, 2022. The changes made to the resolution, annexes and the related technical specifications are relevant for the latter phase that will go live on January 1, 2023.
FTA releases a Guide to acquaint Taxpayers with their Tax Obligations
Date: 15 Jun, 2022
Dubai June 15, 2022:
As a UAE business resident, you need to be aware of your varied tax obligations and abide by the tax laws in the country. That’s why it is important you understand your federal, state and local tax requirements. This will help you file your taxes accurately and make timely payments, thus saving you from penalties and encountering trouble with the law.
In this regard, the Federal Tax Authority (FTA) has issued a Comprehensive Guide on ‘Know your Tax Obligations’ to orient Taxpayers with their tax liabilities. The guide includes:
- Criteria for VAT registration
- Supplies exempt from VAT
- Zero-rated VAT supplies
- VAT records and supporting documentation
- Formation of tax groups
- Creating and using e-services account
- Obligations after tax registration
- Elements of a valid tax invoice
- Timely submission of tax returns and tax return periods
- Entitlement to recover input tax
- Contact details of FTA
For more details log onto www.tax.gov.ae
Oman and Tanzania sign Agreement to avoid Double Taxation
Date: 14 Jun, 2022
Muscat June 14, 2022:
The Sultanate of Oman has signed an agreement with the Republic of Tanzania to avoid double taxation and prevent tax evasion on income. A number of other memoranda of understanding have been signed-in various fields that cover energy, tourism, natural resources, higher education and training and national museums.
A tripartite memorandum was signed between the Oman Chamber of Commerce and Industry, the Tanzania Chamber of Commerce, Industry and Agriculture and the Zanzibar National Chamber of Commerce. A memorandum was signed between the Oman Investment Authority and the Zanzibar Investment Promotion Authority.
An investment fund will also be established between the two countries that will be concerned with investment in several fields including agriculture, fishing and mining.
Saudi increases Custom Duties for 99 products
Date: 13 Jun, 2022
External URL: https://saudigazette.com.sa/article/621693
Riyadh June 13, 2022:
Saudi Arabia increased customs tariffs on 99 commodities including vegetables, livestock and fish from June 12, 2022.
Mohammed Al-Jadaan, Minister of Finance and Chairman of the Zakat, Tax and Customs Authority (ZATCA), issued the decision of adjusting the customs tariffs based on the ceilings committed by the Kingdom in the World Trade Organization (WTO). The Saudi government is hoping to use custom increases to improve the balance of payments, increase exports and bring the private sector’s contribution to the gross domestic product (GDP) to 65%.
Among the changes are customs tariffs on sheep and goats rising from zero to 7%. Twelve types of fish and shrimp have also seen a rise with a minimum of 6% and a maximum of 15% respectively. A number of vegetables including onions, cucumbers, carrots, eggplant and zucchini now have import tariffs of 5%, up from zero.
The move came pursuant to the powers granted to the finance minister to protect and encourage national industries and local agricultural products.
KSA: Taxpayers Exempt from Fines and Penalties for 6 months
Date: 06 Jun, 2022
Riyadh June 1, 2022:
Zakat, Tax and Customs Authority (ZATCA) announced the launch of an initiative to waive fines and penalties for tax payers. The exemption will remain applicable for a 6-month period starting from 1 June 2022 till 30 November 2022.
The fines include delay in registration, late payment, report submissions and other general provisions related to VAT. However, the initiative doesn’t include fines related t tax evasion and fines that had to be paid before the launch of the initiative.
ZATCA has requested taxpayers to fully review the initiative through the simplified guideline available on its website. It includes a detailed explanation of the most important aspects of the decision, the types of penalties and the conditions that apply for benefiting from the exempt fines.
The Authority has urged all taxpayers to benefit from the initiative before it ends on November 2022. Any queries in this regards can be clarified by:
- Dialing their call center number 19993
- Or through their twitter account @Zatca Care
- Or sending an e-mail to firstname.lastname@example.org.
Israel and UAE boost ties by signing free trade pact
Date: 01 Jun, 2022
Dubai June 1, 2022:
Israel and UAE sign a free trade agreement on May 31, 2022. The pact aims to boost ties between the two countries by eliminating most tariffs and lifting their annual bilateral trade to more than $10 billion within five years. As per the official data, Emirati-Israeli trade records stood at $1.2 billion in 2021.
Tariffs will be removed or reduced on 96% of goods traded between the nations including foods, medicine, diamonds, fertilizers, jewelry and chemicals.
The agreement was signed in Dubai by Minister of Economy and Industry Orna Barbivai and her counterpart, UAE Minister of Economy Abdulla bin Touq Al-Marri after months of negotiations.
Oman: Expat faces fine, imprisonment and deportation for Tax Evasion
Date: 31 May, 2022
Muscat May 31, 2022:
An expat has been fined OMR 1,000 and was imprisoned for a month for non-adherence to tax returns submission. The court also ordered his deportation from the country at the end of his sentence.
Tax Authority said in a statement “The Court of First Instance in the Wilayat of Al Buraimi recently issued a court ruling against one of the companies operating in the Sultanate of Oman that is not obligated to submit tax returns for violating the provisions of the Income Tax Law issued by Royal Decree No. 28/2009 and committing a misdemeanor of non-compliance to submit tax returns.”
The Anti-Tax Evasion Department received a notification from one of the partners in the company on the mishandling of financial transactions. By referring to the records in its electronic system it was found that the accused did not file tax returns.
KSA: Purchases from Bahrain exceeding SR 3,000 must be disclosed
Date: 30 May, 2022
Dammam May 30, 2022:
The Zakat, Tax and Customs Authority (ZATCA) clarified whether fees will be applied to devices that are transported by travelers from Bahrain via the King Fahd Causeway.
The authority confirmed that travelers coming from Bahrain via the King Fahd Causeway bringing purchases worth more than SR 3,000 would be obliged to disclose it.
ZATCA noted that the fees applied to travelers will only be applied to new items wrapped in factory packaging that has not been used yet. It also indicated that travelers would be charged a value-added tax (VAT) of 15% on all imports they bring with them.
Saudi Arabia contemplating to cut VAT Rate
Date: 27 May, 2022
External URL: https://saudigazette.com.sa/article/620938
Riyadh May 27, 2022:
Saudi Arabia is contemplating a cut down in the VAT rate which was increased to 15 percent in 2020 during COVID times. The VAT rate was tripled to shore up finances hit by low oil prices and diminishing global demand due to the raging pandemic.
Minister of Finance Mohammed Al-Jadaan said “We will ultimately consider cutting the VAT but at the moment we are still replenishing the reserves.”
Jadaan added “Saudi Arabia’s policy on fiscal sustainability would ensure that reserves do not fall below a certain percentage level of the country’s gross domestic product.”
The world’s biggest crude exporter, whose economy is estimated at $1 trillion, said in its budget for 2022 that the Fiscal Sustainability Program aims to de-couple the economy from oil price fluctuations, realizing several economic benefits for the non-oil economy and the private sector.
Bahrain: Legal Action take against 18 Tax Violators
Date: 26 May, 2022
External URL: https://www.newsofbahrain.com/bahrain/81376.html
Manama May 26, 2022:
The Ministry of Industry in cooperation with the National Bureau of Revenue (NBR) began inspections in the city to trace down tax violators early this year. Inspections were carried out in nearly early 40 trading outlets across Bahrain to ensure stringent compliance with the readjusted VAT rules. The retail outlets found guilty of tax evasion are facing fines and jail terms.
Eighteen trading establishments are facing fines of up to 10,000 BD for having violated the VAT laws in the region. The lawbreakers can also be jailed for five years.
The ministry and NBR stressed the importance of complying with readjusted VAT regulations and urged customers to report defaulters on their hotline 80008001 or send an email to email@example.com
ZATCA thwarts an attempt to Smuggle 29,000 Captagon pills hidden in a Cheese Consignment
Date: 18 May, 2022
Riyadh May 18, 2022:
During the inspection process of one of the vehicles at Al Haditha port, Zakat, Tax and Customs Authority (ZATCA) managed to thwart an attempt to smuggle 29,000 Captagon pills found hidden in an artistic way inside glass boxes containing cheese.
The Captagon pills were discreetly inserted in plastic gloves and placed inside cheese containers, which were then cleverly placed within the luggage carried by the smuggler inside the vehicle. In coordination with the General Directorate of Narcotics Control, the consignment was seized and the culprit was arrested.
The authority confirmed that smugglers are seeking to exploit everything to try to introduce such contraband into the Kingdom through its land, sea and air customs outlets. However, the authority is on the lookout for such illegal attempts and seeks to combat drug smuggling of all kinds in its Kingdom.
The authority called on everyone to contribute to combating smuggling and protecting the society and the national economy by reporting defaulters on the number designated for security reports (1910) or via e-mail firstname.lastname@example.org or the international number (00966114208417).
Saudi GAZT launches a Value-Added Tax Guide for E-Shops
Date: 17 May, 2022
Riyadh May 17, 2022:
The General Authority of Zakat and Tax (GAZT) launched an interactive guide to educated online stores about the requirements of value-added tax. The guide will further enable e-storeowners to abide by their duties related to value-added tax and guide them on how to register, file a declaration and pay the due tax.
The guide outlines electronic stores as those operating through independent websites, social media platforms, smartphone applications, or instant chat applications.
The guide also does clarify the obligations of online store owners whose annual sales exceed 375,000 riyals annually before the Zakat and Income Authority. It includes registering for value-added tax, displaying the tax certificate in the online store, and filing tax returns on time.
View the Value-Added Tax Guide for E-Shops in Arabic.
Kuwait General Administration of Customs signs MoU with Abu Dhabi Ports Group
Date: 13 May, 2022
External URL: https://wam.ae/en/details/1395303034112
Abu Dhabi May 13, 2022:
A Memorandum of Understanding (MoU) was signed between Abu Dhabi Ports Group and Kuwait General Administration of Customs for Virtual Trade Corridor between the two countries. This agreement will help in simplification and facilitation of cross-border trade with the help of new policies, procedures and integrated solutions.
With the establishment of the new virtual trade corridor, customs authorities in both countries will be able to access pre-arrival information for international cargo movements, making cross-validation of information significantly faster and promoting pre-clearance of goods. The MoU will also provide for accelerated procedures for expediting shipments of perishable goods and reduce dwell time at borders. The digital integration also has significant safety and security benefits, improving visibility for authorities over any possible risks associated with goods that move between the two nations, as well as reducing the inspection rate and simplifying procedures for authorization holders.
UAE Ambassador to Kuwait, Dr. Al Neyadi said, “The UAE and Kuwait have a vast cooperation opportunity as they both have exceptionally promising markets. We are confident that the cooperation between AD Ports Group and Kuwait General Administration of Customs will enhance trade exchange between the two countries, and will support their efforts in achieving digital transformation goals, streamlining shipping procedures to reduce transportation and shipping costs, as well as expanding economic cooperation.”
Oman releases VAT Guide for Financial Services
Date: 09 May, 2022
Muscat May 9, 2022:
The Guide offers guidance on the application of the VAT Law and its Executive Regulations. It cover prime topics in banking, insurance, and Islamic Finance and outlines VAT treatments for many transactions and items, making it a useful reference for banks and other financial institutions when establishing suitable VAT treatment.
FTA's Board High on Development Plans to enhance Tax Systems
Date: 06 May, 2022
Dubai May 6, 2022:
During a meeting at the Authority’s headquarters, the Board of Directors reviewed a report on FTA’s plans to further enhance its tax system’s procedures and upgrade its services. The Authority wishes to offer customers fast and hassle-free services on an easy-to-use digital platform in line with international best practices. The report called for implementing a host of initiatives to advance the FTA’s performance through continuous development and follow-up that uplift its tax system efficiency to meet taxpayers’ aspirations. On a different note, the FTA Board also examined the progress made in developing the draft corporate tax law.
HH Sheikh Maktoum issued directives to maintain the pace of upgrades to FTA’s services, boost the UAE’s competitive edge in terms of services offered, and support the country’s vision to become the world’s highest-ranking government on trust and performance indicators. The directives call for focusing on the customer and enhancing competencies to become a world leader in government services, drawing on UAE’s principles for the next 50 years.
The Happiness of FTA Customers
FTA’s reports demonstrate its efforts to maintain high performance scores across all activities and elevate its services to ensure satisfaction of all customers from varied segments of the society. His Highness iterated “FTA is committed to strengthening its relations with all entities involved in implementing the tax system in the government and private sectors, and to fulfilling its role in driving nationwide economic diversification policies through the administration and collection of federal taxes, in line with best practices.”
HH Sheikh Maktoum explained “The Authority is constantly reviewing its executive regulation for each tax legislation in order to ensure top-level performance and streamlined procedures. The phases ahead will witness sweeping developments and upgrades to tax systems in order to enhance overall service quality.”
UAE Corporate Tax law to benefit Free Zone-based Companies
Date: 05 May, 2022
Dubai May 5, 2022:
Since the announcement of UAE’s nine percent corporate income tax (CIT) from June 2023, a widely discussed topic has been the taxability of free zone entities. The great news is that Corporate Tax will continue to benefit free zone-based entities with a host of incentives.
The UAE Ministry of Finance (MoF) issued a public consultation document inviting comments from stakeholders on the proposed legislation. This progressive step provides an opportunity for businesses to play a key role in formulating the UAE Corporate Tax law. The consultation document outlines the following points:
- The UAE Corporate Tax regime will honour the tax incentives currently being offered.
- Zero percent CIT rate will be applicable if the free zones entity earns income from outside UAE or within free zones.
- Audited financial statements are a must.
- Mainland branches of free zone entities will be taxed at the regular tax rate on mainland income.
- Free zone entities with passive income such as dividend, royalty and interest from the mainland will attract a zero percent tax rate. Similarly, such entities in designated zones for VAT purposes supplying goods to the mainland will also be eligible for zero percent rate.
- Free zone entities can be a regional sourcing hub; however payments made by mainland entities will not be a deductible expenditure.
- Any other mainland sourced income to the free zone will disqualify it from the zero percent rate.
- Free zone entities can make an irrevocable decision to be subject to the regular corporate tax rate.
- For computing taxable income, accounting profit/loss would be the starting point. The default tax year would be the Gregorian calendar year. Dividends and capital gains would be exempt subject to certain conditions. Expenses on account of interest payments have been limited to 30 per cent of EBITDA and only 50 per cent of entertainment expenses would be allowed as deduction.
MoF releases Public Consultation Document of the proposed Corporate Tax law
Date: 30 Apr, 2022
Dubai April 30, 2022:
MoF urges taxpayers to provide clear and concise comments or views on the main features and implementation of the UAE CT regime in the region. You are encouraged to focus your comments on aspects of the proposed CT regime that may help to reduce compliance cost or complexity and improve certainty for both the tax administration and taxpayers alike. Comments on areas not covered in this document are also welcomed.
NOTE: Views to be submitted on or before 20 May 2022.
For support call 800533336 or send an email to email@example.com
FTA launches 'Raqeeb', whistle-blower program for tax violations and evasion
Date: 29 Apr, 2022
Dubai April 29, 2022:
The Federal Tax Authority (FTA) launched Raqeeb, a “whistle-blower program for tax violations and evasion that aims to raise the level of tax compliance in the UAE and reduce tax evasion cases.
Effective from April 15, 2022, the whistle-blower program allows the Authority to receive reports from individuals on tax evasion cases, tax-related fraud, and violations of tax legislation. It also allows the Authority to verify the reports and grant monetary rewards to informants when certain conditions are met.
The Authority emphasized the newly launched whistle-blower program aims to enhance transparency and competitiveness in the field of doing business, raise tax compliance rates, and boost tax awareness and society’s confidence in the tax system. The program also motivates individuals to carry out their social responsibilities and contribute to combating tax violations. Informants will be given monetary rewards if the report leads to a collection of tax amounts worth more than AED 50,000.
Reporting information can be done through the Authority’s website, which contains a comprehensive guide on the reporting mechanism, procedure for obtaining monetary rewards and other legal matters related to the program.
KSA: ZATCA launches App to improve taxpayer experience
Date: 26 Apr, 2022
Riyadh April 26, 2022:
The Zakat, Tax and Customs Authority (ZATCA) has designed a new application to offer fast, reliable, and high-quality services to taxpayers. The App allows taxpayers from the business sector to complete their services in a much more effective manner. It also offers technical solutions to improve the taxpayer’s experience and contributes to enhancing the level of services provided by the Authority.
The ZATCA APP in total provides a host of 33 services, such as submitting zakat and tax returns, registering businesses and establishments, submitting objections, and viewing zakat and tax certificates. The application also allows taxpayers to inquire about the payment processes instead of visiting the Authority’s branches.
One of the most prominent advantages provided by the app is the online payment service that helps in completing the process of services in a more reliable and secure manner.
UAE: Tax Compliance rate increases in Q1
Date: 25 Apr, 2022
UAE April 25, 2022:
During the first quarter of 2022, businesses across the UAE have adopted the new tax structure and increased their compliance on regulations by depicting 2.42 percent growth in registration for value-added tax (VAT), as per data reports.
The Federal Tax Authority (FTA) said the number of VAT registrants rose to 367,157 this quarter (January-March) compared to 358,468 in the same quarter last year.
Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister, Minister of Finance, and Chairman of the FTA Board of Directors, issued directives to maintain the pace of upgrades made to the FTA’s services in line with international best practices and digital transformation plans.
Shops in Oman to display a list of All VAT Exempt Products
Date: 22 Apr, 2022
Muscat April 22, 2022:
Shop owners in Oman have been urged by the Consumer Protection Authority (CPA) to clearly label the list of zero-rated VAT products so as to not confuse or try to trick customers into paying more for such goods.
The CPA issued a notice stating “We direct all the commercial centers and shops across the various governorates of the Sultanate of Oman to affix labels mentioning all goods exempt from value-added tax.” Most of these VAT exempt items are staples essential for day-to-day life.
The list of items exempted from VAT include:
- Foodgrains such as wheat, rice, barley and corn, and flours made from them.
- Milk products in their various forms, i.e. plain milk, milk powder, cheese and yoghurt.
- Varieties of breads; water, salt and sugar.
- Fruits and vegetables.
- Meat, fish, and poultry.
- Coffee and tea.
- Medicines and baby products.
OTA requests Taxpayers to submit Tax Returns by end of April
Date: 20 Apr, 2022
Muscat April 20, 2022:
The Oman Tax Authority (OTA) has urged taxpayers subject to the provisions of Value-added Tax (VAT) to submit tax returns for the first three months of 2022 by the end of April.
The Tax Authority said in a statement: The period for submitting tax returns for the first quarter of 2022 ends on April 30. Hence the concerned are requested to file their returns before the lapse of the mentioned period.
FTA, UAE orients NBR, Bahrain on the Digital Tax Stamp Scheme
Date: 19 Apr, 2022
Dubai April 19, 2022:
In a joint virtual meeting between officials from the Federal Tax Authority (FTA) and the National Bureau for Revenue (NBR), an official delegation from the Kingdom of Bahrain was oriented on the UAE’s Marking Tobacco and Tobacco Products Scheme.
Implemented by FTA, the Digital Tax Stamps system enables the tracking of tobacco products electronically to combat tax evasion, protect consumers from fraud, prevent the sale of illegal products, and ensure the collection of due taxes on tobacco products sold in the market. FTA’s representatives briefed the attendees on the objectives, scope and steps for implementing the various phases of the Tobacco Products Marking Scheme.
His Excellency Khalid Ali Al Bustani, Director-General of the FTA, discussed ways to enhance cooperation, develop relations and work together to build expertise in the field of taxation. His Excellency opined that the meeting reflects the strong bilateral relations between the two countries, as well as their commitment to strengthen their partnerships in the field of taxes by exchanging information and experiences. He added ‘These meetings are essential to enhance cooperation between tax authorities in neighboring countries and to benefit from the regulations applied in the tax sector.’
FTA releases Whistle Blower Guide
Date: 15 Apr, 2022
Dubai April 15, 2022:
The Federal Tax Authority (FTA) released a user guide to help prepare informants on submitting information and leads in a confidential manner to inform the FTA of any natural or legal person evading tax, or committing other tax offenses. This measure aims to raise the level of tax legislation compliance in the country and reduce tax evasion cases.
This guide is designed to help :
- Understand the whistleblowing program.
- Report business practices that violate the applicable tax legislation.
- Understand the process and eligibility to receive a monetary reward where tax is successfully collected from tax offenders.
- Provide accurate answers to the questions on the whistleblowing form by explaining what information is required to provide.
- Understand the icons and symbols to complete the whistleblowing form.
Read more about the Whistleblower System for violation and tax evasion.
FTA forms a Youth Council to develop a Generation of Future Leaders
Date: 08 Apr, 2022
Dubai April 8, 2022:
The Federal Tax Authority (FTA) has launched a Youth Council, an initiative in alignment with the Federal Youth Authority. The council intends to support and empower the youth in the region.
The newly formed council will simultaneously enable the FTA to benefit from the ideas and vision of its council members and fulfill several objectives. This includes adopting its members’ suggestions to continuously improve its services, preparing a new generation of future leaders and providing a platform for innovation. The outputs are linked with the FTA senior management for use in implementing the Authority’s future strategies.
His Excellency Khalid Ali Al Bustani, Director-General of the FTA, stressed that this important step comes within the framework of government directions to enhance the empowerment of young people in various sectors and facilitate their role in public, community and business life.
ZATCA issues Interactive guidelines to guide taxpayers about their E-Services
Date: 07 Apr, 2022
Riyadh- April 7, 2022:
The Zakat, Tax and Customs Authority (ZATCA) has compiled a list of guidelines to guide taxpayers and business owners in the region to use their e-services portal. The detailed guide comprises an in-depth explanation of the e-services offered and helps taxpayers to learn more about successfully processing transactions online.
The guide consists of service steps to complete each procedure for ZAKAT, VAT, Excise Tax, Withholding Tax, Corporate Income Tax, Real Estate Tax Service, Customs and General Services. The ultimate goal is to educate taxpayers to perform varied transactions and make the experience much easier and faster.
View the guidelines in the file.
ZATCA introduces Guide on Objections to ZATCA Decisions
Date: 06 Apr, 2022
Riyadh- April 6, 2022:
The Zakat, Tax and Customs Authority (ZATCA) has released a detailed guide clarifying the process to file an objection against a tax assessment raised by ZATCA. This is for those cases where taxpayers disagree with their decision.
The guide is available only in Arabic at the moment and can be viewed here.
UAE: With Corporate Tax on cards, Ministry plans to Reduce Services Fees for Businesses
Date: 04 Apr, 2022
Dubai- April 4, 2022:
The UAE Ministry of Finance (MoF) announced on 31 January 2022 that it will introduce a federal corporate tax regime in the region, which will come into effect on 1 June 2023 and will apply to net profits generated during financial years starting on or after 1 June 2023.
In lieu of this, the MoF plans to review the services fees in all ministries and federal entities. The review aims to reduce the fees in order to lessen the financial burden on the business community in the country.
FTA Confirms an Advanced System for VAT Refund for Tourists
Date: 01 Apr, 2022
Dubai- April 1, 2022:
The Federal Tax Authority (FTA) confirmed that the VAT Refund Scheme for Tourists is witnessing continuous advancement and expansion. It has introduced more facilities to streamline and speed up the refund process for tourists eligible for a tax refund.
The authority noted that the system witnessed a significant increase in demand recently, as travel restrictions eased out. Mega event EXPO 2020 also helped the tourism sector in the UAE recover from the setback caused by the pandemic. The government’s efforts in supporting the travel industry was also another contributing factor.
The Refund Scheme for Tourists includes an integrated electronic system that creates a direct link between 13 air, land, and maritime entry/exit ports across UAE, with more than 13800 registered stores, allowing tourists to submit tax refund requests on their purchases. The system allows eligible tourists to reclaim the VAT incurred, provided they meet the specified criteria. The UAE is one of the first countries to implement such a Refund System characterized by the speed of completion, ease of procedures, and clarity.
During the Global Tourism Forum held at Expo 2020 Dubai, FTA in collaboration with its authorized operator (Planet) for VAT Refund Scheme – showcased the pandemic’s implications on shopping patterns and consumers’ behaviours along with economic indicators of recovery globally and locally. The event brought together representatives from many departments including the Department of Economic
A Selective Tax system to be implemented in Kuwait
Date: 24 Mar, 2022
Kuwait- March 24, 2022:
Due to high inflation rates and turmoil in global markets, both the national assembly and the people of Kuwait are likely to reject the VAT system in future. Hence the Kuwaiti government has deferred its plans to implement value-added tax (VAT) any time soon.
However, Kuwait is contemplating a move towards the implementation of a selective taxation system ranging from 10 to 25 percent. This excise tax will cover tobacco products, sweetened drinks, expensive goods such as watches, jewelry and precious stones as well as luxury cars and yachts, instead of VAT.
Sources expect that the selective tax will fetch around 500 million dinars annually to the government.
FTA Launches New Website with Advanced Features to enhance Tax System Efficiency
Date: 23 Mar, 2022
Dubai- March 23, 2022:
The Federal Tax Authority (FTA) has launched an advanced website to provide an innovative digital experience, clarity of content and user-friendly browsing for taxpayers. The latest electronic display technologies on the site also enhance customers’ satisfaction and happiness, and further improve the tax system efficiency.
The Authority stated that its new website www.tax.gov.ae is designed to educate and spread awareness about tax rules and regulations in the country. The website allows digital participation and provides services in accordance with needs of taxpayers.
The platform offers 24/7 direct interaction between the Authority, business sectors, relevant authorities in the government and private sectors, and all interested groups inside and outside the country. FTA also reaffirmed that its new website incorporates advanced features to enable people of determination to access services and information with ease.
CPA probes complaints about VAT fraud by commercial establishments
Date: 22 Mar, 2022
Muscat- March 22, 2022:
The Consumer Protection Authority (CPA) has started an investigation into complaints filed by consumers against some commercial establishments for charging value-added tax on products that are free of tax.
The Authority said “Work is underway to further probe into the matter, verify the accuracy and arrest the violators.”
The authority is fully monitoring the markets, and has requested consumers to actively report any violations that contradict regulations and laws of the land, that were established to organize markets, and protect consumer rights.
OTA expands list of Zero-rated food items
Date: 21 Mar, 2022
Muscat- March 21, 2022:
Oman Tax Authority (OTA) through Decision No. 89/2022 has expanded the list of zero-rated food items under zero-rated VAT. The new list now includes food products such as barley, corn, wheat, soybeans, cotton seeds, coconut or copra, and poultry food.
The products which are eligible for zero-rating are classified as per the Harmonized Code of Oman Customs tariff. The list is currently available only in Arabic.
NBR's Inspection Campaigns detect 29 Violations and close 2 Stores in the Kingdom
Date: 19 Mar, 2022
External URL: https://www.nbr.gov.bh/releases/116
Manama- March 19, 2022:
Since the roll-out of the law to double VAT in January 2022, the Ministry of Industry, Commerce and Tourism, in cooperation with the National Revenue Authority(NBR), conducted inspection campaigns on shops and commercial establishments. As many as 40 shops and commercial establishments were inspected in the Kingdom to check their compliance. The main aim of the inspections was to spread awareness of the mechanisms to be followed to apply VAT in its modified basic proportion and ensure the interest of consumers.
The inspection campaigns detected around 29 violations that require the imposition of administrative fines that may reach 10,000 Bahraini Dinars in accordance with the law and also necessitated the closure of two precautionary stores. NBR is geared to take legal measures against the violating facilities, and refer those proven of an evasion crime to the authorities. Penalties could even reach up to five years imprisonment and a fine equivalent to three times the evaded added value.
Citizens and residents who come across any violation of the VAT law can report their complaints to the authorities by dialing 80008001 24/7 or sending an email to firstname.lastname@example.org
ZATCA Carries Out more than 1,300 Inspection Visits in the Kingdom
Date: 18 Mar, 2022
Riyadh – March 18, 2022:
Tax inspectors at Zakat, Tax and Customs Authority’s (ZATCA) carried out more than 1,300 visits in markets and shops in the Kingdom as part of the national program to combat commercial concealment.
The inspections took place in Riyadh, Makkah, Medina, Qassim, and Jazan, and included various shops, such as auto parts markets, health, food and beverages, oil and gas. Riyadh region witnessed the highest number of inspections, with a total of 126 visits.
According to the Authority, the visits resulted in the detection of 88 cases of initial suspicion of commercial concealment. This comes with ZATCA’s keenness to unify efforts in coordination with its government sector partners to combat commercial concealment in all its forms, minimize commercial transaction violations and increase tax compliance.
FTA Actively Participates in UAE National Sports Day
Date: 16 Mar, 2022
Dubai – March 16, 2022:
National Sports Day is held every year in the UAE with the participation of sporting enthusiasts in athletic, physical, and heritage activities the entire day. This national occasion is organized in line with directives from His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
The Federal Tax Authority (FTA) participated in the 7th UAE National Sports Day under the theme ‘The UAE Unites Us’ with an agenda of athletic activities, that included bicycle racing, walking, and other sports activities. Prizes were distributed to the winners and participants.
The activities helped promote a culture of sports and brought in positive vibes among FTA staff. The Authority encouraged its employees to make sports a part of their daily lives, to support both their physical and mental health.
FTA Director General His Excellency Khalid Ali Al Bustani said that the sports events reported significant participation from their employees who exhibited great enthusiasm and a sporting spirit.
OTA signs the Convention on the Provision of Tax Stamp Services
Date: 11 Mar, 2022
External URL: https://bit.ly/3pUwfDq
Muscat – March 11, 2022:
As part of its effort to improve the efficiency of the tax system, Oman Tax Authority (OTA) signs the Convention on the Provision of Tax Stamp Services. The Authority signed an agreement to provide digital stamp services with De la Rue International, the world’s leading tax stamp printing company that specializes in the design of distinctive tax stamps.
The project of printing high-security digital stamps on selective products will be implemented in several phases gradually in the Sultanate of Oman. Each stage will target one type of selective goods traded in markets and the first phase is likely to begin in April for the targeted tobacco and cigarettes products. The last phase will involve the determination of the date for non-acceptance of goods without stamps.
Oman publishes VAT Guide for Associated Persons including Tax Groups
Date: 04 Mar, 2022
Muscat – March 4, 2022:
The Oman Tax Authority (OTA) released VAT Guide for Associated (Related) Persons including VAT groups in Arabic.
Guidance is provided on the formation of tax groups for VAT. Associated persons may register as a tax group for VAT purposes if the following conditions are met:
- All persons are tax resident in Oman;
- All persons are legal persons;
- All persons are registered for VAT according to the law;
- One person (the parent entity), in or outside the group, must have control over all other persons in the tax group;
- No person is a member of another tax group;
- None of the persons are registered in a special regime zone.
No Income Tax on cards in the UAE
Date: 28 Feb, 2022
Dubai – February 28, 2022:
UAE’s Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi clarified that income tax is not on the table in an interview with Bloomberg.
The interview comes in the wake of the UAE’s MoF’s decision to introduce corporate tax on business profits from financial years starting on or after June 1, 2023. With a standard statutory tax rate of nine percent and a zero percent for taxable profits up to AED 375,000 to support small businesses and startups, the UAE corporate tax regime will be amongst the most competitive in the world. The minister opined that corporate tax was received positively by the country’s corporate sector as the tax will replace most of the fees companies are currently paying.
Based on the MoF’s Corporate Tax FAQs, individuals will also be subject to corporate tax when they conduct business in the UAE under a commercial license 1.e under a freelance license).
FTA showcases Initiatives During ‘UAE Innovates 2022’
Date: 18 Feb, 2022
Dubai – February 18, 2022:
The Federal Tax Authority (FTA) has launched several initiatives set to take place across the UAE throughout February. The ‘UAE Innovates 2022’ initiative would promote a culture of government innovation by engaging the community in ambitious projects to design future experiences and develop initiatives that support the government’s plans to shape a better future, in collaboration with individuals and entities.
His Excellency Khalid Al Bustani, Director-General, FTA, asserted the Authority’s commitment to participating in the annual activities of the ‘UAE Innovates’ initiative. Through its participation, FTA encourages innovation and engages the public in the digital transformation process and the National Innovation Strategy, which aims to position the UAE among the most innovative countries around the world.
FTA is participating in the UAE Innovates Exhibition at the Festival Garden in Expo 2020 Dubai as part of the Innovation Month. The FTA team will introduce visitors to its innovative digital and electronic system for the Tourist VAT Refund Scheme to process requests easily and on time. The system reflects the UAE’s ongoing efforts to support the tourism sector and position itself as an ideal tourist destination.
Dubai Customs issues New Policy on Client Registration for acquiring Customs Code
Date: 17 Feb, 2022
Dubai – February 17, 2022:
Dubai Customs released a new Policy i.e Customs policy no. 53/2022 on client registration for acquiring customs codes.
This Policy comes into effect from the date of issuance and supersedes any conflicting provisions. Earlier, Customs policy no. 28/2009 dated 22 October 2009 detailed the client registration-related matters.
The new policy regulates the client registration procedure for obtaining special identification codes and simplifies the transactions with Dubai Customs. This enables clients to adhere to stipulations laid for different custom transactions.
ZATCA announces Revised Penalties for Non-compliance with VAT and E-invoicing Rules
Date: 09 Feb, 2022
Riyadh – February 9, 2022:
The Zakat, Tax and Customs Authority (ZATCA) published an announcement on its website regarding penalties for violations of VAT rules. However, it is only available in Arabic.
As part of the announcement, the previous fines have been amended ushering in a more cooperative and educational approach for penalizing taxpayers for their non-compliance with VAT rules than previously.
Bahrain Tax Authority releases VAT return guidance
Date: 04 Feb, 2022
Manama – February 4, 2022:
From January 1 2022, the standard rate of value-added tax (VAT) in Bahrain increased to 10 percent from the previous rate of 5 percent.
Under the new transitional rule, supplies made during 2022 pursuant to a contract signed on or before 23 December 2021 are subject to VAT at a rate of 5 percent until the contract expires, is renewed or is amended (whichever is earliest).
For further clarifications the National Bureau for Revenue (NBR) has released a detailed manual in English for taxpayers:
- VAT return filing manual for tax periods in 2022 (Filing payment and returns).
- A simplified VAT return filing manual applicable for tax periods in 2022.
For addressing any of your queries related to the new manual, get in touch out tax experts.
UAE to introduce 9% corporate tax on business profits from June 1, 2023
Date: 01 Feb, 2022
Dubai – February 1, 2022:
The Ministry of Finance has announced that the UAE will introduce a federal corporate tax on business profits effective for financial years starting on or after June 1, 2023. With a standard statutory tax rate of 9 percent, the UAE corporate tax regime will be amongst the most competitive in the world.
The Ministry also confirmed that there will be no tax on profits of up to AED 375,000, in a move to support small businesses and startups.
The corporate tax will apply to all businesses and commercial activities alike, except for the extraction of natural resources which will remain subject to Emirate level corporate taxation.
No corporate tax will apply on personal income from employment, real estate and other investments, or any other income earned by individuals that do not arise from business or other forms of commercial activity.
UAE businesses will be given sufficient time to prepare for the introduction of corporate tax. The Ministry of Finance will issue further information on the new tax regime toward the middle of the year to help businesses get ready.
Qatar to introduce new Passenger Tax at its airports from April 2022
Date: 31 Jan, 2022
Doha – January 31, 2022:
Qatar Civil Aviation Authority announced that passengers arriving, leaving or transiting through Hamad International Airport will now have to pay extra service tax starting from April 1, 2022.
An official notice was sent to all airline managers and travel agents which included the amendment of the current fees and the introduction of new security and air freight infrastructure fees at Qatari airports.
The new tax will be applied to all tickets issued on or after February 1, 2022 and will be officially implemented from 12am Doha time on April 1, 2022.
To know more details about the fees to be paid by passengers click here.
FTA Extends Grace Period upto 1 year to pay penalties
Date: 27 Jan, 2022
Dubai – January 27, 2022:
The UAE’s Federal Tax Authority (FTA) extended the grace period to benefit from re-determination of administrative penalties on violating tax laws until December 31, 2022.
The reduced administrative penalties amount to 30 percent of the total unpaid penalties that were imposed before June 28, 2021. The authority further elaborated that tax registrants who were not able to benefit from redetermination by December 31, 2021, can benefit until December 31, 2022.
The Cabinet decision provided an opportunity for the business sector to benefit from the reduction of administrative penalties. The decision will reduce burdens on business sectors and enhance their abilities to contribute more to the growth of the national economy. The decision is also a part of the FTA’s goal to provide a legislative environment that encourages a high level of tax compliance.
Muscat Municipality to reinstate Municipal Tax from January 2022
Date: 24 Jan, 2022
Muscat – January 24, 2022:
Muscat Municipality has issued a circular to business owners stating that the tax on all commercial activities and establishments, which were stopped as part of the economic stimulus package, will be reactivated from January 1, 2022.
The economic stimulus plan aimed at supporting the recovery efforts to mitigate the economic repercussions induced by Covid-19, which included an exemption from the municipal tax for hotel establishments, tourist restaurants, amusement centers and parks until the end of 2021.
Dubai Customs amend Procedures for cross-border e-commerce
Date: 18 Jan, 2022
Dubai – January 18, 2022:
Government of Dubai and the Dubai Customs Authority issues Customs notice No. (15/2021) for e-commerce companies in the region.
It applies to commercial companies, including SMEs, free-zone companies, logistics companies, and customs warehouses that provide online retail and selling services for goods and products through e-commerce channels. Both B2C and B2B transactions are covered in the notice.
The notice has been issued for the purpose of simplifying and facilitating customs procedures and regulating the movement of goods through cross-border e-commerce channels.
Kuwait’s MPs against Imposing Taxes to address Budget Deficit
Date: 17 Jan, 2022
Kuwait- January 17, 2022:
During the National Assembly’s session, MPs in Kuwait have strongly refused economic reforms that would involve imposing taxes on citizens in the country to address the budget deficit.
According to a state-run news agency, a number of politicians called for solutions to address the country’s budget deficit –A record KD10.8 billion ($36bn) deficit in 2020, up 175 percent from a year earlier.
During the session, the MPs affirmed the need to allow the oil sector to rely on other oil-related substances to create multi-income sources. However, it was emphasized that this solution shouldn’t be touching upon taxation.
Presently, Kuwait does not impose income tax on income earned by individuals. However, companies in the region pay 4.5 percent of their net profits, that includes zakat and labor support and a contribution to the Foundation for the Advancement of Sciences.
OTA releases guide on VAT Registration Procedures for Non-Residents
Date: 12 Jan, 2022
Muscat- January 12, 2022:
The Oman Tax Authority (OTA) has published a guide on VAT Registration procedures for non-resident applicants.
The guide explains the relevant provisions of the VAT Law and the VAT Regulations regarding the VAT obligations of non-resident people. This includes guidance for non-residents to register with the OTA when the conditions for registration are met. This forms the date from which they are obliged to pay the tax in accordance with the provisions of this Law.
The person who has no place of residence in the Sultanate may appoint a responsible person or tax agent (representative) in Oman, for the specific procedures.
OTA released a New VAT Taxpayer Guide for Oil and Gas Sector
Date: 07 Jan, 2022
Muscat- January 07, 2021:
Oman Taxation Authority (“OTA”) has issued a guide to provide additional interpretation and guidance for the application of the VAT Law and its corresponding executive regulations to the Oil and Gas Industry in Oman. The guide throws clarification on important practical aspects for the industry in Oman.
The aspects include the applicability of VAT for upstream, midstream, and downstream activities performed by the sub-contractors, contractors, and operators. Each of these areas has been elaborately discussed through the guide. It also includes the scope of zero-rating under Article 93 of the Executive Regulations, which is one of the crucial areas for businesses operating within the sector.
Click here to view the detailed guide – VAT Taxpayer Guide- Oil and Gas.
For more information, please contact Oman Tax Authority:
P.O. Box: 285, P.C. 100, Muscat
Hours: Sunday – Thursday | 07:30-14:30
Telephone: +968 2474 6996
Bahrain Publishes Law Increasing VAT Rate to 10% from 2022
Date: 04 Jan, 2022
External URL: https://www.lloc.gov.bh/HTM/K3321.htm
Manama- January 04, 2022:
Bahrain has published Law 33 of 2021 in the Official Gazette, which provides for the increase in the standard VAT rate from 5 percent to 10 percent with effect from January 1, 2022.
Article 4 of the law includes a transitional provision for supplies under a contract concluded prior to 1 January 2022. This includes that the 5% rate will continue to apply for such contracted supplies until the contract expires, is amended or is renewed or lapsed post a year after the law is effective, whichever is earlier.
NBR releases a set of FAQS relating to VAT increase
Date: 03 Jan, 2022
External URL: https://www.nbr.gov.bh/vat_faqs/17
Manama- January 3, 2022:
NBR (National Bureau for Revenue) has released a set of FAQS on the transitional measures related to the VAT rate increase in Bahrain. The basic percentage of value-added tax has been changed from 5 percent to 10 percent effective from January 1, 2022.
Supplies of goods or services made on or after January 1, 2022, will be subject to 10% value-added unless the supply is zero-rated, exempt or falls within the transitional provisions set out below.
Bahrain Shura Council ratifies Doubling of VAT
Date: 23 Dec, 2021
External URL: https://www.newsofbahrain.com/bahrain/77327.html
Manama- December 23, 2021:
Bahrain Shura Council, the upper house of the National Assembly, approves the draft law to double VAT to 10 percent in the country.
The Gulf’s smallest economy is seeking ways to cut spending and bring its budget back to balance in 2024.
Besides approving the VAT bill, MPs in Bahrain approved increasing social welfare and support allowance by 10 percent. Under the new social welfare system to be implemented from January 1, a low-income Bahraini would receive BD77 monthly, a couple would receive BD132 up from the current BD120, and each child BD25 (unchanged) but with the BD150 cap removed for the total given to a family.
FTA confirms systems’ readiness of VAT Refund Scheme for Tourists
Date: 21 Dec, 2021
External URL: https://www.wam.ae/en/details/1395303004260
UAE- December 21, 2021:
The Federal Tax Authority (FTA) organized field tours to the ‘Self-Service Kiosks’ in Dubai International Airport to ensure the system’s readiness. (As part of the VAT Refund Scheme for Tourists)
The tour was arranged in line with FTA’s strategy to offer services that meet taxpayers’ aspirations and its commitment to abiding by Cabinet Decision No. (41) of 2018 on Introducing the Tax Refunds for Tourists Scheme.
During the tour, FTA Director-General Khalid Ali Al Bustani claimed that the services simplify VAT refund requests for tourists on purchases they make during their stay in the UAE. The streamlined procedure identifies taxes eligible for refunds, verifies purchased items are with the tourist and facilitates tax recovery.
FTA has issued Reconsiderations User guide
Date: 16 Dec, 2021
UAE- December 16, 2021:
The FTA of UAE has issued a Reconsiderations User guide for both Registered and Non-registered users.
The guide in detail explains in detail the process to be followed for filing of reconsideration form. It helps taxpayers navigate the e-Services portal from a systems perspective, to successfully complete the filling of the Reconsiderations form. It is designed to help you:
- Create an e-Services account with the FTA.
- Provide accurate answers to the questions on the Reconsideration form by explaining the information required.
- Understand the icons and symbols you see while completing the form.
It is pertinent to note that since 19 November 2021 , Reconsideration requests service are available on the e-services portal instead of FTA’s website.
Oman has no plans to increase VAT rate
Date: 15 Dec, 2021
Muscat- December 15, 2021:
Oman’s Minister of Finance Sultan bin Salim Al Habsi has confirmed that the state will not follow Saudi Arabia and Bahrain on VAT rise. Omani Ministry declared that the standard 5 percent Value Added Tax (VAT) rate continues in 2022. Al Habsi affirmed ‘We have seen some countries increase the VAT tariff but our government has no intention to increase the current VAT.’
This move comes despite neighboring countries Saudi Arabia (15%) and Bahrain (10%) both raising VAT from the original Gulf Coordination Council launch rate of 5%. Of the six GCC states, Kuwait and Qatar are yet to implement VAT as part of the agreed VAT and Customs Union.
FTA publishes new Public Clarification on 'Mobile Phones, Airtime, and Data Packages Made Available to Employees for Business Use'
Date: 14 Dec, 2021
UAE- December 14, 2021:
Due to COVID-19, there has been an increase in work-from-home arrangements, resulting in some instances where employers pay for Phones, Airtime, and Packages’ expenses to allow employees to perform their roles remotely. Many businesses enter into agreements with telecommunication service providers to make mobile phones, airtime (call minutes) and data packages available to their employees to perform their roles outside office hours or at locations away from the office.
In this regard, the UAE Federal Tax Authority (FTA) published a new VAT Public Clarification (VATP028) that provides guidance on the application of the VAT legislation in respect of the recovery of input tax incurred on Phones, Airtime, and Packages acquired for business use.
ZATCA publishes Guide for developing a Fatoora compliant QR code
Date: 13 Dec, 2021
Riyadh- December 13, 2021:
The Zakat, Tax and Customs Authority (ZATCA) published a guide that gives a technical explanation on how to develop a Fatoora compliant QR code for E-invoices. In accordance with the E-invoicing resolutions issued by ZATCA, all simplified invoices must contain a QR code containing certain prescribed information.
Electronic Invoicing is a procedure that aims to convert the issuance of paper invoices into an electronic process that allows the exchange and processing of invoices, credit and debit notes in a structured digital format between the buyer and seller. (View the E-invoicing guidelines)
View the guide on how to develop a Fatoora compliant QR code .
Read more: The first phase of mandatory electronic invoicing (FATOORAH) regulations have come into force in Saudi Arabia on December 4, 2021.
Bahrain to raise VAT to 10% by 2022
Date: 09 Dec, 2021
Manama- December 9, 2021:
The Gulf’s smallest economy Bahrain has announced the doubling of value-added tax (VAT) to 10 percent from 5 percent in 2022. The reform is part of its plans to fix the Gulf state’s finances.
The VAT increase likely to start next year could contribute receipts of about 3 percent of the gross domestic product in the next few years, up from about 1.7 percent this year, a rating agency has estimated.
“The successful approval of the VAT increase by parliament is a critical milestone within our economic recovery plans and our aim of achieving a balanced budget by 2024,” the ministry of finance said.
Saudi Arabia tripled its VAT rate to 15 percent last year to bolster state revenue when oil prices slumped. The UAE and Oman imposed a 5 percent VAT under a common 2018 framework by the GCC. Kuwait and Qatar have yet to implement the tax.
1st phase of mandatory E-invoicing comes into force in Saudi Arabia
Date: 05 Dec, 2021
Riyadh- December 5, 2021:
The first phase of mandatory electronic invoicing (FATOORAH) regulations have come into force in Saudi Arabia on December 4, 2021. FATOORAH project is expected to produce a major positive impact on the Saudi economy by bringing down hidden economic transactions and promoting fair competition.
The first phase of E-invoicing means the complete cessation of using and issuing handwritten invoices. Now onwards, all tax payers are obliged to generate electronic invoices using compliant e-invoicing systems. Manual and hand-written invoices through text editors or number analysis applications will no longer be valid.
The authority lauded its efforts for spreading enhanced awareness amongst taxpayers and their readiness before the implementation date. This enabled private sector establishments to prepare well with the requirements for complying with E-invoicing.
The ZATCA has launched an E-Invoicing detailed guide explaining pertaining terms, categories subject to the E-invoicing regulations and types of transactions.
The second phase of e-invoicing will be implemented on January 1, 2023, to establish integration between E-Systems of taxpayers and the authority’s regulations
Bahrain : 122,842 cases of VAT violations recorded
Date: 29 Nov, 2021
External URL: https://www.gdnonline.com/Details/1014918
Manama- November 29, 2021:
More than 120,000 value added tax (VAT) violations were registered in Bahrain over the last three years.
Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa said that the violations included delays in VAT registration and declaration, failure to transfer payments on time and implement display, pricing and billing rules and regulations .
KSA: The new deadline for filing October monthly VAT returns - Nov 30
Date: 28 Nov, 2021
Riyadh – November 28, 2021:
The Zakat, Tax and Customs Authority has called on taxpayers from the business sector to submit their tax returns for last October month, no later than November 30, 2021. Late returns are subject to penalties between 5 percent and 25 percent of the unpaid tax amount.
Taxpayers can submit their tax returns quickly via the website (zatca.gov.sa).
Taxpayers wishing to obtain more information regarding value added tax can get in touch with the Authority’s office on :
- Their unified number which works 24/7 (19993)
- On Twitter (@Zatca_Care)
- Via e-mail (email@example.com)
- Instant conversations via the authority’s website (zatca.gov.sa)
KSA: ZATCA announces Penalties for E-Invoicing Violation
Date: 24 Nov, 2021
Riyadh – November 24, 2021:
The Zakat, Tax and Customs Authority (ZATCA) have released a list of penalties applicable to taxpayers for non-compliance with the e-Invoicing regulations in the Kingdom of Saudi Arabia (KSA) ( that will go into effect on 4 December, 2021).
For ease of reference the penalties are listed in the table below :
|Non-issuance of E-Inovices or failure to store E-Invoices||5,000 – 50,000|
|Failure to include the QR Code in the simplified tax invoices/Failure to inform ZATCA of any malfunction that hinder the issuance of E-Invoices||Initially, a warning will be sent to the taxpayer. The maximum penalty reach up to 50,000 SAR.|
|Erasing or amending the E-Invoices after issuance||10,000 – 50,000|
3 varied ways to check the status of your submitted request to FTA
Date: 16 Nov, 2021
External URL: https://twitter.com/uaetax/status/1460240322357776390
UAE – November 16, 2021:
Here are 3 different ways in which you can check the status of your submitted request to the Federal Tax Authority (FTA).
- Visit FTA website. Log into the e-services portal. (Enter username and password to log in). Go to your dashboard and check the status of your request.
- Call Center- Get in touch with FTA’s representative by calling 600599994
- Send your queries via email to firstname.lastname@example.org
Oman Tax Authority levies fines on non-compliant taxpayers
Date: 14 Nov, 2021
Muscat – November 14, 2021:
Oman Tax Authority has been summoning non-compliant taxpayers and imposing the applicable penalties on them. In a statement issued online by the Authority it said ” We would like to remind taxpayers that they must submit the VAT returns for the 2nd and 3rd quarters of 2021 within the stipulated deadlines. Failure to do so will attract an applicable fine for non-compliance of the tax law.”
Taxpayers are urged to kindly submit the required returns on time to avoid any fines and penalties that may reach OMR 5,000.
For more information please call: 24746996 or visit the website.
FTA's new procedures for requesting reconsideration and objections to its decisions
Date: 10 Nov, 2021
UAE – November 10, 2021:
The Federal Tax Authority (FTA) has announced the implementation of new procedures for tax registrants who apply to the Authority for a review of their decisions from November 1, 2021.
The procedures relate to applications for reconsideration of or objections to the Authority’s decisions. They include the decisions made by the Tax Disputes Resolution Committee, challenges to procedures or controls for paying by instalment, and the waiving of administrative penalties.
The Authority asserted that any person has the right to submit a request to reconsider any decision provided that the request includes reasons and meets the prescribed conditions, within 40 business days from the date he was notified of the decision. The Authority will review the request and issue a decision, citing reasons within 40 business days from the date of applicant receipt. The applicant will be informed about it within five business days from the date of issuance of the decision.
Additionally, the new amendments allow tax registrants to submit an objection to the Authority’s decision regarding applications of reconsideration to the Tax Disputes Resolution Committee. The objection submitted to the committee will not be admissible:
- If a reconsideration request has not been previously submitted to the Authority.
- If the tax in connection with the objection has not been settled.
- If the objection is not submitted within 40 business days from the date of notification of the Authority’s decision.
Saudi: No plan to cut VAT rate this year
Date: 04 Nov, 2021
Riyadh – November 4, 2021:
Saudi Finance Minister Mohammed Al-Jadaan revealed the Kingdom has no plans to reduce the rate of value-added tax (VAT) in the near future. The decision on VAT will be reviewed after several years as and when when the public finances improve.
Saudi Arabia raised VAT from 5 percent to 15 percent in May 2020 as part of austerity measures to deal with the economic repercussions of the pandemic-hit economy.
Al-Jadaan said the goal of the increased rate of VAT was to deal with the economic repercussions of the coronavirus pandemic. “When the public finances improve after several years, most likely within five years, it will be reexamined, but there will be no VAT cut anytime soon,” he said.
Amendment in Tax Rules for supply of Goods in Designated Zones
Date: 03 Nov, 2021
UAE – November 3, 2021:
The Federal Tax Authority (FTA) has announced that amendment on tax treatment for supply of goods in designated zones and connected shipping or delivery services to avoid VAT double taxation has come into effect as of October 30,2021.
In a statement, the FTA has confirmed the importance of Cabinet Decision No. (88) of 2021 to amend Article 51 of Cabinet Decision No. (52) of 2017 on the Executive Regulation of Federal Decree-Law No. (8) of 2017 on value-added tax (VAT), and said latest move aims to avoid VAT double taxation on supplied goods in the designated zones and facilitate procedures to non-resident suppliers operating in the designated zones, as these goods will be treated —under certain conditions — outside the scope of tax, hence, no tax registration is required from the supplier.
View the newly issued VAT Public Clarification explaining the New Amendment in the Tax Treatment for the Supply of Goods in Designated zones and Connected Shipping or Delivery Services.
H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum Heads 1st Meeting as Chairman of the FTA BOD
Date: 27 Oct, 2021
UAE – October 27, 2021:
His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister, Minister of Finance, and Chairman of the FTA Board of Directors (BOD), chaired the first meeting of the FTA Board.
Furthermore, His Excellency Mohammed bin Hadi Al Hussaini, Minister of State for Financial Affairs, was elected as Vice-Chairman of the FTA Board of Directors during the FTA Board’s third meeting of the year, held on October 20, 2021 at the FTA headquarters in Dubai.
A comprehensive progress report on various ongoing development projects and the FTA’s recent achievements and agenda for the future were deliberated upon. Additionally, the Board approved the Authority’s financial statements for the second quarter that ended on June 30, 2021, in accordance with international accounting standards.
H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum asserted that the Authority will continue its efforts to upgrade its services with a series of developmental plans in line with highest standards. The FTA is committed to offering its full support to business sectors and encouraging Taxable Persons to comply with tax legislation, most notably with the FTA’s advanced and integrated e-Services.
FTA: More than 107.1% Growth in VAT Refund Applications from UAE Nationals on Building New Residences
Date: 26 Oct, 2021
UAE – October 26, 2021:
The Federal Tax Authority (FTA) has processed more than 9,640 requests to recover Value-Added Tax (VAT) incurred by UAE nationals on building their new residences by September 2021 – more than 107.1% growth from the numbers recorded in the first nine months of 2021 compared to the total number of processed requests until the end of 2020. (View the statistics )
The Authority revealed that in the first nine months of 2021, over 4,984 applications from citizens requesting a refund of the VAT they incurred on building their new residences were approved, up from the 3,147 requests completed in 2020, 1,399 applications processed in 2019, and just 110 requests in 2018 – the year the VAT Refund Scheme for UAE Nationals Building New Residences was launched.
FTA Director General His Excellency Khalid Ali Al Bustani attributed the massive growth in the number of citizens benefiting from the Scheme to the efforts the Authority has made with its wide-reaching awareness campaigns since the launch. “FTA will continue to streamline the process for UAE citizens eligible for a VAT refund, allowing them to submit their requests easily on the FTA website,” he asserted. “These upgradations aim to simplify the process of VAT Refund, in line with the UAE leadership’s vision to develop a modern housing system that caters to citizens’ needs and offer them the best quality of life available.”
FTA's NEW Digital Tax Stamp Design - FAQs
Date: 25 Oct, 2021
UAE – October 25, 2021:
The FTA has released FAQS on the new Digital Tax Stamp Design that will replace the existing ones which are presently in use since January 1, 2019, as per Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products.
ZATCA warns Taxpayers against Tax Manipulation Trap by some Twitter accounts
Date: 24 Oct, 2021
External URL: https://saudigazette.com.sa/article/612478
Riyadh – October 24, 2021:
The Zakat, Tax and Customs Authority has asked taxpayers to stay on guard against few Twitter accounts, that claim to help them evade payment of tax. This is either through making zero tax or reducing the amount of tax in an illegal way, which is in violation of the authority’s tax regulations.
The authority has requested taxpayers not to disclose their access data to their electronic portal including the secret code to such false account holders and refrain from dealing with them in any manner.
The authority is willing to raise awareness of taxpayers rights, in line with zakat and tax laws in the Kingdom and at the same time it will continue to take legal action against these misrepresenting accounts.
UAE: FTA calls on Expo 2020 participants to avail VAT refund scheme
Date: 12 Oct, 2021
UAE – October 12, 2021:
Expo 2020 Dubai welcomed 411,768 ticketed visits in its first 10 days since the start of the mega event
Meanwhile, the Federal Tax Authority (FTA) has called on official participants to avail the Value Added Tax (VAT) refund scheme for taxes paid on goods and services connected with Expo 2020 Dubai.
Khalid Ali Al Bustani, Director-General of the FTA, said that the FTA has been cooperating with all relevant authorities to prepare for a smooth implementation of the procedures for the refund of VAT paid on goods and services connected with Expo 2020 Dubai.
Al Bustani stated that the FTA provides a telephone service to facilitate and expedite VAT registration procedures for international participants. The service offers clear instructions and details about the registration requirements. The FTA also processes special VAT refund requests, submitted through the integrated platform office, dedicated to receiving and processing requests by participants not registered for VAT.
The FTA has issued a comprehensive guide for official participants in Expo 2020 Dubai, which addresses the categories of taxes that can be refunded.
- The first category is VAT incurred by official participants on goods and services in direct connection with the construction, installation, alteration, decoration, and dismantlement of exhibition space.
- The second category is the VAT incurred by the official participants on goods and services in direct connection with the works and activities of organizing and operating the official participant’s exhibition space, any presentations and events taking place within the Expo 2020 site.
View the Guide to claim your Refund of VAT Paid on Goods and Services Connected with Expo 2020 Dubai.
ZATCA invites Taxpayers subject to the Withholding Tax to submit Tax Return
Date: 07 Oct, 2021
Riyadh- October 7, 2021:
Zakat, Tax and Customs Authority (ZATCA) invites taxpayers from the business sector subject to the withholding tax in KSA to submit their tax return for last September before October 10, 2021.
Taxpayers need to quickly submit their tax returns through the website to avoid the filing fee for late submissions, which is 1% of the unsettled tax every 30 days since the due date.
Should you need more information about the withholding tax, kindly contact the Authority through the below contact details:
- Unified number (19993) operating 24 hours a week
- Twitter account (@zatca_Care)
- E-mail (email@example.com)
- Instant chats via the website
Bahrain to double VAT rate to 10%
Date: 05 Oct, 2021
Bahrain- October 5, 2021:
The Government of Bahrain is contemplating to double its rate of value-added tax (VAT) to 10 percent, in an effort to curb its large budget deficit and boost state revenue. The Gulf’s smallest economy is seeking ways to cut spending and bring its budget back into balance by 2024, an official close to the government said.
However, it’s still isn’t very clear when the higher VAT rate will be implemented though some news sources cite with effect from January 1, 2022.
This will be the Gulf’s second highest rate after Saudi Arabia tripled its VAT rate to 15 percent last year to bolster state revenue when oil prices slumped during Covid-19. The United Arab Emirates and Oman imposed a 5 percent VAT under a common 2018 framework by the six-nation GCC Council. Kuwait and Qatar are yet to implement the tax.
Click here to view more.
New Services launched by FTA to ease VAT refund process for Emiratis building new residences
Date: 03 Oct, 2021
UAE- October 3, 2021:
The Federal Tax Authority (FTA) has released new efficient services to help UAE nationals claim with ease the Value-Added Tax (VAT) they incurred on their newly built residences.
Different kinds of services are launched to raise the audience’s awareness, provide them with easy access to information and allow direct communications with FTA representatives. The two-way process also allows them to obtain feedback, along with top-quality services.
The initiative includes a weekly interactive virtual workshop, the “Virtual Session”, that brings housing authorities contractors, engineers, and construction experts in the UAE to offer consultations and clarification regarding the VAT refund process, for the benefit of Emiratis.
The new services also involves a “Personal Assistant” service, allowing applicants to book an appointment to directly communicate with FTA employees about the refund process.
For more information click here.
UAE elected vice-president of Belt and Road tax forum
Date: 25 Sep, 2021
UAE- September 25, 2021:
For the second time in a row, the UAE has been elected as Vice President of the Belt and Road Initiative Tax Administration Cooperation Forum (BRITACOF) in its second edition, during the meetings that brought together participants from 57 countries around the globe.
The UAE represented by FTA Director General His Excellency Khalid Ali Al Bustani – was elected Vice President of the Forum for the second time after being elected in the first meeting of the Supervisory Board in China in April 2019.
The Second Belt and Road Initiative Tax Administration Cooperation Forum and the accompanying virtual exhibition discussed ways to collaborate on tax administration coordination between the Belt and Road initiative states. The three-day forum conducted via videoconferencing discussed the opportunities of the digital economy and analyzed ways to build an integrated digitalized tax system.
Click here to view more.
FTA adopts New Design for Digital Tax Stamps
Date: 24 Sep, 2021
UAE- September 24, 2021:
The Federal Tax Authority (FTA) announces the adoption of new features for ‘Digital Tax Stamps’ to be inserted on the packaging of all types of cigarettes, including electrically heated cigarettes and waterpipe tobacco (‘Mu’assel’) sold in local markets.
The new Stamps will replace the existing ones which are presently in use since January 1, 2019, as per Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products.
Decision No. (3) of 2021 for the new design will go into effect on October 1, 2021, to formally adopt the newly redesigned ‘Digital Tax Stamps’.
- The first category of Stamps goes into effect from October 1, 2021 where the Stamps with the red design will be placed on packaging of all types of cigarettes, while those with the purple design will be applied to the packaging of electrically heated cigarettes and waterpipe tobacco, which are authorized for trade in local markets and arrival halls at airports.
- The second category goes into effect January 1, 2022, where the Stamps with the green design would be placed on all cigarette packages, while those with a blue design would be applied to the packaging of electrically heated cigarettes and waterpipe tobacco, which are authorized for trade in duty-free shops in departure halls at airports.
The ‘Digital Tax Scheme for Tobacco and Tobacco Products’ aims to digitally track tobacco products from production and until they reach the end consumer to ensure compliance with the latest and best standards and ensure taxpayers pay the due Excise Tax. The redesign of the stamps is part of FTA continuous improvement plans that aim to enhance FTA procedures, protect consumers from commercial fraud, and combat tax evasion using advanced technological systems.
Click here to view more.
FTA encourages Registrants to Benefit from the Administrative Penalties Redetermination
Date: 23 Sep, 2021
UAE- September 23, 2021:
The Federal Tax Authority (FTA) has called on registrants to take advantage from the administrative penalties redetermination – to be equal to 30% of the total unpaid penalties. View the Cabinet Decision No. 49 of 2021 on Amending Provisions of Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violation of Tax Laws.
The decision outlines 16 types of administrative penalties that have either been reduced or had the method of calculation amended, which came into effect on June 28, 2021, and includes reductions on administrative penalties to help taxpayers meet their obligations.
FTA outlined a set of conditions that need to be met in order to benefit from the redetermination of penalties.
First, the administrative penalty must have been imposed under Cabinet Decision No. 40 of 2017 before June 28, 2021, and that the administrative penalty due were not settled in full until June 27, 2021. Furthermore, the registrant should settle all due payable tax by December 31, 2021, and settle 30% of the total unsettled administrative penalties imposed before June 28, 2021, no later than December 31, 2021.
The FTA indicated that, should the registrant meet all the stipulated conditions, the administrative penalties will be re-determined to equal 30% of the total unpaid penalties that will appear on the FTA’s electronic system after December 31, 2021.
Click here to view more.
UAE: FTA offers 30% discount on unpaid penalties
Date: 15 Sep, 2021
UAE- September 15, 2021:
Tax regulation violators within the UAE can benefit from a 30 percent discount on unpaid penalties as per the recent Cabinet decision, the Federal Tax Authority (FTA) stated.
The liberal move intends to boost the UAE’s global business competitiveness by establishing a tax legislation environment that encourages self-compliance and offers significant support to the national economy.
The Cabinet Decision No. 49 of 2021 on Amending Provisions of Cabinet Decision No. 40 of 2017 outlines 16 types of administrative penalties that have either been reduced or had the method of calculation amended.
The amendments include administrative violations related to the application of Federal Law No. 7 of 2017 on Tax Procedures, Federal Decree-Law No. 7 of 2017 on Excise Tax, and Federal Decree-Law No. 8 of 2017 on Value Added Tax.
ZATCA: 90 Days Left for the Enforcement of E-Invoicing Phase I
Date: 13 Sep, 2021
Riyadh- September 13, 2021:
Taxpayers who are subject to the E-invoicing regulations are urged to start the necessary preparations within their organizations to comply with the requirements of Phase One of E-invoicing ‘FATOORA’ that will be enforced in 90 days.
The authority clarified the requirements of Phase One:
- Stopping the generation of handwritten or typed invoices through text editing software or figure analysis software
- Ensuring the availability of an e-invoicing system or solution that is complaint with the requirements published by the authority.
The requirements to comply also include generating and storing e-invoices with all its elements, including the QR code for simplified tax invoice, the buyer’s tax registration number registered in VAT for the tax invoices, and invoice title in accordance to the generated tax invoice.
Oman Tax Authority and National Center for Financial Information sign a cooperation program
Date: 12 Sep, 2021
External URL: https://bit.ly/3E8RY03
Muscat- September 12, 2021:
Oman Tax Authority and National Center for Financial Information signed a cooperation program for combating money laundering, terrorism financing and tax evasion crimes at the Tax’s premises.
The joint cooperation program aims to coordinate efforts between the parties for the exchange of information, experience and find the best practices towards combating money laundering, terrorism financing and tax evasion crimes. The program also intends to organize training programs and specialized workshops to educate tax payers.
The program was signed by His Excellency Saud bin Nasir Al Shukaily, the Chairman of Tax Authority and Lieutenant Colonel Abdul Rahman bin Amir Al-Kiyumi, the Executive Chairman of the National Center for Financial Information.
KSA: Government to bear VAT on private education services for citizens
Date: 06 Sep, 2021
Riyadh- September 6, 2021:
The Zakat, Tax and Customs Authority has clarified that the government will bear value-added tax (VAT) on private educational services provided to citizens.
The services include tuition fees and other school expenses including the textbooks sold by private and international schools subject to tax and approved by the Ministry of Education.
The authority explained that this was in line with the Royal order to pay for VAT on behalf of citizens benefiting from the private educational services in the state.
Click here to read more.
Qatar: GTA published FAQs related to Transfer Pricing (TP)
Date: 05 Sep, 2021
Qatar- September 5, 2021:
GTA has published a Frequently Asked Questions (FAQ) document on the Transfer Pricing (TP) declaration, Master and Local files on the Dhareeba Tax Portal. The FAQs guide taxpayers on several matters relating to TP compliance, Master file and Local file documentation requirements. Practical examples to illustrate and clarify TP cases are cited throughout the document.
Previously, the GTA issued Resolution No. 4 of 2020, which set forth the various filing thresholds and stated that the filing requirements apply to taxable years beginning on or after 1 January 2020.
The FAQs emphasize on the responsibility and importance of proper and robust documentation as required by the Executive Regulations.
View the FAQs on the Dhareeba tax portal.
Electronic products under AED 30,000 exempted from Dubai customs service fees
Date: 03 Sep, 2021
UAE- September 3, 2021:
As per the Customs notice No. (13/2021) a new service charge exemption is applicable for movement of goods between companies.
The exemption is effective from 14 November 2021. The notice stipulates that Customs declarations with value not exceeding AED 30,000 shall be exempted from relevant Customs services charges.
The provisions of this notice apply to customs declarations in the following movement cases:
- From GCC countries and rest of the world to the local market.
- From the freezones and customs warehouses to the local market.
- From GCC countries and the rest of the world to the freezone and customs warehouses.
- From the local market to GCC countries and rest of the world.
- From local market to the freezones and customs warehouses.
- From freezones and customs warehouses to GCC countries and the rest of the world.
- Temporary admission into the local market from rest of the world, freezones , customs warehouses and GCC countries.
- Transfer within the same freezone.
- Transit between freezones in the Emirate of Dubai
- Transfer between customs warehouses in the Emirate of Dubai
- From customs warehouses to freezones.
- From freezones to customs warehouses.
The notice also reiterates that companies wishing to trade via e-commerce channels must first register on the Dubai Customs’ customer registration system. Additionally, it is clarified that logistics companies wishing to clear goods on behalf of their client companies must also register such clients in the same system.
This is in line with Dubai’s e-commerce strategy, which aims to strengthen Dubai’s position as the global capital of the new economy and global logistics platform for the region and create a flexible business environment.
KSA gears its switch over to E-Invoicing as per ZATCA
Date: 02 Sep, 2021
KSA – September 2, 2021:
The Zakat, Tax and Customs Authority (“ZATCA”) launched the electronic invoicing project (FATOORAH) on August 24, 2021 to bring transparency into the economic transactions and promote fair competition. During the official inaugural ceremony, ZATCA highlighted the importance of the new E-invoicing system for its economy and provided an overview its implementation mechanism.
E-invoicing in KSA is given the deadline of December 4, 2021 for the Generation Phase (Phase I).
- Phase 1 (Generation phase)- Specific criteria are to be adhered to for all invoices, credit notes and debit notes issued by taxpayers in KSA as of 4 December 2021.
- Phase two (Integration Phase)- Additional requirements are to be fulfilled by 1 January 2023, where invoices need to be exchanged with and pre-approved by the tax authority. This warrants changing software currently being used and choosing one that is compliant with ZATCA’s directions.
ZATCA has published a Simplified Guide and Detailed E-Invoicing guide that comprises detailed information the applicability of E-Invoicing to various industries, types of invoices, taxable persons and transactions subject to invoicing and technical guidelines pertaining to E-Invoicing Solution Requirement.
ZATCA has also recently released a list of E-invoicing solutions providers who meet the qualification requirements.
The FATOORAH aims to narrow down disguised and illegal establishments. It will activate the consumer’s role in monitoring and reporting, bringing transparency over the movement of funds, control over crimes and other violations. When implemented accurately, it can alleviate the administrative burden both for businesses and the tax authority.
Contact our Tax Experts for any clarifications.
KSA: Fatoora E-Invoicing Project launched by Governor of Zakat, Tax and Customs Authority
Date: 26 Aug, 2021
KSA – August 26, 2021:
The Zakat, Tax and Customs Authority (ZATCA) launched ‘Fatoora- The e-invoicing project’ which is a mandate in KSA from December 4, 2021.
- The first phase mandates the issuance and filing of tax invoices and the relevant debit/ credit notices electronically
- The second phase will be implemented in a phased manner from January 1, 2023, which will establish the integration of electronic systems for taxpayers and ZATCA requirements.
Speaking at the launch ceremony in the Four Seasons Hotel in Riyadh, ZATCA Governor Eng. Suhail bin Mohammed Abanmi emphasized that the Fatoora project is one of the most ambitious national projects led by the Authority and is a part of their effort to achieve the digital transformation goals outlined in the Kingdom’s Vision 2030. Eng. Abanmi stated that the ‘Fatoora’ project is aligned with the latest developments in the world’s leading economies and will have a tangible impact on the national economy.
He iterated that the project would promote fair competition and significantly contribute toward efforts by several government agencies to combat trade concealment.
The guidelines contain E-Invoicing (FATOORAH) requirements and the detailed technical requirements for taxpayers and E-Invoicing providers. It also includes detailed technical requirements such as invoice specifications and security specifications for the E-Invoicing application.
Click here to read more.
Contact our Tax Experts for any clarifications.
KSA: Deadline extended to 16 February 2022 for business licensing fraud offenders to legalize their status
Date: 24 Aug, 2021
KSA – August 24, 2021:
Saudi Arabia has extended the grace period for business licensing fraud offenders to legalize their status to 16 February, 2022.
The period provides multiple options for violators by exempting those who apply to the Ministry of Trade to request rectification of their legal status from penalties and from paying income tax retroactively.
Dr. Majid Al Qasabi, Minister of Commerce, said the extension reflects the Kingdom’s keenness to provide the opportunity to more businesses to correct their legal status. A number of large and medium-sized firms, whose annual revenues exceeded more than 6 billion riyals, have benefited from the amnesty so far.
Anyone arrested by the ministry for committing a crime or violating the anti-business licensing fraud law before submitting a request to rectify their situation, or whoever was referred to the Public Prosecution, or the competent court, is not exempt.
Violators of the anti-concealment system can rectify their legal status by submitting an application through the Ministry of Commerce website
Applicants will have several options, including:
- Introducing a new legal partner (Saudi or non-Saudi);
- Selling, assigning or dissolving the business;
- Transferring the ownership of the business to a non-Saudi after the latter obtains an investment license;
- A non-Saudi can apply for a distinct residence visa, or an investment license to continue business;
- Apply for final exit.
Saudi Arabia has tightened penalties for business licensing fraud, also known as Tasattur or cover-ups, in which foreign nationals owning businesses in the kingdom use the names of Saudi citizens. A new anti-business licensing fraud regime passed by the Saudi Cabinet seeks to eliminate the shadow economy and includes tough penalties for offenders of up to five years in prison and a fine of up to SR 5 million.
Continue to read more.
Kuwait likely to implement VAT
Date: 23 Aug, 2021
Kuwait – August 23, 2021:
Kuwait will most likely implement the Value Added Tax (VAT) either this year or by next year cites the latest World Bank report on the economies of the member-nations of the Gulf Cooperation Council (GCC).
The World Bank also predicted that the economy of Kuwait will increase by 2.4 percent within 2021; followed by a projected 3.2 percent growth in the next two years — 2022 and 2023.
The projections for Kuwait on the following economic indicators are:
- Real Gross Domestic Product (GDP), percent change: 2.4 in 2021, 3.6 in 2022 and 2.8 in 2023
- CPI inflation rate, percent average: 2.0 in 2021, 2.3 in 2022 and 2.5 in 2023
- Government Revenues, percent GDP: 29.8 in 2021, 31.7 in 2022 and 42.1 in 2023
- Government Expenditures, percent GDP: 52.5 in 2021, 51.0 in 2022 and 50.4 in 2023
- Fiscal Balance, percent GDP: -22.6 in 2021, -19.3 in 2022 and -8.3 in 2023
- General Government Gross Debt, percent GDP: 13.7 in 2021, 27.3 in 2022 and 44.1 in 2023
Click here to view more.
Saudi Arabia: ZATCA releases VAT Guideline for Government Bodies in KSA
Date: 19 Aug, 2021
UAE – August 19, 2021:
The Saudi Zakat, Tax, and Customs Authority (ZATCA) has issued a VAT Guideline for Government Bodies in the Kingdom of Saudi Arabia . To view the guide click here.
The guide is directed towards Saudi Government bodies, with the objective to provide clarifications with respect to the interpretation of Economic Activity for VAT purposes in addition to the VAT treatment of transactions between persons and such bodies. The guideline provides information on the VAT treatment of activities undertaken by these bodies especially those activities that are subject to VAT and those that are outside the scope of VAT.
For further advice on specific transactions visit the official website at zatca.gov.sa which contains a wide range of tools and information to support persons subjected to VAT, as well as visual guidance materials and other relevant information.
Expo 2020 Official Participants are eligible for VAT Refund Scheme
Date: 11 Aug, 2021
UAE – August 11, 2021:
Did you know exhibitors in Expo 2020 are entitled to request for a refund on the VAT expenses incurred on the goods and services related to the exhibition?
FTA introduced a VAT Refund Scheme for Expo 2020 official participants to claim VAT refund incurred on expenses. Expo 2020 is a registered exhibition scheduled to take place in Dubai from 20 October 2020 to 10 April 2021. The official participants include countries and organizations that have received and accepted the official invitation from the UAE to participate in Expo 2020 as an exhibitor.
Cabinet Decision no. 1 of 2020 on the Refund of VAT Paid on Goods and Services for Official Participants in Expo 2020 Dubai replaces the Cabinet Decision no. 1 of 2019, which was issued earlier by the FTA. View the latest guide.
The guide provides guidance for official participants of Expo 2020 on the following:
- The conditions which must be met to be entitled to claim the VAT refund.
- The process to be followed to claim VAT.
- Information required to complete the relevant forms.
Additional details on the registration requirements along with the importing and customs details are also covered in this guide.
These are 5 categories in which vat can be claimable are:
- VAT incurred by the Official Participant on Goods and Services in direct connection with the construction, installation, alteration, decoration and dismantlement of their exhibition space.
- VAT incurred by the Official Participant on Goods and Services in direct connection with the works and activities of organizing and operating the Official Participant’s exhibition space and any presentations and events within the Expo 2020 site.
- VAT incurred by the Official Participant on Goods and Services relating to the actual operations of the Official Participant, provided that the value of each Good or Service for which the Office of the Official Participant makes a claim is not less than AED 200.
- VAT incurred by the Official Participant in connection with all operations, services and activities provided for the purpose of participation in Expo 2020 Dubai, whether located within or outside the boundaries of the Expo 2020 Dubai site.
- VAT incurred on import of Goods for personal use of the Official Participant’s Section Commissioner-General, Section Staff and the Beneficiaries
A few simple steps need to be followed for the refund:
- Log into the FTA account.
- Apply for refund as per the process available in the VAT refund user guide.
- The FTA will review and approve the request within 20 working days.
Contact FTA’s Service Channels:
For registrants in the FTA system:
For non-registrants in the FTA system:
Email : firstname.lastname@example.org
To know more about the procedure of the service click here.
Contact our tax consultants:
Our tax experts can offer you consultancy services in connection with your activities related to Expo 2020. The list includes registration with FTA, eligibility of input tax recovery, VAT returns, submission of VAT refund application and timely completion of respective documentation.
UAE Nationals can request a VAT Refund for a Newly Built Residence
Date: 10 Aug, 2021
Dubai- August 10, 2021:
Did you know that UAE Nationals can request a VAT refund for a newly built building which meets the legal requirements of a new residence?
Emirati nationals have the right to a 5 percent value added tax (VAT) refund when constructing their homes, the Federal Tax Authority (FTA) has stated. FTA has issued VATGRH1 guide on ‘VAT Refund for UAE Nationals Building New Residence‘ to facilitate homeowners on how to claim the refund. It specifies that only UAE citizens have the right to ask for the refund. Also note that the refund option is available only for VAT relating to expenses incurred on the construction of a new residence for themselves or their family members and not for any commercial properties.
The VAT refund is to be claimed after completion of the new building which is ready to use. The owner must file a VAT refund application within 12 months from the date of completion of the newly built residence. Processing can take up to 20 days.
To read more about the VAT Refund Scheme on new construction click here.
Saudi Arabia records highest number of real estate transactions
Date: 09 Aug, 2021
Riyadh – August 9, 2021:
The Saudi Zakat, Tax and Customs Authority registered over 543,000 Real Estate Tax Transactions since its implementation in October 2020. The highest number of tax transactions were reported in Riyadh (125,110), followed by Jeddah (55,680), Buraidah (50,462), Makkah (18,955) and Madinah Al Munawwarah (18,557).
In accordance with the provisions of the Regulating Authority on real estate, the tax is imposed at a rate of 5% of the total real estate value. The tax is to be paid by the seller or disposer of the property and not the buyer.
The market has successfully adapted to this new tax, and this is certainly a positive sign for the real estate market in Saudi Arabia.
FTA records 655 Tax Violations amounting to Dh 71.48 m in Q2-2021
Date: 08 Aug, 2021
Dubai- August 8, 2021:
The Federal Tax Authority (FTA) conducted inspection checks of the local markets in tandem with the Ministry of Economy (MoE), Federal Customs Authority and other authorities.
It is astonishing to know that FTA recorded 655 tax violations amounting to Dh71.48 million in the second quarter of 2021. Around 2.86 million unregistered tobacco products without the Digital Tax Stamp (DTS) stamp were detected by FTA in addition to 202,000 other excise goods which include carbonated, energy and sweetened drinks/beverages.
FTA ramped up these inspections to ensure the compliance with tax procedures and protect consumers from trafficked products that do not adhere to quality specifications stipulated in the UAE.
View the Introductory Guide to E-invoicing issued by GAZT
Date: 03 Aug, 2021
Riyadh- August 3, 2021:
The General Authority of Zakat and Tax has issued an Interactive Guide with Links for taxpayers subject to the E-invoicing regulation. It provides an overview on E-Invoicing, the implementation journey, compliance requirements and process rules covering the implementation phase.
The enforcement of E-invoicing will be mandated from December 4, 2021 and the integration will be done over a period beginning from January 1, 2023. Taxable persons are required to begin generating and storing electronic invoices.
NOTE: Date of enforcement of generation and storing of e-invoices -December 4th, 2021
Fines and penalties – All provisions related to tax invoices in the VAT Law are applicable to electronic invoices including fines and penalties.
Dubai Customs launches Trader Export Report service to enhance compliance and boost revenues
Date: 02 Aug, 2021
UAE- August 2, 2021:
Dubai Customs, in cooperation with the Federal Tax Authority (FTA), launched the Trader Export Report service to help businesses overcome the challenges, enhance compliance and boost their revenues. The new service will help clearance and shipping agents achieve Zero Rating of supply of goods exported within 90 days of export date regardless of the import date.
The service was launched virtually in the presence of Ahmed Mahboob Muabih, Director General of Dubai Customs and Khalid Ali Al Bustani, Director General, FTA, along with Dubai Customs’ executive directors and heads of customs departments and centers.
Traders must meet all the Zero Rating requirements that include owning an exit certificate and relevant commercial documents to prove exportation process, and exporting the shipment within the specified time frame. This service applies to imported goods only that will be exported later and not to goods possessed locally.
The new service will be available on Dubai Trade Portal, and it will apply to certain types of declarations including:
- Import to Local from ROW
- Import to Local from GCC (Statistical Import)
- Import for Re Export to Local from ROW
- Import to CW from ROW
- Transit (ROW to ROW)
- Cargo Transfer from CTO to CH (Different Locations)
*Zero-rated supplies in VAT refers to the taxable supply of goods and services on which VAT is charged at zero rate.
Zero rated VAT and exempted VAT are different from each other. Zero rated VAT in UAE means you must charge VAT at 0 percent to your customers. Exempt VAT means you must not charge VAT.
Qatar: GTA extends transfer pricing filing deadline to 30 September
Date: 26 Jul, 2021
External URL: https://bit.ly/2VbT09w
Qatar- July 26, 2021:
Through Decision No (8) of 2021 issued on 17 June, General Tax Authority (GTA) in Qatar announced an extension to the deadline for submitting a transfer pricing master file and local file for the fiscal year ending December 31, 2020. The filing can be submitted by September 30, 2021, instead of June 30, 2021.
GTA issued transfer pricing regulations effective from January 1, 2020. Under Article (8) of Decision No 4 of 2020, resident entities and permanent establishments of non-resident entities in Qatar must submit transfer pricing documentation in the form of master file and local file if they undertake cross-border transactions and have a turnover of more than Qatari Riyal 50,000,000 (USD 14 million) in the financial year.
The objective of the master file is to provide the GTA with high-level information regarding the global business operations and transfer pricing policies of a taxpayer. The local file is meant to provide detailed transactional information within a certain jurisdiction. The deadline for documentation filing was six months following the end of the fiscal year i.e 30 June 2021.
The extension issued on 17 June is an exception to the provisions of Article (8) and will provide taxpayers with more time to collate their documents. Taxpayers need to ensure that their documentation is robust to support their transfer pricing policies.
ZATCA invites Taxpayers from the Business Sector to submit Value-added Tax Returns
Date: 19 Jul, 2021
UAE- July 19, 2021:
The Zakat, Tax and Customs Authority (ZATCA) has called on taxpayers from the business sector to submit their VAT returns for the month of last June and the second quarter of 2021 AD no later than July 31, 2021.
The Authority urged business sector taxpayers to submit their tax returns online on their website (gazt.gov.sa) in order to avoid the penalties for not submitting the declaration within the prescribed period, at a minimum of 5% and a maximum of 25% of the tax value.
Taxpayers from the business sector wishing to seek more information can contact the Authority in the following ways:
- The unified number for the call center (19993) 24/7
- On Twitter (@Zatca_Care)
- Send an e-mail (email@example.com)
Click here to view more.
Saudi Arabia releases Circular on VAT refund to eligible real estate developers
Date: 17 Jul, 2021
External URL: https://bit.ly/3xIYjM5
UAE- July 17, 2021:
The Zakat, Tax and Customs Authority (ZATCA) has released a Circular No. 2106002 that details the process of registration for real estate developers for the VAT refund incurred in relation to exempt real estate activities.
Click here to view the circular issued in Arabic at the moment.
FTA published an Emailer on the steps for Making Payments through e-Services
Date: 14 Jul, 2021
UAE- July 14, 2021:
Federal Tax Authority (FTA) have circulated an Emailer to Tax registrants on 13 July 2021 elaborating on the Steps for Processing Payments through e-Services.
Click here to download the Circular in pdf version.
ZATCA outlines 3 steps for taxpayers in first phase of E-invoicing
Date: 11 Jul, 2021
Riyadh- July 11, 2021:
The Zakat, Tax and Customs Authority (ZATCA) has highlighted three main steps for taxpayers who are subject to the E-invoicing (FATOORAH) regulation. It outlines the compliance requirements and process rules covering the generation and integration phase. The first phase will be mandated from December 4, 2021 and the integration will be done over a period beginning from January 1, 2023.
The three steps in the first phase are:
- Stop issuing handwritten invoices, or invoices issued manually through text editing softwares
- Use a compliant E-invoicing system to generate and store the invoices electronically, which can be a cash register machine, a cloud system, or an enterprise resource planning software (ERP).
- Additionally, the E-invoices must include all the requirements of a tax invoice. The simplified tax invoices must include a QR code, and the tax invoices must include the VAT number of the buyer (a registered VAT taxpayer).
The Authority aims to gradually introduce the implementation of E-invoicing through well-laid out steps and requirements, and would continue to inform and educate taxpayers who are subject to the E-invoicing regulation.
Oman Tax Authority released a 'VAT Taxpayer Guide'
Date: 07 Jul, 2021
Muscat- July 7, 2021:
The Oman Tax Authority published on its website a ‘VAT Taxpayer Guide‘ to offer guidance to taxpayers on filing their VAT returns. The guide aims to provide a better general understanding of taxpayers’ tax obligations. The document provides a step-by-step overview of the OTA’s VAT compliance expectations pertaining to :
- VAT Registration
- Filing a VAT return
- VAT return payment or refund
- Record Keeping
For more information, please contact the TA:
Oman Tax Authority
P.O. Box: 285, P.C. 100
Telephone: +968 2474 6996
Submit VAT Reconsideration Form to challenge FTA's Decision
Date: 05 Jul, 2021
External URL: https://www.tax.gov.ae/en/e-forms/reconsideration-form
UAE- July 5, 2021:
Businesses that function in the UAE must have thorough knowledge about the Tax Laws in the region. The Federal Tax Authority (FTA) is the Governing Authority that regulates tax laws, tax collections and penalties for non-compliance. A failure to comply with the VAT/Tax regulations will attract heavy penalties.
However, if the businesses are not satisfied with penalties imposed by FTA, they can officially request the Authority to revise it by filing a VAT reconsideration form (as per Article (27) of the Federal Law No. (7) of 2017 on Tax Procedures). This option is to address the grievances of the businesses that are not satisfied with the penalties levied or other decisions imposed on them by the FTA and to get a waiver on the penalties.
The request for reconsideration must be submitted via the FTA’s website within 20 business days from the date of being notified of the decision being reconsidered. The request form must be duly filled in Arabic for submission, otherwise it will be rejected. Along with the application, all the supporting documents and evidence should also be submitted in the Arabic language. You can avail assistance from experienced Tax agents in Dubai to address the language barrier and gain expert knowledge on the tax regulations.
FTA may levy penalties on businesses for the following reasons:
- Failure to file VAT Returns within the time frame
- Delay in settlement of due tax
- Late VAT registration
- Late VAT deregistration
- Lack of proper records or structured documentation
- Submission of erroneous documents/ incorrect information
The UAE VAT reconsideration form can also be submitted when the taxable person disagrees over FTA’s decisions such as VAT rate treatment, exception of registration and other tax assessments.
FTA has set up Taxpayer Support Centers in Dubai and Abu Dhabi
Date: 03 Jul, 2021
UAE- July 3, 2021:
FTA has set up Taxpayer Support Centers in Dubai and Abu Dhabi. These additional contact centers have dedicated staff to respond to all tax related queries and support taxpayers with any issues they may be facing.
Below are the address of the Taxpayer Support Centers:
Central Park Towers, DIFC P2 Floor
Emirates Property Investment Company, Ground Floor.
Saudi Arabia released VAT guideline for Insurance & Reinsurance Activities
Date: 02 Jul, 2021
Riyadh- July 2, 2021:
Zakat, Tax and Customs Authority (ZATCA) issued a guide to throw clarifications on the insurance and reinsurance activities made by businesses and the associated VAT implications. The guide outlines the services that will be recognized under insurance/ reinsurance activities and along with the applicable VAT treatments.
The guide further publishes the implications of insurance claims, reinsurer’s share of claim, principles relating to VAT deductions and partial VAT deductions.
Kindly seek expert advice if you have any doubts on this subject.
Saudi Arabia released Circular on the Reverse Charge Mechanism (RCM) Application
Date: 01 Jul, 2021
Riyadh- July 1, 2021:
Zakat, Tax and Customs Authority (ZATCA) issued Circular No. 2106001 explaining the application of Reverse Charge Mechanism (RCM) in accordance with the unified VAT Agreement of the GCC States and KSA VAT Law. The circular throws clarification on the application of RCM rules to businesses that receive a supply of goods or services from non-resident suppliers.
Reverse Charge Mechanism is defined as the mechanism by which the Taxable Customer is obligated to pay the Tax due on behalf of the Supplier, and is liable for all the obligations provided for in the Agreement and the Local Law. Reverse Charge Supplies refer to Supplies on which the Customer is obliged to pay the VAT due under the Reverse Charge Mechanism
RCM is only due on services which are taxable in nature and received by:
- A VAT Registered Taxpayer from a non GCC resident supplier;
- A taxable customer from suppliers resident in another GCC state (until E-Service System for Intra-GCC supplies is implemented).
This circular is a must read for all taxable persons receiving supplies from non-resident suppliers to ensure that the tax treatment being followed is in accordance with the applicable VAT legislations. View the Circular in English or Arabic.
Kindly seek expert advice if you have any doubts on this subject.
'Zakat, Tax and Customs' Invites Taxpayers to go through the Simplified Guide to Facilitate E-Invoicing (FATOORAH)
Date: 29 Jun, 2021
Riyadh- June 29, 2021:
The Zakat, Tax and Customs Authority requests all taxpayers to go through the simplified guide on the E-Invoicing (FATOORAH) page.
The guide includes the following:
- Requirements for compliance with E-Invoicing (FATOORAH) and the phases of the implementation enforceable as of December 4, 2021.
- Details on the two types of invoices, Standard tax invoice, which is used usually between two VAT registered business, and the Simplified tax invoice, which is used usually between business and customer.
- Explanation on the way E-Invoicing works, and the prohibited functions that taxpayers should avoid when the regulation is enforced.
All taxpayers, solution providers and those interested can send inquiries related to E-Invoicing via:
- The unified number (19993) that works 24/7.
- Twitter account (@Gazt_care).
- E-mail (firstname.lastname@example.org).
- Instant chats via the website (gazt.gov.sa).
Click here to read more.
Oman Tax Authority requests Tax Payers to furnish Transferring Entity details when transferring amounts to Government Accounts
Date: 28 Jun, 2021
Muscat- June 28, 2021:
With reference to the circular of the Central Bank of Oman, dated 22 June, 2021 – all banks operating in the Sultanate are obligated not to deposit / transfer any amounts to Government accounts, without mentioning the details of depositing or transferring entity.
Tax Authority requests all taxpayers to include the details according to the type of tax, when they deposit or transfer any amounts to the bank accounts of the Tax Authority, as depicted in the pdf.
View the Full Circular.
FTA's New Decision Emailer urges Tax Payers to review their Tax Payables and pay Taxes before 28 June 2021
Date: 27 Jun, 2021
UAE- June 27, 2021:
Federal Tax Authority (FTA) released a New Decision Emailer on 25 June 2021 informing tax payers that they can view how much of their balance is related to tax and how much is related to administrative penalties on the My Payments page, after they log into E-Services.
This is with regards to the Cabinet Decision No 49 of 2021 on the Administrative Penalties for Violation of Tax Laws in the UAE.
The link will open a window that includes the details of :
- Tax Payable
- Late Registration Penalty
- Other Penalties Payable
- Net Payable Amount
- Total Credit
Tax payers have to review their My Payments page and ensure the tax is paid before 28 June 2021 in order not to incur new administrative penalties.
FTA would also be launching a full dashboard with Tax Payable and Administrative Penalties Payable as well as outstanding balances in relation to Cabinet Decision 49 of 2021 on 28 June 2021.
Click here to view the New Decision Emailer.
Qatar and Rwanda Signs Double Tax Avoidance Agreement
Date: 25 Jun, 2021
Doha- June 25, 2021:
The State of Qatar and the Republic of Rwanda have signed an agreement to avoid double taxation and prevent financial evasion between the governments of the two countries, at the General Tax Authority’s (GTA) headquarters in Doha.
The agreement was signed by His Excellency Ahmed bin Issa Al Mohannadi, the GTA’s President and His Excellency Francois Nkulikiyimfura, Rwanda’s Ambassador to Doha, in the presence of His Excellency Ambassador Abdulrahman bin Mohammed Al Dosari, Director of African Affairs Department at the Ministry of Foreign Affairs.
The agreement aims to eliminate double taxation between the two countries, solve obstacles that may restrict the movement of capital and encourage trade exchange, increase investment opportunities and enhance international standards of transparency through the exchange of documented financial information.
Click here to read more.
GTA Extends Corporate Income Tax deadlines for Qatari companies (Aug 31) and Non-Qatari companies (Jun 30)
Date: 24 Jun, 2021
Doha- June 24, 2021:
General Tax Authority (GTA) announced the extension of 2020 corporate income tax filing deadlines to:
- June 30, 2021 for foreign companies (Non-Qatari companies that have a foreign partner’s share)
- August 31, 2021 from June 30 for tax-exempt companies and permanent establishments owned by Qatari citizens and Gulf Cooperation Council (GCC) citizens
This came in light of the difficult circumstances prevalent in the country due to the epidemic, and in an attempt by the authority to enhance tax compliance and lessen the burdens on taxpayers.
The agency announced that simplified tax filing forms must be submitted by companies with capital of less than 1 million Qatari Riyal (US$274,725) and with annual revenues of less than 5 million Riyal (US$1.3 million).
Click here to read more.
FTA organizes a blood donation campaign to strengthen the values of social responsibility in employees
Date: 22 Jun, 2021
UAE- June 22, 2021:
The Federal Tax Authority (FTA) conducted a blood donation campaign on June 14, 2021 in collaboration with the Abu Dhabi Blood Bank and the Dubai Health Authority under the 2021 World Blood Donor Day slogan, “Give Blood and Keep the World Beating”. The Authority plans to strengthen its activities in areas of social responsibility and support voluntary activities, emphasizing the importance of blood donation as a humanitarian initiative. A large number of donors took part and donated their blood.
His Excellency Khalid Ali Al-Bustani, Director General of the FTA, said “The blood donation campaign had seen wide participation from the staff members to support the community. The noble act saves millions of lives worldwide and ensures patients and accident victims have adequate blood supplies when in need of transfusions”.
His Excellency concluded that “Humanitarian acts are the most fundamental principles of community-building and the FTA is keen to organize more corporate social responsibility events.”
Click here to read more.
UAE Federal Tax Authority launches smart app to help consumers detect non-compliant tobacco products
Date: 17 Jun, 2021
UAE- June 17, 2021:
As part of its ongoing efforts to protect consumers from commercial fraud and combat tax evasion with various mechanisms, the Federal Tax Authority (FTA) of the UAE has launched an innovative smart application for consumer’s use. This latest technology allows consumers to scan the digital tobacco products and detect illegal products so that they can be reported to the FTA through the application.
The application has been launched under the banner, “Monitor yourself, fight fraud”. The users can install the app, known as ‘FTA DTS’, on their smartphones via the Apple Store and Google Play.
The FTA explained that the application enables consumers to scan the stamps placed on the tobacco packages or tobacco products to verify and ensure that it is an Authority accredited digital tax stamp. Should the consumer discover that the stamps are not accredited, they can file a report to the FTA directly from the smart application. The Authority will then cooperate with the relevant authorities to take legal actions against violators.
Read more to know the objectives and method to use the Smart App.
Read more about the Digital Tax Stamp Scheme
Get your queries addressed by our tax experts.
FTA's first tax agent virtual session introduced the latest developments regarding the tax legislative environment
Date: 16 Jun, 2021
External URL: http://wam.ae/en/details/1395302943574
UAE- June 16, 2021:
The Federal Tax Authority (FTA) has confirmed during its first tax agent virtual session of 2021 that Cabinet Decision No. 49 of 2021 (New Resolution), amending provisions of Cabinet Decision No. 40/2017 (Old Decision) imposed for the violation of Tax Laws in the UAE provides relief as a measure to support businesses and allows the re-determination of unpaid due administrative penalties which were imposed on taxable persons before 28th June, 2021.
The FTA organised the virtual session to introduce the latest developments regarding the tax legislative environment. The session was attended by 268 authorised tax agents, FTA representatives and officials. A detailed presentation on the implementation of the new decision was showcased, in addition to the conditions required to benefit from the new decision.
Cabinet Decision No. 49 of 2021 states three conditions that need to be fulfilled for tax registrants to benefit from the re-determination of unpaid administrative penalties to be 30 percent of the value due on 28th June 2021.
- The first condition is that the administrative penalty must be imposed under Cabinet Decision No. 40 of 2017 on the Administrative Penalties for Violating Tax Laws in the UAE before 28th June, 2021, which is the effective date of the new decision, and remain outstanding on such date.
- The second is the tax registrant must settle all payable tax by 31st December, 2021.
- The third is that Tax registrants must pay 30 percent of administrative penalties payable and unsettled by 28th June, 2021, on or before 31st December 2021.
Should the registrant meet all these conditions, the FTA will re-determine (after 31st December 2021) the unsettled payable administrative penalties due on 28th June, 2021, to be equal to 30 percent of such unsettled penalties. This will exonerate the tax registrant from paying the remaining 70 percent and the relief will be applied automatically when the three conditions are fulfilled.
FTA representatives also gave an overview of the 16 violations and administrative penalties which have been amended either in value or in the calculation method. During the session, various queries raised by tax agents about the amendments of administrative penalties were clarified.
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FTA releases Cabinet Decision No. 49/2021 - Amendments of Penalties for Violation of Tax Laws in the UAE
Date: 10 Jun, 2021
UAE- June 10, 2021:
The Federal Tax Authority (FTA) has revised the tax penalties by issuing Decision No. 49/2021 (New Resolution), amending provisions of Cabinet Decision No. 40/2017 (Old Decision) imposed for the violation of Tax Laws in the UAE. Prior to the issuance of the New Decision, taxpayers were faced with heavy penalties for non-compliance under the regulations. Although the penalties imposed under the previous Cabinet Resolution were to reduce non-compliance and to be more compliant with the law, these always posed a heavy burden on taxpayers.
As per Cabinet Decision No. 49/2021 amendments of penalties for violation of tax laws aims to support registrants in fulfilling their tax obligations.
Kindly note the following:
- The Decision will go into effect starting from 28 June 2021.
- The Decision reduces many administrative penalties imposed on the violation of tax laws post 28 June 2021.
- The Decision allows registrants who have been penalized prior to the effective date of the Decision to benefit from a penalty redetermination scheme, where they would only be required to settle 30% of their payable administrative penalties outstanding on 28 June 2021 subject to meeting the requirements specified in the Decision.
In order to benefit from the penalty redetermination scheme, the FTA urges registrants to settle all pending tax until 31 December 2021 and 30% of the total administrative penalties imposed and outstanding on 28 June 2021, no later than 31 December 2021.
For more details, please click the links below.
UAE and Israel Sign Tax Treaty
Date: 06 Jun, 2021
UAE- June 6, 2021:
The UAE and Israel signed a tax treaty on 31st May, 2021 in order to avoid double taxation. This will help promote bilateral trade, boost economic cooperation and investment in years to come. The tax convention, once ratified by ministers and parliament this year, will come into effect on January 1, 2022.
The move comes following the peace deal between Israel and the UAE to spur business development between the countries after they normalised relations last year in August 2020.
According to the Israeli Government’s announcement, the treaty is based on the Organisation for Economic Co-operation and Development Model Tax Convention on Income and on Capital (OECD Model) and covers areas including double-taxation, non-discrimination, exchange of information and anti-avoidance.
The introduction of the tax treaty will enable further influx of investment and trade between the two countries, in line with the aim to unlock economic potential in the region.
Click here to read more.
FTA releases two new Public Clarifications on amendments to administrative penalties and redetermination of some penalties already imposed
Date: 30 May, 2021
UAE- May 30, 2021:
As part of its ongoing awareness-raising efforts, the Federal Tax Authority (FTA) has issued two new detailed public clarifications that aim to familiarize persons with simplified explanation on tax aspects, enabling them to apply the tax principles accurately.
The first public clarification outlines the fundamental amendments to the table of administrative penalties, in order to ensure certainty of the correct application of these amended penalties.
Click here to view the Tax Procedures Public Clarification- Amendments to the Penalties Regime
The second public clarification details the mechanism used to re-determine some administrative penalties that were imposed before the effective date of the new amendment on June 28, 2021. This decision is applicable on all administrative penalties imposed whether in respect of tax procedures, VAT or Excise Tax.
For any queries you may contact our Tax Experts.
UAE reduces penalties for various tax law violations
Date: 29 May, 2021
UAE- May 29, 2021:
The Federal Tax Authority (FTA) announced a relief to businesses by reducing penalties to facilitate them in filing an accurate tax return.
Sixteen types of administrative penalties for violation of tax laws in UAE have either been reduced or had the method of calculation amended under the latest initiative in line with Cabinet Decision No. 49 of 2021. The decision is designed to support tax registrants and help them fulfill their tax obligations.
Khalid Ali Al Bustani, director-general of FTA, said the new amendment will become effective on June 28, 2021, and will reduce many administrative penalties imposed for violating tax laws. He said late payment penalty will not be imposed on voluntary disclosures if payment is settled within 20 business days of submitting the voluntary disclosure.
“This comes as part of the wise leadership’s directives to implement the tax system according to the best standards that ensure further growth for the national economy and help achieve transparency and economic momentum. This provides a resilient tax legislative environment that encourages self-compliance and keeps pace with change through constant issuance of decisions in accordance with phased requirements,” Al Bustani said.
The FTA director-general called on tax registrants to take advantage of the important benefits provided by the new amendment as it provides more relief to business sectors in order to support their effective contribution to boosting the national economy’s growth.
Click here to read more.
For any queries you may contact our Tax Experts.
FTA recognizes persons or group's right to apply for a reduction or exemption for tax law violation penalties
Date: 28 May, 2021
UAE- May 28, 2021:
The Federal Tax Authority (FTA) has announced that any person or group has the right to apply to the FTA to reduce or exempt them from the penalty imposed for the violation of the provisions of tax legislation, provided that there is an excuse acceptable to the FTA. It must supported by evidence that justifies the existence of the excuse and the violation that led to the imposition of administrative penalties.
The FTA clarified that according to Cabinet Decision No. 51 of 2021 on amending the Executive Regulation of Federal Law on Tax Procedures, any person or group who is found to have violated the provisions of the tax law may submit such a request to the FTA to reduce or exempt from the penalties in accordance with a set of conditions. The FTA must be notified of the request within 40 business days from the end of the acceptable excuse. Also, the person must prove that the violation has been corrected, and the application for exemption or reduction is submitted in accordance with the form specified by the FTA.
The FTA confirmed that, according to the amendments that came into effect on 28 April 2021, an excuse shall not be considered acceptable if the act that led to the violation was deliberate. An excuse can only be deemed acceptable based on a decision made by a tripartite committee formed by the Director-General of the FTA. This committee will study the excuse and accept or reject it, and will issue its decision to reduce or exempt administrative penalties within 40 business days from the date of receiving the application. Applicants shall be notified of this decision within 10 business days from the date of its issuance.
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Cabinet Approves Double Taxation Agreement Between UAE and Jamaica
Date: 25 May, 2021
UAE- May 25, 2021:
Cabinet has given approval for the Double Taxation Agreement between the United Arab Emirates (UAE) and Jamaica. This would eliminate double taxation with respect to taxes on income and the prevention of tax evasion and avoidance.
Jamaica Minister of Education, Youth and Information, Hon. Fayval Williams disclosed the update on May 19 during the post-cabinet press briefing at Jamaica House in St. Andrew.
She said the general objectives of the bilateral tax agreement are to provide full protection of taxpayers against double taxation and to allow for the free flow of international trade or cross-border transactions and the transfer of technology. It will prevent discrimination between taxpayers in the international field and provide a reasonable element of legal and fiscal certainty as a framework within which international operations could be pursued. She noted that the agreement fosters cooperation between the tax authorities in the UAE and Jamaica, enabling them to execute their duties more effectively.
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FTA releases VAT Payment User Guide for Commercial Property Buyers
Date: 24 May, 2021
Dubai- May 24, 2021:
FTA releases a VAT Payment User Guide for Commercial Property Buyers.
The guide is prepared to help persons who are buying or selling a commercial property which is subject to VAT in the UAE to complete their VAT payment on the FTA’s eServices portal. This process will be completed as a miscellaneous payment.
Kindly note that this guide is only applicable to sales of commercial property which are subject to VAT at 5%.
Therefore, it does not apply to:
- Any sales or leases of residential property;
- Leases of commercial property; and
- The sale of a commercial property with the benefit of sitting tenants to a buyer who is a Taxable Person which qualifies as the transfer of a business.
Click here to view the guide.
For any queries you may contact our Tax Experts.
UAE expats can send relief material to India without tax
Date: 16 May, 2021
Dubai- May 16, 2021:
The UAE expatriates can send Covid-related relief material to India without paying customs duty. The Ministry of Finance issued a notification on May3 exempting customs duty, integrated goods and services tax (IGST) and/or health cess on the import of a number of relief materials till June 30, 2021.
The government at the centre said it received a number of representations from charitable organizations, corporate entities, and other associations outside India seeking exemption from IGST on the import of Covid-19 relief material donated or received free of cost from outside India for free distribution. The relief items are already exempted from customs duty till June 2021.
Earlier, the government had also exempted the basic customs duty and health cess on certain Covid-19 related supplies, namely Remdesivir injections or active pharmaceutical ingredients (API), Beta Cyclodextrin and inflammatory diagnostic kits till October 31 and medical grade oxygen, cryogenic transport tanks, other oxygen therapy-related equipment and vaccines till July 31. The new ruling is beneficial for local community groups, businesses and individual expatriates who are keen to supply relief materials to India.
Click here to read more.
FTA released a decision on 'The Mechanism for Calculating the Average Retail Selling Price of Excise Goods in the Market'
Date: 10 May, 2021
Dubai- May 10, 2021:
In order to calculate the average retail selling price of the excise goods in the market, the FTA has released a decision approved by the Board of Directors’ at its 15th meeting held on 20 April 2021.
For the purposes of Clause 2 of Article 14 of Cabinet Decision No. 52 of 2019, a Taxable Person shall undertake the procedures outlined in the document for the purpose of identifying the Designated Retail Selling Price as per the sequence mentioned.
Click here to view the Federal Tax Authority Decision No. 1 of 2021 (Unofficial translation) – Issued on 28th April 2021.
UAE reduces penalties on VAT, excise tax to cope with Covid-19 impact
Date: 09 May, 2021
Dubai- May 9, 2021:
The UAE has reduced penalties on value-added tax (VAT) and excise tax in order to help companies and individuals better cope with the impact of the Covid-19 pandemic. According to newly-released Cabinet Decision No. 49 of 2021, tax payers who currently have penalties pending can see those reduced to 30 per cent, provided they settle them before December 31, 2021.
Going forward, late payment penalties will be reduced to four per cent per month, a substantial reduction from one per cent per day while an overall cap stays at 300 per cent.
The new provisions will be applicable 60 days as from April 28, 2021.
For more information click here.
For any additional queries contact our tax experts.
FTA releases New Public Clarification on VAT registration of Sole Establishments
Date: 08 May, 2021
Dubai- May 8, 2021:
The FTA (Federal Tax Authority ) issued guidance on the value added tax (VAT) registration for sole establishments and sole proprietorships.
A natural or legal person may own a number of sole establishments. There has been uncertainty on whether each sole establishment needs to obtain a separate VAT registration or whether all such establishments should be included under one VAT registration. The Public Clarification released clarifies the VAT registration obligations of a person in respect of its sole establishments.
A person owning a number of sole establishments should obtain only one VAT registration for all its sole establishments, and it is not permissible to register each sole establishment separately for VAT.
This does not apply to a one-person company LLC or other similar legal entities that are seen as distinct and separate legal persons from their owners.
The FTA will review in certain cases the VAT registrations by taxable persons in respect of sole establishments and will inform them of the corrective steps to be taken, if any.
JAFZA extends deadlines for submission of the Notification form and ESR
Date: 06 May, 2021
Dubai- May 6, 2021:
The Jebel Ali Free Zone (JAFZA) released revised closing dates for the submission of Notification and Economic Substance Report (ESR) by businesses under the Economic Substance Regulations. The Regulations require UAE onshore and free zone companies and certain other business forms that carry out relevant activities to submit the annual Notification form and ESR to their relevant regulatory authority.
JAFZA has extended these deadlines for firms falling under its purview. The revised deadlines are six months after the financial year-end for the Notification Form and 12 months after the financial year-end for ESR. However, business are requested to file documents on the portal of the Ministry of Finance as soon as possible and not wait until the deadline, to avoid any compliance penalties and fines.
If you require advice on document submissions or other compliance with ESR regulations, you may get in touch with our tax experts.
|Financial year-end||Notification filing deadline||ESR filing deadline|
|March 31, 2020||January 31, 2021 (extended deadline)||March 31, 2021|
|April 30, 2020||January 31, 2021 (extended deadline)||April 30, 2021|
|May 31, 2020||January 31, 2021 (extended deadline)||May 31, 2021|
|June 30, 2020||January 31, 2021 (extended deadline)||June 30, 2021|
|July 31, 2020||January 31, 2021||July 31, 2021|
|August 31, 2020||February 28, 2021||August 31, 2021|
|September 30, 2020||March 31, 2021||September 30, 2021|
|October 31, 2020||April 30, 2021||October 31, 2021|
|November 30, 2020||May 31, 2021||November 30, 2021|
|December 31, 2020||June 30, 2021||December 31, 2021|
|January 31, 2021||July 31, 2021||January 31, 2022|
|February 28, 2021||August 31, 2021||February 28, 2022|
|March 31, 2021||September 30, 2021||March 31, 2022|
|April 30, 2021||October 31, 2021||April 30, 2022|
|May 31, 2021||November 30, 2021||May 31, 2022|
|June 30, 2021||December 31, 2021||July 31, 2022|
Bahrain: NBR releases guide on VAT Agent / VAT representative
Date: 06 May, 2021
Bahrain- May 6, 2021:
National Bureau for Revenue (NBR) in Bahrain published a guide in April 2021 on VAT agent or VAT representative.
A VAT agent is a person who is authorized by the NBR to act as an agent on behalf of a VAT payer in his name and on his behalf in relation to the VAT payer’s compliance obligations. It is a voluntary appointment by the tax payer subject to the agent being authorized by NBR.
Non-resident VAT payers who are obliged to register for VAT in Bahrain have the option to appoint a VAT representative. A VAT representative replaces the VAT payer and becomes responsible for all the VAT payer’s obligations towards the NBR.
The VAT Agent / VAT Representative Guide provides guidance and further clarification to those who would like to become a VAT Agent or Representative in Bahrain and the the criteria that must be met. Any person who is interested in becoming a VAT agent or VAT representative should go through this Guide to understand the conditions and the procedure that must be followed.
The guide provides an overview of
- The requirements for obtaining NBR’s approval for getting registered as VAT agent/representative.
- Rules and procedures for VAT payer to appoint a VAT agent/representative.
For any queries reach out to our tax experts.
Saudi Arabia to reconsider VAT upon GDP growth
Date: 04 May, 2021
Riyadh- May 4, 2021:
The Kingdom of Saudi Arabia will reconsider value-added tax (VAT) after it has achieved certain objectives related to its economy and economic growth, a senior official has said.
The decision to increase VAT from 5 % to 15 % from July 1, 2020 was taken by the Saudi government in response to the economic impact of Covid-19 and the decline in revenues from lower oil prices. The Minister of Finance Mohammed Al-Jadaan has said that tripling value-added tax (VAT) to 15% was the best among the tough choices the government took during 2020.
He affirmed that taxes are an essential part of non-oil-dependent countries, indicating that the government’s goal is to expand the economy to reduce the economic burden, off the shoulders of their nationals or the private sector.
“Saudi Arabia will reconsider the value-added tax upon achieving certain objectives, such as the Kingdom’s gross domestic product (GDP) growth, economic broadening, and a steady rise in oil price,” Al Jadaan said.
Click here to read more.
Zero VAT for transportation of goods and services in Oman’s special zones
Date: 04 May, 2021
Muscat- May 5, 2021:
SEZAD and free zones in Salalah , Sohar, and Al Mazunah are classified as Special Zones and the supply and transportation of goods and services are zero-rated of VAT.
The Public Authority for Special Economic Zones and Free Zones ( OPAZ ) said, ‘The Special Economic Zone at Duqm ( SEZAD ) and the free zones in Salalah , Sohar and Al Mazunah are classified as Special Zones in accordance with the provisions of Article ( 102 ) of the Executive Regulations of the Value Added Tax ( VAT ), issued in the Decision No ( 2021/53 ). This announcement comes post the coordination with the Tax Authority in regards to the implementation of VAT.’
In accordance with the conditions specified in the Article ( 103 ) of the regulations, all these special zones are subject to 0 % tax.
Therefore, OPAZ calls on all companies, enterprises, businesses and establishments operating in these zones to comply with the conditions stipulated in the VAT Executive Regulations, until the Tax Authority of Oman publishes detailed procedures for the purposes of applying VAT at a rate of zero percent in the Special Zones. These conditions include VAT Registration and VAT Administration.
UAE ranked among the top 10 in 28 competitive indicators for the financial and tax sector
Date: 03 May, 2021
External URL: https://wam.ae/en/details/1395302931770
Abu Dhabi- May 3, 2021:
Five of the major international institutions specialized in assessing competitiveness have ranked the UAE among the top 10 in the world in 28 indicators of competitiveness in the financial and tax sector.
This was highlighted by a report by the Federal Competitiveness and Statistics Centre (FCSC), which documented the rankings of the IMD World Competitiveness Yearbook, the Legatum Prosperity Index, the World Economic Forum’s Travel and Tourism Competitiveness Report, the Global Talent Competitiveness Index (GTCI) and the Global Competitiveness Index 4.0. The report states that the UAE was ranked first in the Real Personal Taxes Index, the Collected Personal Income Taxes Index, the Low Tax Evasion Rate Index, the Collected Indirect Tax Revenues Index, the Lack of Wastefulness in Government Spending Index and the Best Time to File Tax Returns Index.
The UAE was also ranked second globally in the areas of corporate tax collection, real increase in government expenditures, and collection of capital and real estate taxes, while it was ranked third in the areas of intergovernmental transfers, local central governmental debt and rate of low consumption taxes.
In early January 2018, the UAE implemented VAT at 5% on most goods and services that are supplied at every stage of the supply chain. Prior to that in 2017, an excise tax was applied to restrict the consumption of substances that affect health such as tobacco products and energy drinks.
At a time when many countries of the world tend to increase taxes on personal and corporate profits, the UAE ranked first in the world in the absence of income taxes and low rates of tax evasion which strengthens its eligibility to attract foreign investment.
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FTA releases Real Estate Guide
Date: 02 May, 2021
Dubai- May 2, 2021:
Federal Tax Authority (FTA) releases ‘Real Estate Guide‘ that throws guidance on the VAT treatment of supplies of real estate, as well as various common transactions which occur within the real estate sector. The purpose of the document is to provide guidance on how VAT affects businesses which operate within the real estate sector, as well as for owners or landlords of real estate.
This document is meant for owners of commercial and residential real estate, landlords making supplies of commercial or residential real estate, and businesses operating within the construction industry, or making supplies which relate to real estate. Property managers and owners’ associations may also find this guide useful.
Saudi Arabia has no plans to introduce income tax: Crown Prince Mohammed Bin Salman
Date: 29 Apr, 2021
Riyadh- April 29, 2021:
Saudi Arabia has no plans to introduce income tax and the 15 percent VAT rate is a temporary decision for 5 years, Crown Prince Mohammed Bin Salman said in a TV interview. He also spoke on plans to eventually reduce the VAT rate, iterating that the move to increase the rate to 15 percent was a painful decision that he had to undertake.
In a wide-ranging TV interview to mark the fifth anniversary of the Saudi Vision 2030 strategy, the Crown Prince spoke about the Kingdom’s economic plans, developments and achievements made since the launch of Vision 2030, which aims to diversify the Kingdom’s economy without reliance on oil.
The Crown Prince explained figures related to housing policies, legislation and the private sector’s contribution to the Kingdom’s economy, reviewing many economic figures, most notably the growth reflected in the Saudi stock market index.
Speaking of the future, Mohammed bin Salman said “We would launch vision 2040 after achievement of goals of vision 2030. He also revealed that the Kingdom is in discussions to sell 1 percent of state oil firm Saudi Aramco to a leading global energy company. Aramco previously sold a sliver of its shares on the Saudi bourse in December 2019, generating $29.4 billion in the world’s biggest initial public offering.
Click here to read more.
UAE participates in 113th meeting of GCC Financial and Economic Cooperation Committee
Date: 28 Apr, 2021
External URL: http://wam.ae/en/details/1395302928924
Abu Dhabi- April 28, 2021:
Obaid Humaid Al Tayer, Minister of State for Financial Affairs, participated in the 113th meeting of the GCC Financial and Economic Cooperation Committee, held virtually on April 22, 2021 and discussed strengthening financial and economic cooperation among GCC countries.
The Committee discussed the recommendations submitted by the GCC Committee of Monetary Authorities and Central Banks Governors during the 76th meeting; the 25th meeting of GCC Customs Union Authority; and the Gulf Market Committee at its 30th and 31st meetings.
Also discussed were the minutes of the 8th meeting of Committee of Heads and Directors of Tax Administrations in the GCC States; the budget for supporting joint activities and programmes to develop youth work in the GCC countries; and the G20 Finance Track’s initiatives that can be issued to the GCC countries. That, in addition to the decisions of the 41st Session of GCC Supreme Council and the decisions of the 21st meeting of the GCC Ministerial Committee of following up the implementation of the GCC Joint Work Decisions.
The committee reviewed the GCC Supreme Council’s decision on agreeing on a system of linking payments in the GCC countries; discussing the programme on achieving economic unity among the GCC countries by 2025; and discussing the issues proposed to the International Monetary Fund (IMF), which they will study and submit at the joint meeting of the GCC Financial and Economic Cooperation Committee, the GCC Committee of Governors of Monetary Institutions and Central Banks and the Director-General of the IMF.
It also reviewed the latest developments related to the GCC-Takamul system, which is an electronic gateway for complaints and enquiries related to the Gulf Common Market. The committee praised its experimental launch among the GCC countries, and asked member countries to provide the data of those in charge of the system in the ministries of finance to the General Secretariat. The official launch of the system will take place during the next meeting of the GCC Financial and Economic Cooperation Committee in October 2021.
Click here to read more.
FTA collects tax liabilities worth AED74 million in Q1-21
Date: 27 Apr, 2021
External URL: http://wam.ae/en/details/1395302930003
Abu Dhabi- April 27, 2021:
The Federal Tax Authority (FTA) has conducted more than 2,707 field inspection visits through 35 inspection campaigns across UAE markets in the first quarter of 2021 (Q1-21). This is as part of its ongoing efforts to protect consumer rights and increase the level of tax compliance.
FTA revealed that 256 VAT violations were detected and 248 violations with a total value of AED74 million during Q1.
FTA Director-General, Khalid Ali Al Bustani, confirmed that the sophisticated, cutting-edge tools adopted by the authority during inspections enable teams to accurately carry out their tasks through the latest field electronic mechanisms which correspond to best practices. This contributes to tightening controls on UAE markets to prevent the sale, circulation, and stockpiling of products that have not fulfilled their Excise or VAT obligations.
One of these tools is the mandatory marking of tobacco and tobacco related products which came into effect on 1st January, 2019. It specified the requirement to place Digital Tax Stamp (DTS) on cigarette packs and tobacco products, including water-pipe tobacco and electrically heated cigarettes, after registering them in the FTA database. Each DTS contains data that can be read with a special device to ensure all taxes due on the products have been paid.
Al Bustani added, “The tax compliance rates that have been observed in the outcomes of the inspection campaigns carried out in the first quarter of 2021 highlight the success of the authority’s oversight efforts carried out in cooperation with the competent entities.”
Click here to read more.
Oman: Companies require certificate to collect VAT from customers
Date: 26 Apr, 2021
Muscat- April 26, 2021:
All companies in Oman need to have a certificate of registration from the Tax Authority before charging customers value added tax (VAT) for goods and services. Those who do add the 5 percent VAT charge to customers without this certificate would be subject to penalties under the law.
According to an official at the organization, this is for all commercial enterprises including SMEs that offer goods or services subject to VAT. If owners of establishments that are not registered with the authority purchase goods from suppliers who have imposed VAT on them, they must retain all of the invoices of goods received, inclusive of VAT prices. The business must then register with the Tax Authority to obtain the registration certificate and commit to submitting tax declarations on time added the official.
VAT at the rate of 5 percent came into effect in Oman on April 16, 2021. The first round for companies to register for VAT took place between February 1 and March 15, 2021.
Although this period has elapsed, companies are required to register themselves in the second duration- April 1 to May 31, 2021.
Click here to read more.
Complete VAT guidance on the tax portal of Sultanate of Oman
Date: 25 Apr, 2021
External URL: https://tms.taxoman.gov.om/portal/vat-tax
Muscat- April 25, 2021:
Oman Tax Authority has released guides on online registration and a list of most asked questions on VAT on their portal.
- VAT Law Translation
- VAT Regulation unofficial english version
- VAT Registration Application – For Resident no CRN
- VAT Registration Application – For Non Resident
Manual Guides and FAQ’s
- VAT – Individuals – FAQ
- Information Sheet
- VAT – Business – FAQ
- Determining Food Items subject to Value Added Tax at Zero Rate
- Determining the Mandatory and Voluntary Registration Thresholds
- Determining the VAT Registration due Dates and Effective Dates
- VAT Transitional Registration Guide
- VAT Registration Manual Guide – Persons with CRN
- Guide on VAT Non Resident Application
Click here to view the guides.
FTA holds 3 interactive sessions in Q1-21 as part of “Tax Clinic” initiative for SMEs
Date: 22 Apr, 2021
Abu Dhabi – April 22, 2021:
The Federal Tax Authority (FTA) has held 3 interactive sessions via video conference, as part of the “Tax Clinic” initiative, a policy of direct communication with business sectors to promote tax awareness and avoid the most common errors while implementing tax procedures.
The awareness sessions held in Q1 of 2021focused on the small and medium enterprise (SME) sector. Teams of tax analysts and experts from the FTA’s Registration and Taxpayer Services Departments answered the inquiries of business representatives from across the emirates. The inquires were about tax registration and obligations. They also raised awareness of how to submit returns and pay tax dues without errors.
His Excellency Khalid Ali Al Bustani, Director-General of FTA, emphasized that the FTA is committed to ensure the security and safety of its employees and clients. It maintains constant interaction with those involved in the tax system by organizing webinars and meetings with its partners in the government/private sectors via video conference to adhere to social distancing norms imposed by Covid-19.
Click here to read more.
New edition of the ‘Basic Tax Information Bulletin’ on the Automotive sector
Date: 21 Apr, 2021
Abu Dhabi – April 21, 2021:
The Federal Tax Authority (FTA) has announced in its latest edition of the Basic Tax Information Bulletin that motor vehicle repairs and maintenance services provided within the UAE are subject to VAT at the standard rate of 5%. This applies even if the costs are charged to an entity based outside the UAE. The new edition mainly targets businesses in the automotive sector, including new car dealers, used car dealers, and servicing and parts’ suppliers.
With regard to repair services and parts provided under a warranty, the FTA clarified that VAT is applicable on the sale of vehicles under warranty and warranty packages purchased separately by the customer. Any subsequent supply of repair services and parts to the owner of the vehicle under warranty is not subject to VAT, provided no additional amount is charged in respect of the repair service or parts.
As per the Bulletin, businesses in the automotive sector making taxable supplies are eligible for the full recovery of input VAT, with the exception of blocked items such as certain entertainment services and purchased, leased, or rented motor vehicles that are available for personal use.
Click here to read more.
FTA receives 2 new international accreditations in Information Technology and Information Security Management System
Date: 20 Apr, 2021
Abu Dhabi – April 20, 2021:
The Federal Tax Authority (FTA) has received two certifications “ISO 20000” and “ISO 27001” in the information technology services sector: ISO certification for IT Service Management and ISO certification for IT Security Management.
His Excellency Khalid Ali Al Bustani, FTA Director-General, emphasized that the two new certifications enhance confidence in the FTA’s IT services and electronic systems. They are being continuously improved to ensure data protection and improve its services in all sectors. This is being accomplished through the application of a comprehensive quality methodology to complete operations and document them via an integrated system approach.
The Director-General affirmed that FTA since its establishment has been keen to provide a sophisticated digital tax system according to the best international standards. This is to carry out all operations smoothly and facilitate the processes of registration, filing tax returns, tax payments and tax refunds, thereby allowing quick completion.
Click here to read more.
Oman: Zero VAT on 488 food items
Date: 12 Apr, 2021
Muscat – April 12, 2021:
Nearly 500 food products commonly used by people in Oman will be subject to zero taxation under the Value Added Tax, once it comes into effect.
The measure is part of the Social Security Scheme issued by His Majesty Sultan Haitham Bin Tarik, and developed by the Ministry of Commerce, Industry, and Investment Promotion, in association with other government bodies.
Under the scheme, the number of basic food commodities charged a zero rate VAT will be increased to 488 from 93.
Furthermore, all VAT charges related to electricity consumption for citizens who have up to two residential category subscriptions will be paid by the government. VAT is expected to come into effect across the country on April 16.
Click here to read more.
UAE MoE extends anti-money laundering (AML) compliance date until 30th April for selected businesses
Date: 11 Apr, 2021
Dubai- April 11, 2021:
The UAE Ministry of Economy announced the extension of the deadline granted to companies in the “specific non-financial business and professions” sector to register in government regulations approved for countering money laundering and combating the financing of terrorism until the end of April 2021.
The decision is due to the large numbers of companies in the sector seeking to register in the last days of the previous deadline, which expired on March 31, taking into account the conditions of companies and the business sector in general during the period of the Covid-19 pandemic.
Click here to read more.
FTA released a basic tax information bulletin on Automotive Sector
Date: 09 Apr, 2021
Dubai- April 9, 2021:
FTA released a basic tax information bulletin on Automotive Sector meant for new car dealers, used car dealers, servicing and part’s suppliers.
The bulletin clarifies that supplies made by businesses in the automotive sector are generally subject to VAT, including but not limited to:
- Sales of new and used cars
- Sales of car parts
- Service centers’ services, warranties, and related insurance products
Supplies of qualified means of transport, such as buses that are designed or adapted for public transportation of 10 or more passengers and are actually used for public transportation are, however, zero-rated for VAT purposes.
For further clarification contact our tax experts.
FTA released public clarification VATP025 on 'Temporary Zero-rating of Certain Medical Equipment'
Date: 08 Apr, 2021
Dubai- April 8, 2021:
The Federal Tax Authority has published public clarification VATP025 on “Temporary Zero-rating of Certain Medical Equipment”.
The key highlights are:
- The date is extended till 31st December-2021 for VAT at the rate of 0% on certain supplies and import of medical equipment.
- After 31st December-2021 if there is any supply then normal procedures shall apply.
View the list of guides here.
For further clarification contact our tax experts.
FTA released public clarification VATP024 on bad debt relief adjustment
Date: 06 Apr, 2021
- In the event a supplier does not receive payment from the customer, the supplier may adjust the output vat on the bad debt subject to certain conditions as follows.
– VAT charged and accounted for on the supply (to FTA via tax returns).
– Consideration should have been written off in full or part.
– A duration of six months should have passed from the date of supply.
– Supplier has notified the customer that the amount has been written off.
- Bad debt relief can only be taken to the extent of consideration written off in the accounts.
- During the six months period, FTA considers that supplier should engage with customer to recover the debt.
- The supplier is required to notify the customer and communicate via a letter, email or post to the customer stating the amount of consideration that has been written off. The notification to the customer for the write-off must include:
– Invoice number and date of invoice which has not been paid.
– Amount of consideration which has been written off.
- It may not be necessary to obtain an acknowledgment from the customer. However, it is prudent to retain the evidence of having sent the notification.
- The adjustment on account of bad debt relief should be made in the “Adjustment column” of Box 1 of the VAT Return. The adjustment amount should be the VAT amount only
These key highlights are for your information only and should require further advice, kindly get in touch with our tax experts.
Oman: Few medicines, medical equipment exempted from VAT
Date: 05 Apr, 2021
Muscat- April 4, 2021:
The Head of the Tax Authority has issued decision 57/2021 that outlines certain medicines and medical equipment would be subject to value-added tax (VAT) at zero rate. Based on VAT Law promulgated by Royal Decree and based on the requirements of the public interest, it was decided:
Supplies of medicines, herbal medicines, biological preparations, health (hygienic) preparations, food for medical use and medical equipment are subject to value-added tax at zero rates provided a release permit is issued by the Ministry of Health in accordance with the customs code.
This decision shall be published in the Official Gazette and be enforced from April 16, 2021.
Click here to read more.
Oman's Tax Authority slams income tax application rumours on social media
Date: 31 Mar, 2021
Muscat- March 31, 2021:
The Tax Authority in Oman has denied the application of income tax for individuals starting from 2022 and has clarified that it is a rumour being circulated on social media.
Further, Oman’s Tax Authority in a statement issued online confirms that no official statement or decision has been issued in this regard. The matter is still under study according to what is announced in the medium-term fiscal balance plan. Therefore we note to verify the source of the information through official communication channels.
Click here to read more.
Oman: Certain sectors exempted from tax till December 2021
Date: 29 Mar, 2021
Muscat- March 29, 2021:
As per local media reports, certain sectors such as hotels, tourist restaurants, cinemas, amusement and entertainment centres will be exempted from tax collected by the municipality till the end of the year December 2021 in Oman. The move comes as part of the State’s efforts to support businesses in the wake of coronavirus crisis.
The Muscat Municipality announced that it has decided to suspend collecting taxes from the above sectors until December 2021. The decision is based on the economic stimulus plan to mitigate the impact of Covid-19 crisis.
Oman: Violators of VAT to face strict penalties
Date: 28 Mar, 2021
Muscat- March 28, 2021:
Oman has drafted a series of strict penalties for violators of VAT due to be effective from April 16, 2021.
The Tax Authority mentioned the penalties stipulated are imprisonment for a period of not less than two months, or a fine that is not less than OMR1,000. The maximum penalties can reach imprisonment for three years and a fine that does not exceed OMR20,000. In the event of recurrence, the court may double the fine and increase the maximum penalty for imprisonment by more than half of this limit.
In the event of delay in tax payment, the law imposes a rate of 1 % of the value of the unpaid tax for each month of delay, starting from the end of the specified period for payment and up to the date of payment.
The law has mentioned 17 cases in Articles 100 and 101, and it includes cases of wilful failure to implement some of its provisions, cases of providing incorrect data or documents, and cases of doing what would hinder the employees of the Tax Authority or who are required to carry out their duties.
Click here to read more.
KSA issues 40,500 fines for tax violations in first quarter
Date: 25 Mar, 2021
External URL: https://www.arabnews.com/node/1830706/business-economy
Riyadh- March 25, 2021:
Saudi officials have issued 40,500 fines related to a number of different kinds of tax violations this year.
Governments worldwide are cracking down on tax evasion after sources public finances took a hammering during the pandemic. Few Gulf countries, including Saudi Arabia, introduced value added tax to boost revenues and reduce the dependency on oil revenues.
About 1.3 million registered taxpayers exist in the Kingdom according to the authority’s website.
Click here to read more.
No Customs Duty on personal items worth SR3,000
Date: 21 Mar, 2021
Riyadh- March 21, 2021:
Saudi Customs has clarified that travelers arriving in Saudi Arabia will not have to pay customs duty on new personal belongings if they are worth less than SR3,000 ($800). The report mentions that threshold for personal shipments is SR1,000 which includes the value of the goods and freight charges. However as per Saudi customs, a 15% value-added tax (VAT) is imposed on imported goods.
Students returning from abroad will be exempted from taxes on household furniture and personal belongings at the end of their studies or at the end of work abroad after submitting a proof of college attendance, it said.
Cars manufactured in 2016 and afterwards are allowed to be imported from UAE to Saudi Arabia, if they follow local specifications and standards and the fuel economy standard. Tax will be applied at 5% of the vehicle’s value, in addition to 15% VAT. The 15% VAT rate also applies to goods imported from other Gulf states, in addition to shipping fees, customs fees and any other charges. These will be applied until the electronic services system among the Gulf countries begins, Saudi Customs said.
Click here for more
Oman to slash income tax on SMEs and offer investors long-term residency permits
Date: 15 Mar, 2021
External URL: https://www.arabnews.com/node/1822606/business-economy
Muscat- March 15, 2021:
Oman plans to cut income tax for small and medium businesses for 2020 and 2021 and will offer long-term residency permits for foreign investors. The plans are part of Oman’s Vision 2040 aimed at diversifying the economy away from oil, which makes up the bulk of state revenues.
Oman is one of the Gulf’s weakest economies and was badly hit by the coronavirus pandemic and low oil prices. The International Monetary Fund revealed its economy likely shrank 6.4 percent in 2020 and anticipates to make a modest recovery to 1.8 percent growth this year.
The measures also include income tax being reduced for companies in sectors aimed at economic diversification that will begin operating this year. Oman will also cut rent at the Duqm Special Economic Zone and industrial areas until the end of 2022.
click here to read more
Oman:Tally launches VAT ready software 'TallyPrime'
Date: 14 Mar, 2021
Muscat- March 14, 2021:
Tally Solutions, the leading international business management software provider launched a Value Added Tax (VAT) software, TallyPrime Release 1.1.3 to assist the Oman business owners towards an easy transition to the new tax regime.
While TallyPrime will enable businesses to set-up the software quickly and record and print VAT bills in Arabic and English with ease, it will also allow them to start their VAT compliance journey from day one. The software’s unique in-built error detection and correction capability ensures accurate data, so businesses always remain compliant.
Click here for more.
Oman: VAT due on unsold excess goods
Date: 10 Mar, 2021
Muscat- March 10, 2021:
Value added tax is due on excess stocks of goods that have been bought by companies to be sold to customers, even if they remain in storage once that company has ceased operations, a legal expert in the country has said.
Even if a company is storing the goods or all commercial activities have stopped, the company will be liable to pay VAT for these goods. Only goods and services provided by commercial organizations as gifts would be exempt from taxes. As a commercial trader engaged in marketing, distribution, manufacturing, or retail, one should budget for this tax. The general rule is that the new VAT tax should apply to all products and services.
Oman is introducing VAT on April 18 2021 and all companies that will be liable for VAT should register before this date.
Click here to read more.
Federal Tax Authority showcases 3 key initiatives in 'UAE Innovation Week'
Date: 09 Mar, 2021
Dubai- March 9, 2021:
The Federal Tax Authority (FTA) is taking part in the UAE’s Innovation Week, under the slogan ‘UAE Innovates 2021’, with the aim of enhancing an innovation culture and encouraging community participation in designing and developing future experiences and initiatives.
Khalid Al Bustani, Director-General of the FTA, said that the authority’s participation in UAE Innovation Week is in line with its strategy to encourage innovation, development, and to contribute to the UAE’s efforts to strengthen the national strategy for innovation and digital transformation, to continuously develop government services.
The FTA’s three initiatives included
- The ‘Tax Innovation Lab’ initiative, which involves holding remote brainstorming meetings on various critical topics that promote innovative ideas;
- The ‘Monitoring Tax Innovations’, which highlighted the most remarkable innovative achievements in the tax field;
- And a series of online comprehensive talks, comprised of virtual dialogue sessions on innovation management, research and development and future trends in the field.
Al Bustani emphasised that this contribution reflects the FTA’s understanding of customer needs and its efforts to meet their expectations and keep them happy.
VAT applicable for services provided by artists, influencers
Date: 08 Mar, 2021
Dubai- March 8, 2021:
The Federal Tax Authority (FTA) has clarified in a bulletin that services provided by artists and social media influencers (SMIs) for consideration are subject to Value Added Tax.
VAT applies to such services and include, but are not limited to, online promotional activities performed on behalf of other businesses for a consideration, such as promoting a product in a blog or a video or promoting a business on a social media post, any physical appearances; marketing and advertising related activities; providing access to any social media influencers’ networks on social media, and any other services that the SMIs may provide for a consideration.
This announcement was shared in the latest Basic Tax Information Bulletin issued by the FTA on the tax treatment of services provided by artists and social media influencers.
The bulletin clarified that if an artist or influencer incurs any costs in providing a service and subsequently recovers that cost from its client, such reimbursement falls within the scope of VAT in the UAE.
Click here to view more.
GAZT launches an interactive guide to educate electronic stores on VAT requirements
Date: 07 Mar, 2021
Dubai- March 7, 2021:
GAZT launches a VAT guide for stores to enable owners of electronic stores to comply with their obligations relating to VAT and guide them how to register, provide acknowledgment and pay tax. The guide includes a definition of electronic stores for those operating through independent websites, social media platforms, smart phone applications or instant chat applications.
The guide clarifies the obligations of the online store owner whose annual sales exceeds 375 thousand riyals annually before the Zakat and Income Authority, which include registering for value-added tax, displaying the tax certificate in the online store, filing tax returns and paying tax liabilities.
The Authority emphasized the necessity for the online store to clearly display the VAT registration certificate in front of consumers, regardless of the electronic sales platform through which the merchant operates in order to avoid imposing fines on the store.
View the VAT guide for e-shops.
Click here to read more.
UAE MoE extends deadline until March 31 for DNFBPs to comply with Anti-money Laundering (AML)
Date: 03 Mar, 2021
Dubai- March 3, 2021:
The UAE has the most attractive trade regimes in the Middle East region, making it a global hub. As a committed member of the International Financial Action Task Force (FATF), the UAE has displayed readiness for anti-money laundering (AML) and counter financing of terrorism (CFT). The UAE taken proactive steps in an effort to monitor the illegal funds and align with international best practices.
Federal Law No 20 of 2018 on Anti Money Laundering (AML) was introduced in the UAE for combating the financing of terrorism and of illegal organizations.
The regulatory authorities under the AML set up are:
- Ministry of Economy
- The Central Bank of the UAE
- Securities and Commodities Authority
- Ministry of Justice
- Insurance Authority
- Dubai Financial Services Authority
- Financial Services Regulator Authority in Abu Dhabi Global Market
The law has enforced great responsibilities on Designated Non- Financial Businesses and Professions (DNFBP) to help tackle money laundering. The UAE’s Ministry of Economy (MoE) is entrusted with the responsibility to supervise the DNFBP and commercial free zones with regards to AML/CFT.
Anyone engaged in the following trade or business activities would be considered a DNFBP:
- Brokers and real estate agents
- Dealers in precious metals and precious stones
- Lawyers, notaries, and other independent legal professionals and independent accountants
- Providers of corporate services and trusts
Click here to know the process of goAML registration.
- The deadline to register in the free goAML system to file STRs (Suspicious transaction reporting) and ARS (Automatic reporting system) for sanctions lists was February 25, 2021 and is applicable for DNFBPs registered in mainland and free zones as well.
- MoE has extended the deadline and grace period for registration until March 31, 2021 for mainland DNFBPs.
- DNFBPs that fail to abide with rules shall be subject to various administrative and financial penalties, that range from warnings to fines between Dh 50,000 to Dh 5 million.
**CLARIFY YOUR QUERIES by WITH OUR TAX EXPERTS.
Qatar, Rwanda sign agreement to avoid double taxation
Date: 28 Feb, 2021
Doha- February 28, 2021:
The State of Qatar and the Republic of Rwanda has signed an agreement to avoid double taxation and prevent financial evasion between the governments of the two countries, at the General Tax Authority’s (GTA) headquarters in Doha.
The agreement was signed by His Excellency Ahmed bin Issa Al Mohannadi, the GTA’s President and His Excellency Francois Nkulikiyimfura, Rwanda’s Ambassador to Doha, in the presence of His Excellency Ambassador Abdulrahman bin Mohammed Al Dosari, Director of African Affairs Department at the Ministry of Foreign Affairs.
The agreement aims to eliminate double taxation between the two countries, solve obstacles that may restrict the movement of capital and encourage trade exchange, increase investment opportunities between the two sides through individuals and corporates, and enhance international standards of transparency through the exchange of documented financial information.
Click here to read more.
Qatar GTA and Invenio launch an integrated digital tax administration system
Date: 28 Feb, 2021
Qatar- February 25, 2021:
The General Tax Authority (GTA) and Invenio Business Solutions have successfully launched a state-of-the-art digital tax administration system, in Qatar.
The new system has transformed the tax administration lifecycle, digitalizing existing services and making them 100% contactless. Over 58,000 taxpayers have already registered on the comprehensive system, which supports multiple revenue types and offers 24×7 access to online services.
The GTA embarked on a national level change programme to modernize tax administration and enhance the taxpayer experience in the State. The country now has an agile platform, where evolving tax policies, laws and innovations can be built with ease.The SAP Tax and Revenue Management (TRM) solution on SAP S/4HANA provides end-to-end taxation management, advanced analytical processing and seamless data integration, whilst retaining data quality making it the perfect tax administration solution.
Click here to read more.
stc Bahrain-AFS partner for next generation payment solutions
Date: 25 Feb, 2021
Bahrain- February 25, 2021:
stc Bahrain, a digital enabler and Arab Financial Services (AFS), MEA region’s digital payments and financial technology solutions provider, have partnered to launch FinTech payment solutions for both retail SMEs and customers across the Kingdom of Bahrain. The partnership will see stc Bahrain leverage AFS’ VAT-enabled payment tools to roll out all-in-one fully integrated stc Tajer point-of-sale (PoS) solution.
Powered by AFS, the PoS solution provides the flexibility to process payments, print receipts, accept online orders while lowering infrastructure investments, minimizing human errors and making transaction easier.
The partnership expands the stc pay network, with AFS said to be becoming the first acquirer in Bahrain to offer stc pay acceptance across their network of smart Android-based, integrated PoS (point-of-sale) terminals. Merchants will now be enabled with QR contactless payments and added to the stc pay portfolio.
With a VAT-enabled integrated payment solution developed by AFS, stc Bahrain will be supporting retail companies, pharmacies, restaurants, cafes, salons, gyms with the PoS solution, and would streamline the financial transaction processes into one system.
Bahrain: Attorney General establishes Tax Evasion Crimes Unit
Date: 24 Feb, 2021
Bahrain- February 24, 2021:
The Attorney-General has issued a decree establishing a specialized unit called “Tax Evasion Crimes Unit”.
Affiliated with the Financial Crimes and Money Laundering Prosecution, the new unit will investigate the crimes stipulated in the Value Added Tax Law No. (48) of 2018.
Financial Crimes and Money Laundering Prosecution Advocate Chancellor Nayef Yusef Mahmoud said that the establishment of this unit aims to reinforce the executive procedures regarding the application of the provisions of the law to tackle the cases of tax evasion. The unit is set up to probe such types of crimes and speed up the investigation of the reports related to the violation of the provisions of this law, in line with the requirements of the law for the urgent consideration and referral to the courts.
Click here to read more…
NBR releases updated VAT Imports and Exports guide
Date: 23 Feb, 2021
Bahrain- February 23, 2021:
Bahrain’s National Bureau of Revenue (NBR) has published an updated version (1.2) of VAT Imports and Exports guide on 4th February, 2021.
The revised version clarifies the VAT implication regarding adjustment in the value of goods imported in the Kingdom of Bahrain.
Click here to view the Full Guide ( Version 1.2)
Qatar: Transfer Pricing Declaration Form now required on Dhareeba
Date: 23 Feb, 2021
Qatar- February 23, 2021:The Qatar General Tax Authority (GTA) on February 2, 2021, verbally confirmed that a Transfer Pricing Form will be required for taxpayers for the financial years January 1, 2020 onwards. Taxpayers in Qatar are required to submit a transfer pricing declaration using the new tax administration portal – Dhareeba.
The Dhareeba system is currently equipped to accept transfer pricing declarations. This is only applicable for taxpayers having a specified revenue or asset value exceeding a threshold limit which is expected to be set at QAR 10 million.
The Transfer Pricing Form will require information on the details and nature of the taxpayer’s intra-group transactions, including the Organization for Economic Co-operation and Development (OECD) method applied by the taxpayer to determine that the transactions were conducted on an arm’s-length basis. In addition to the above information, the Transfer Pricing Form will also require taxpayers to provide additional transfer pricing related information.
Dhareeba is an electronic system that connects the General Tax Authority and its partners from the relevant government agencies and taxpayers. It automatically calculates and process the various types of tax to assist taxpayers in managing their tax transactions, in accordance with the Qatari tax laws.
Oman to impose Tax on High-Income Earners soon, says IMF
Date: 18 Feb, 2021
Oman- February 17, 2021:
Oman’s finance ministry has indicated in its 2020-2024 economic plan that it is considering imposing a wealth tax in order to make government finances more sustainable as Covid-19 takes its toll on business activity.
The International Monetary Fund (IMF) has estimated that Oman’s budget deficit will reach nearly 19% of GDP this year. The new economic plan is projected to reduce that to 1.7% by 2024, according to a statement from the ministry of finance.The proposed tax would apply to high-income individuals, but the plan does not specify what the income brackets would be.
Currently none of the six Gulf Cooperation Council (GCC) states, collect income tax from individuals. Oman will become the first gulf state to introduce income tax on high earners in 2022.
Click here to view more.
FTA to deactivate VAT 301 form for VAT payment
Date: 16 Feb, 2021
Dubai- February 16, 2021:
Since the implementation of VAT in UAE, the VAT301 form has been available on e-services portal to manually process the VAT payment on Customs Declarations using the Tax Registration Number (TRN).
Recently, FTA has communicated that form VAT301 will be discontinued on 23 February, 2021 for users who have a valid TRN and were using this form earlier for settlements via their VAT returns. Anyone registered for VAT purposes and having a valid TRN, in order to continue being able to import goods via Customs, ensure that your
Customs Registration Numbers (CRN’s) are linked to your Tax Registration Number (TRN).
If you do not have a CRN, ensure you register with the Customs Department and link your CRN with TRN. Alternatively, you will only be able to import goods via a clearing company registered with the FTA or use form VAT301 to utilize the payment option.
If you are from those whom the condition and rules applies on as it is shown below :-
1– Designated entities exempted by FTA.
2- Free zone Companies that exports through land to GCC Countries from designated zones[AHA1] for the VAT purpose.
3- FTA accredited Shipping and Clearance Agencies to clear shipments of on behalf of registered/non-registered importers with FTA.
NOTE: You can request to open form VAT301 for VAT settlements based on customs declarations through FTA’s online services. To submit application download VAT-301-SETTLEMENT-ACCESS-FORM
This will need to be filled and sent to VAT301application@tax.gov.ae along with applicable documents such as sample GCC transit customs declarations for review and approval.
Send your inquiry and we will arrange a consultation on this subject.
FTA Inspections in UAE: to enhance Excise Tax compliance and reduce violations
Date: 15 Feb, 2021
Dubai- February 15, 2021:
The number of inspection campaigns organized by the Federal Tax Authority (FTA) witnessed notable growth during 2020 across UAE markets. Some were conducted in collaboration with Departments of Economic Development and other relevant entities to protect consumer rights and increase the level of tax compliance.
The Authority said that these campaigns were carried out as part of their extensive efforts to contribute towards strengthening market performance, protect legitimate trade and prevent the sale of contraband within the UAE and tax evasion.
The application of Excise Tax laws achieved remarkable success since their implementation, reflecting positive results primarily in building a safe and healthy society by reducing the consumption of harmful goods.
The FTA noted that the total value of the liabilities caught during the inspection visits amounted to AED 191,830,000 in the category of goods subject to Excise Tax, 9.4 million units of cigarette packs and 14,000 kilograms of shisha tobacco products were uncovered as goods not bearing digital tax stamps and no tax has been declared or paid on them. Other goods caught in violation of Excise Tax laws included a total of more than 803,000 items ranging from carbonated beverages, energy drinks, sweetened drinks and electronic smoking devices.
FTA Director-General, Khalid Ali Al Bustani, confirmed that the Authority prioritizes consumers’ protection from harmful products that do not meet the UAE’s regulations and standards while actively combating tax evasion.
The Authority will continue to conduct its inspection campaigns to enhance tax compliance and reduce transactions that violate legislation and tax procedures.
Owners of multiple 'sole businesses' need just one VAT registration: FTA
Date: 10 Feb, 2021
Dubai- February 10, 2021:
According to the FTA, anyone owning multiple ‘sole businesses’ in the UAE need only one tax registration for all of them, and not for each one separately. It means that all tax claims must be filed collectively by the individual and for the establishments he owns. A sole establishment is 100 per cent owned by an individual, and does not have legal standing independent of its owner.
The FTA clarified that the sole proprietorship rule does not apply to a One-Person Company LLC or similar legal entities, which are seen as “distinct and separate legal persons” from their owners (unless the applicable legislation treats such entity and the natural person as the same person). For the avoidance of doubt, it should be noted that a legal person a company) cannot own a sole establishment. In certain cases, tax registrations by taxpayers are reviewed with regards to sole establishments and such persons will be informed of the corrective measures to be taken.
The tax claims filed by the business owner in addition to his sole establishments must be considered collectively to determine whether the person exceeded the mandatory VAT registration threshold of Dh375,000.
The FTA said the registrant must inform the FTA of any undeclared output tax by submitting a voluntary disclosure in accordance with Federal Law No. 7 of 2017 on Tax Procedures. A natural person is also required to notify the FTA if it failed to register for VAT and take the necessary corrective action to account for any outstanding dues.
Oman Tax Authority publishes VAT Registration Guides
Date: 03 Feb, 2021
Oman- February 3, 2021:
The Sultanate of Oman Tax Authority has announced the commencement of VAT registration from 1st February 2021 until 15th March 2021 for taxable persons with annual supplies exceeding or expected to exceed 1 million OMR. The voluntary registration will also be available for taxable persons with annual supplies or expenses exceeding or expected to exceed 19,250 OMR.
The registration must be made through the Oman Tax Authority’s Online Portal – www.taxoman.gov.om
Oman Tax Authority has released a list of ‘Manual Guides for VAT Registration’ explaining the registration requirements for business and individuals. It explains who is liable to register for VAT, and also explains the registration requirements in the period before the VAT Law is effective.
The Oman Tax Authority advises taxable persons to register for VAT within the preset deadlines to avoid any penalties levied on late registration. Taxable persons may source more information pertaining the registration procedure and other VAT details on the guides published on Oman’s Tax Authority website.
Click here to view the Guides for VAT registration.
KSA: Fines on late VAT returns have been waived until June 2021
Date: 02 Feb, 2021
External URL: https://saudigazette.com.sa/article/602768
Saudi Arabia- February 2, 2021:
The Saudi General Authority of Zakat and Tax (GAZT) extended the waiver period of fines and financial penalties for non-payment of Value Added Tax (VAT) until June 30, 2021. The move is part of the Kingdom’s initiatives to help the private sector face the economic fallout resulting from the coronavirus outbreak.
Taxpayers will be exempted from fines on delays in the payment of taxes or filing tax returns. They will be also exempted from the penalties imposed for correcting tax returns under the VAT law.
Taxpayers will be 100% exempted from penalties, if they fully pay the principal tax due under the relevant tax returns during the period from January-March 2021. GAZT added that 75% of fines will be waived if taxpayers fully pay the principal tax due under the relevant tax returns during the period from April-May 2021. A 50% waiver will also apply to taxpayers that fully pay the principal tax due under the relevant tax returns during June.
However, The GAZT clarified that the measure does not include any waivers of penalties that were imposed by the authority, other than delays in tax payments, submission of tax returns and correction of tax returns. The initiative does not also cover the fines imposed for tax evasions and the fines paid before January 21.
Remittance tax back in play as Kuwaiti MPs submit bill
Date: 18 Jan, 2021
Kuwait- January 18, 2021:
The tax on expatriates’ money remittance is back in the news as Parliamentarians Osama Al-Shaheen, Hamad Al-Matar, Abdulaziz Al-Saqaabi, Shuaib Al- Al- Muwaizri and Khalid Al-Otaibi bring a new proposal on taxing remittances.
At present, the exchange companies are collecting fees for remittances, but the State gets nothing. The State will benefit from remittances through this bill, Al-Shaheen explained.
The Kuwaiti MP stated that roughly KD 21 bn has been transferred out of Kuwait in the past five years – averaging KD 4.2 bn every year. Based on these figures, some KD 100 m can be collected every year by imposing the fee. He disclosed that the draft submitted aims to enhance the public budget, support the domestic economy, generate more opportunities and avoid capital leaving the country.
This bill amends law number 32/1968 which regulates the currency, Central Bank of Kuwait (CBK) and banking procedures. The article mandates the Central Bank of Kuwait to take the necessary steps to obligate local banks, branches of foreign banks and money exchange companies to collect tax on remittances – at a rate of 2.5 percent regardless of the currency. This tax will be added to the State treasury.
Money transfers related to agreements on investment protection and money transferred by the government are tax-exempt. The Central Bank must exempt Kuwaitis studying abroad, those undergoing treatment overseas treatment, and if the transferred amount is less than KD 10,000 per year from paying such tax.
Oman: Over 90 food items will be subjected to VAT at zero percent
Date: 13 Jan, 2021
Muscat- January 13, 2021:
The Chairman of the Tax Authority issued three executive decisions related to the implementation of the value-added tax, which will come into effect on April 16 of this year 2021.
Ministerial Decree 2/2021, dated 4 January 2021, detailed the list of around 93 food items that will be subject to VAT at the zero rate in Oman.
The list includes the following food products :
- Meat, fish and poultry
- Milk and dairy products
- Fresh eggs, vegetables and fruits
- Coffee and tea
- Cardamom creels
- Olive oil
- Bottled drinking water
- Nutritional preparations for children
Oman Tax Authority: New executive decisions on VAT implementation
Date: 13 Jan, 2021
Muscat- January 13, 2021:
In a series of executive decisions issued, the Tax Authority in Oman has announced the framework and related guidelines for registration of tax-eligible businesses and organizations in the Sultanate.
Businesses with an annual turnover of a minimum of OMR 38,500 are required to mandatorily register with the Tax Authority. However, registration is optional for businesses with a minimum turnover of OMR 19,250. These limits are in with the provisions of the GCC Unified VAT Agreement signed by the Sultanate in November 2016.
SMEs and micro-businesses have been given additional time to register their firms in order for them to equip themselves with the requisite IT systems and bookkeeping methods required to comply with the requirements of the VAT law.
First to register will be businesses with an annual turnover of over OMR 1 million. They must register between February 1 and March 15, 2021.
For businesses with a turnover of over OMR 500,000, the deadline for registration is July 1, 2021.
VAT is an indirect tax on most goods and is levied on the value-added of business operations, which is the difference between the final price of a commodity and the cost of materials and services.Confirming the implementation of VAT, the Ministry of Finance announced in the 2021 General Budget that the new level would be imposed on goods and services in Oman starting from April 2021, with exception of the education and health sectors and some basic commodities.
According to Royal Decree 121/2020, a 6-months grace period has been granted for the taxpayer to register, and prepare their internal system to implement the VAT. The value-added tax rate of 5 per cent to be applied in Oman is among the lowest rates at the international level.
“Therefore, it is expected that the impact of VAT on the cost of living in Oman will be minimal. The VAT will have a positive impact on the economic and social development and the international competitiveness of Oman. The financial resources obtained from this tax will contribute to building a sustainable economy for future generations, and it will also contribute to improving public services and continuing the development of infrastructure in future,” the ministry noted.
MoF extends deadline till January 31, 2021 for submitting ESR notifications
Date: 06 Jan, 2021
Abu Dhabi- January 6, 2020:
The Ministry of Finance (MoF) has announced the extension of the deadline for submitting Economic Substance Regulations (ESR) notifications and reports.
All companies in the UAE that engage in any of the ESR’s relevant activities must submit an annual ESR notification to its Regulatory Authority no later than January 31, 2021 in order not to be subject to administrative penalties.
All companies that fall under this decision are immediately to register an account in the ministry to access the ESR Portal to submit needed reports, notifications and supporting documents electronically before the mentioned deadline as no further extension will be granted to deviating companies.
Saudi Arabia becomes first Arab country to sign DTA agreement with Taiwan
Date: 31 Dec, 2020
External URL: https://www.arabnews.com/node/1775276/business-economy
Saudi Arabia- December 31, 2020:
Saudi Arabia has become the first Arab country to sign a double taxation avoidance agreement with Taiwan.
Joanne Ou, a spokesperson for Taiwan’s Ministry of Foreign Affairs (MOFA), said that the agreement was signed in Riyadh on December 2,2020. The new tax agreement will come into effect from January 1, 2021.
According to the CNA report, Saudi Arabia is Taiwan’s 13th largest trading partner and trade between the two countries was valued at $8.66 billion in 2019.
“As Saudi Arabia gradually shifts away from dependence on its oil exports, it is adopting a diversified economic policy that encourages foreign investment,” MOFA said in a statement. “The latest tax agreement will help facilitate bilateral investment, trade, employment opportunities, technological exchange and cooperation on taxes and tariffs,” it added.
Saudi authorities clarify which cars are exempt from VAT
Date: 30 Dec, 2020
Saudi Arabia- December 30, 2020:
While some car owners put a value-added tax of 15% on the cars they sell off outside the taxable showrooms, the Saudi Zakat and Income Authority confirmed, in response to an inquiry, that selling a used car from an unregistered individual, who does not run a business to another individual is not subject to VAT, local media reported.
According to the Zakat and Income Authority, taxable cars include vehicles sold off in auctions if the seller is carrying out an economic activity and cars sold off by showrooms or VAT registered businesses.
UAE makes DTS mandatory for waterpipe, e-cigarette products from 2021
Date: 23 Dec, 2020
Abu Dhabi- December 23, 2020:
The Federal Tax Authority has announced that as of 1st January 2021, it will not be permitted to sell, supply, transport, store or possess any type of water pipe tobacco or electrically heated cigarettes in the UAE unless they bear the Digital Tax Stamp (DTS). All those concerned must strictly comply.
This distinctive mark system for tobacco products is a regulatory program which supports the state’s efforts to combat the illicit trade in tobacco products across the country. The program requires tobacco manufacturers, suppliers and concerned parties to comply with procedures for placing custom digital tax stamps on tobacco products, including water pipe tobacco and electrically heated cigarettes rolls. This is done to monitor and track their movement from manufacturer to the point of consumption.
The DTS system helps the FTA “improve its ability to collect excise tax charged” on such products on being imported or manufactured locally. It also enables “stakeholders to analyze the supply chain to better control illicit tobacco products”.
In addition, the DTS system allows for the implementation of compliance standards. Visit tax.gov.ae/dts
Read More about the Digital Tax Stamp Scheme.
Zoho launches VAT-compliant software in Oman
Date: 17 Dec, 2020
Muscat- December 17, 2020:
Zoho, a global information technology company that offers over 45 business applications including CRM, business email and help desk, has launched its VAT-compliant accounting software, Zoho Books in the region.
As businesses in the sultanate prepare for the implementation of VAT, Zoho Books helps their seamless transition to the new tax law and ensure VAT compliance.
Having helped tens of thousands of businesses in the United Arab Emirates, Saudi Arabia and Bahrain easily transition to VAT with country-specific editions, Zoho Books is now offering its expertise to businesses in Oman to help with their accounting and VAT filing needs. The software has also been accredited by the Federal Tax Authority in the UAE and General Authority of Zakat and Tax in Saudi Arabia.
Hyther Nizam, president – MEA, Zoho Corp, said, “With the experience that we gained from bringing out tax-specific editions in the UAE, Saudi Arabia and Bahrain, we’ve built Zoho Books to provide a complete accounting solution for Omani business owners. Zoho Books, with its in-built features can help businesses create VAT-compliant transactions, record and file VAT returns with ease. It is also a great opportunity for businesses to transform their current business processes and adopt digitalization and automation of business finances.”
Click here to read more.
“Zakat and Income” announces the entry into force of the electronic billing regulation
Date: 04 Dec, 2020
Riyadh- December 4, 2020:
The General Authority for Zakat and Income announced the approval of its Board of Directors on the electronic billing regulation, which was published on December 4, 2020. An electronic invoice is a tax invoice that is issued electronically through an electronic means, and is issued by every taxpayer subject to value added tax in the Kingdom.
The electronic billing regulation contains seven articles that regulate the mechanism for issuing and keeping electronic invoices for the taxpayers and clarifies the provisions, procedures and persons subject to them, in addition to the procedural rules and time limits. Whereas, the Authority confirmed that the regulation has entered into force from the date of publication. Note that the mandatory application will take place on the taxpayers subject to it to issue and keep invoices on the fourth of December 2021.
The General Authority for Zakat and Income invites all taxpayers to view the electronic billing list through its website and to contact it via the unified number (19993), which works 24 hours a day, seven days a week, for any inquiries related to electronic billing .
It is worth noting that the electronic invoicing system aims to limit the volume of shadow economy transactions, in addition to combating commercial concealment.
Click here to read more.
Saudi Arabia to review VAT increase after the pandemic ends
Date: 22 Nov, 2020
Riyadh- November 22, 2020:
Saudi Arabia will review its VAT increase after the coronavirus pandemic ends, the Kingdom’s acting media minister said.
Saudi Arabia tripled value-added tax to 15% in July to offset the impact of lower oil revenue on state finances.The decision was a painful one and has undoubtedly caused concern for every individual and family.
“This decision is like any other decision, it can be revised God willing when this crisis is over,” Majid bin Abdullah al-Qasabi told reporters at a news conference, referring to the global pandemic.
Click here to read more.
FTA conducts a second virtual workshop for tax agents on tax treatment of e-commerce
Date: 15 Nov, 2020
Abu Dhabi- November 11, 2020:
The Federal Tax Authority (FTA) confirmed that several general Value Added Tax (VAT) rules apply to e-commerce transactions, in addition to a number of special VAT rules specifically applied to e-commerce transactions. E-commerce refers to the supplies of goods and services on digital platforms, via computers or mobile phones purchased from websites or electronic applications.
The workshop saw the participation of 225 accredited tax agents and a number of FTA officials. The FTA gave a presentation on how to apply VAT on the supplies of goods and services made within the e-commerce framework and how to calculate VAT on these supplies. The FTA also presented an overview of e-commerce, the principles of VAT on the supply of goods via e-commerce and the supply of electronic services, and the effects of VAT on electronic markets using practical examples. The presentation indicated that all goods and services purchased through online shopping sites are generally subject to 5% VAT if the place of supply is in the UAE. The tax is also applied to most of the goods that are sold inside the UAE; subject to some exceptions per the VAT legislation (such as medicines sold on websites). Additionally, the import of goods is subject to VAT.
His Excellency Khaled Ali Al Bustani, Director General of the FTA, stressed that the number of FTA accredited tax agents is increasing steadily, in line with the continuous growth of taxable persons within the tax system. H.E. Al Bustani said: “The number of accredited tax agents increased in the first 10 months of 2020 by more than 10% to 515, compared to 468 in the same period last year. This increase provides more opportunities for taxpayers wishing to deal with the FTA through tax agents by offering them an extensive, constantly-updated list of approved agents on the FTA’s website.”
Click here to read more.
UAE has no plan to hike VAT
Date: 12 Nov, 2020
Dubai- November 12, 2020:
The UAE’s Ministry of Finance said it raised Dh11.6 billion in value-added tax (VAT) revenues in the first eight months of 2020 and the government has no plans to raise VAT to more than five per cent.
The UAE and Saudi Arabia levied five per cent VAT from January 1, 2018 and later Bahrain also introduced it. Saudi Arabia, the region’s largest economy, hiked the VAT to 15 per cent from July 1, 2020. Oman is set to become fourth country in the GCC to impose VAT from April next year.
Saeed Rashid Al Yateem, assistant under-secretary of resource and budget at Ministry of Finiance, affirmed that there are no plans or decisions at the moment to raise VAT to more than five per cent in the UAE.
Click here to read more.
FTA to issue tax residency certificates
Date: 08 Nov, 2020
Dubai- November 8, 2020:
Tax residency and commercial activities certificates will now be issued through the Federal Tax Authority of the UAE, the FTA said.
Applications for the certificates can be made through the FTA’s e-services portal from November 14, the authority added.
Tax residency certificates are issued to eligible government entities, companies and individuals looking to benefit from double taxation avoidance agreements signed between the UAE and other countries, while the commercial activities certificate enables applicants to refund VAT paid in advance outside of the UAE.
Click here to read more
Income tax to be introduced in Oman: Ministry
Date: 04 Nov, 2020
Dubai- November 4, 2020:
Oman is said to be weighing up plans to introduce income tax on high earners in 2022 as part of the finance ministry’s 2020-2024 economic scheme, as the Gulf state seeks to restore finances battered by low oil prices.
The plan aims to bring Oman’s fiscal deficit down to 1.7 per cent of gross domestic product by 2024, from a preliminary deficit of 15.8 per cent this year.It also has a target of increasing non-oil revenues to 35 per cent of total government revenue by 2024, from 28 per cent this year.
“The government recognizes the need to strengthen the Sultanate’s revenue-raising framework by decreasing its reliance on hydrocarbon revenues,” it said in its bond prospectus.
“The initiative is under study and all aspects of its application are being considered. It is expected to apply the tax in 2022,” the 2020-2024 medium term economic balance document said.
Click here to read more.
FTA Board of Directors review Authority’s performance indicators in the meeting
Date: 31 Oct, 2020
Dubai- October 31, 2020:
The FTA Board of Directors, chaired by H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, and Chairman of the Authority’s Board of Directors, approved a number of executive decisions related to the Authority’s operational activities and organisational and administrative policies during its 13th meeting.
The Authority’s financial statements for the period covering the first quarter ending on 31st March, and the period ending on June 30th, 2020, were approved. This was in accordance with the international accounting standards related to reviewing the quarterly financial statements.
During the virtual meeting, the Board reviewed indicators of FTA’s performance adopted by the Authority in all areas relevant to its activities during the first nine months of 2020, including registration systems, filing returns, tax refunds for groups legally qualified to recover, such as UAE nationals’ homebuilders refund, tax refunds for tourists and for foreign business visitors.
H.H. Sheikh Hamdan bin Rashid confirmed that the reports reviewed during the meeting showed that the Authority continues to maintain its distinguished performance across all activities, while continuing its development plans to upgrade its services in accordance with the best standards to achieve customer happiness.
The is also a 210% growth in tax amounts refunded to UAE Nationals during 2020 for the construction of their new homes to a value of 270 million AED.
Click here to read more.
Voluntary disclosures by UAE businesses on VAT or excise tax will face heavy penalties
Date: 20 Oct, 2020
Dubai- October 20, 2020:
There is a major development in the UAE tax litigation landscape.
In a very significant twist, the voluntary disclosures made by UAE based businesses on their actual VAT obligations will now be charged with late payment penalties (up to 300% of the tax due). Late payment penalties would apply from the due date of the tax return and not from the date of the voluntary disclosure.
This is according to a ruling by the UAE Federal Supreme Court judgment on an appeal filed by the UAE Federal Tax Authority.
Click here to read more.
Tax payment through the new version of the eDirham card
Date: 19 Oct, 2020
Abu Dhabi- October 19, 2020:
The new generation of the eDirham cards have been included as one of the official payment channels provided by the authority. Tax payments can be processed via the new eDirham cards as of Sunday 1st November, 2020, as payments will not be accepted through the existing eDirham cards with effect from the same date.
In order to ensure a smooth transition to the new generation of the eDirham, the authority calls on VAT registrants to prepare to make the switch to the new version. This comes to replace the old version of the eDirham, which will be suspended and will not be available to use for the Authority’s transactions as from the beginning of November 2020.
The FTA stresses that the new version of the eDirham will provide users with a more diverse set of options that are both easier to use and adhere to the highest standards of safety and excellence.
Click here to read more.
Oman to implement 5% VAT in six months
Date: 13 Oct, 2020
Oman- October 13, 2020: Oman has issued a decree to start levying a 5 per cent value-added tax (VAT) in six months’ time to offset a slump in oil prices and an economic downturn exacerbated by coronavirus.
The tax will be on most goods and services, though with some exceptions. Essential food items, medical care, education and financial services will be exempt from the planned levy, according to a royal decree detailing the tax.
Saudi Arabia, the UAE and Bahrain have already introduced the tax, with Riyadh tripling it this year. Oman, Kuwait and Qatar have not yet introduced the tax.
Click here to read more.
Oman removed from the EU Blacklist
Date: 06 Oct, 2020
Oman- October 6, 2020: Oman was eliminated from the EU list of non-cooperative jurisdictions for tax purposes (the “EU Blacklist”). Oman was previously included on the EU Blacklist on 12 March 2019 for not making sufficient progress in implementing information exchange protocols.
Oman has been removed from the EU blacklist as per the Council of the EU press release dated 6th October 2020. Oman is, therefore, no longer regarded as a non-cooperative tax jurisdiction by the EU Council.
This development comes after recent steps taken by Oman to improve its tax framework and implement exchange of information protocols.
Click here to read more.
Saudi Arabia: Real Estate Transaction Tax - A new tax introduced
Date: 02 Oct, 2020
Riyadh- October 2, 2020: Saudi Arabia will exempt real estate transactions from a 15 per cent VAT (value-added tax) and instead impose a new 5 per cent tax on property deals. The Saudi finance minister affirmed that the order aimed to support Saudi citizens who want to buy homes.
The country is facing a deep recession, with the economy shrinking by 7 per cent in the second quarter and unemployment hitting a record high of 15.4 per cent. The government had in July tripled VAT to 15 per cent to boost non-oil revenues, but the move set off limited domestic demand.
The official announcement can be accessed through the following link:
Higher educational institutions can claim VAT refund
Date: 14 Sep, 2020
Abu Dhabi- September 13, 2020: The Federal Tax Authority (FTA), has confirmed that higher educational institutions making only zero-rated and/or standard-rated supplies may recover input tax in full, except where recovery is specifically blocked.
Blocked input tax includes value-added tax (VAT) incurred on certain entertainment services, and motor vehicles that have been purchased, leased, or rented and made available for personal use, the FTA said on Sunday.
The Authority noted that higher education institutions providing exempt supplies are eligible to recover only a portion of the input tax incurred.
The FTA’s Basic Tax Information Bulletin focuses on the tax treatment for the higher education sector in respect of universities and higher education institutions recognised by the competent federal or local government entity regulating the higher education sector where the course is delivered.
Oman’s ruler expected to approve VAT to boost economy
Date: 03 Sep, 2020
03 Sept, 2020– Oman’s legislature is proposing to implement a value-added tax after January 2022 as falling oil revenue pressures its finances, following similar moves by Gulf Arab neighbours.
A joint committee of the State Council and Shura Council suggested the time frame and sent a draft law for approval to Sultan Haitham Bin Tariq Al Said. He took power in January vowing to take steps to bolster the near $80 billion economy that his predecessor had sidestepped.
Oman would become the fourth of the Gulf Cooperation Council’s six states to collect VAT, a move agreed by the bloc years ago. The UAE imposed a 5 per cent VAT in 2018 on most goods and services.
Zero VAT for face masks and sanitisers
Date: 02 Sep, 2020
Dubai- September 2, 2020: Medical equipment like disposable suits, hand sanitisers, face masks, respirators for air purification and gloves will be subject to zero-rated value-added tax (VAT) in the UAE. A resolution stipulating this was adopted by the UAE Cabinet to mitigate the repercussions of Covid-19 and support the healthcare sector in the country.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, chaired the meeting at Qasr Al Watan in Abu Dhabi. He hosted virtually a number of teaching staff and students from different schools in the UAE.
He stressed that education has always been a top priority. “The country exerts unwavering efforts to develop the educational system despite all circumstances,” he said.
UAE Federal Tax Authority launches smart app to detect uncertified tobacco products
Date: 25 Aug, 2020
Abu Dhabi-August 25, 2020: Tax evasion and trade in inferior products and counterfeit goods are among the main challenges facing tax authorities around the world. As part of its on-going efforts to protect consumers from commercial fraud and combat tax evasion with various mechanisms and utilizing the latest technologies, the Federal Tax Authority (FTA) has launched a smart application that can be applied to check on the legality of trademarked tobacco products.
The app enables consumers to scan the stamps placed on the tobacco packages to verify that it is an Authority accredited digital tax stamp, ensure that these products meet the standard specifications, are not smuggled, and have been subjected to tax. Should the consumer discover that the stamps are not accredited, they can file a report to the FTA directly from the smart application. The Authority will then cooperate with the relevant authorities to take legal actions against violators.
The Authority said in a press release issued today that the application has been instigated under the banner, “Monitor yourself, fight fraud”, adding that users can install the app, known as ‘FTA DTS’, on their smart phones via the Apple Store and Google Play.
Commenting on the initiative, His Excellency Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, said: “The ‘FTA DTS’ smart application is one of the effective tools that support the ‘Marking Tobacco and Tobacco Products Scheme’, which came into effect at the beginning of 2019 to combat tax evasion, protect public health and reduce the risks to consumers from the inferior products entering local markets.”
Dubai Refreshment wins court case over tax issue
Date: 18 Aug, 2020
DUBAI- August 18, 2020: Dubai Refreshment Co (DRC)., the distributor of PepsiCo products, has said the First Instance Federal Court of Abu Dhabi has ruled in its favor related to the tax assessment and penalties case applied by the Federal Tax Authority. In a statement on Monday, it said the court rejected the case and obliged the plaintiff to pay the expenses and waive the fees.
It said the court canceled the objected decision and ruled again to cancel all administrative penalties. All other requests were rejected by the court who obliged the authority to pay the fees and expenses, DRC said in a statement posted on Dubai Financial Market, where it is listed.
Earlier, the Tax Dispute Settlement Committee in Dubai had also ruled in favor of the company.
Earlier, the FTA had contended the DRC owed it Dh20.8 million on the stock of drinks held by the company in 2017, prior to the introduction of VAT, which came into effect from January 1, 2018. The Committee had ruled that the company owed only Dh8.8 million in taxes to the Authority.
Dubai Refreshment posted Dh18.65 million net profit for the first half of 2020 as compared to Dh30.88 million for the same period last year, a loss of 39.6 percent. While the second-quarter profit shrank 83 percent from Dh18.68 million to Dh3.13 million due to the impact of coronavirus.
During the annual general meeting held on March 23, 2020, DRC shareholders approved and paid a cash dividend of Dh0.70 per share, totaling Dh63 million.
VAT applicable for e-commerce sales, says FTA.
Date: 12 Aug, 2020
Abu Dhabi, UAE, 12 Aug, 2020: The Federal Tax Authority (FTA) has clarified that Value Added Tax (VAT) is applied on e-commerce services (also known as “electronic commerce”, sometimes referred to as the “digital economy”) upon their actual use or enjoyment in the UAE. Note that although many of the general rules of VAT apply to e-commerce, there are a number of special rules that apply specifically to e-commerce transactions.
This guide issued by the FTA clarifies how the VAT Law applies to the supply of goods and services provided through electronic means, such as the internet or similar electronic networks. The guide incudes guidance on the application of VAT on goods and services supplied within the scope of e-commerce, and the imposition and accounting for VAT on those supplies.
The guide outlines the tax treatment of the supply of electronic services, such as services that are provided directly over the internet, an electronic network, or an electronic market, including the supply of domain names, web-hosting and remote maintenance of programs and equipment, software (including the updating thereof), images, text and information provided electronically such as pictures, screen savers, electronic books, documents and other digitized files, music, movies and games on demand, and online magazines.
Other services identified under the banner of ‘electronic services supplies’ include the supply of advertising space on a website and the rights associated with that advertisement, and Political, cultural, artistic, sports, scientific, educational or entertainment broadcasts, including broadcasts of events, live streaming via the internet, the supply of distance learning services, and services of any equivalent type that have a similar purpose and mission.
The FTA Director-General, His Excellency Khalid Ali Al Bustani, noted: “Tax legislation in the UAE is characterized by transparency and accuracy, and takes into account the strengthening of the nation’s leadership position as a central economic and commercial center, not only regionally but also at a global level. In light of the increasing importance of the e-commerce sector, clear mechanisms for procedures have been identified. Value Added Tax, as it relates to the supply of goods and services through electronic means, contributes to supporting the activities of this vital sector, which depends on a locally developed digital and technological infrastructure.”
His Excellency added: “The Federal Tax Authority is keen to apply the best international standards in all its activities and the services it provides to its customers, and to contribute to preserving the advanced competitive position of the country across all sectors, with the means to encourage creativity and innovation.”
His Excellency Khalid Al-Bustani asserted that the FTA is making continuous efforts to contribute to supporting the national economy in general, and the digital economy. His Excellency mentioned, in particular, that the e-commerce sector is witnessing rapid growth, as the UAE is one of the fastest growing e-commerce markets in the region, enhanced by the availability of an advanced digital infrastructure, and a growth-friendly legislative environment.
The FTA indicated that all goods and services purchased through online shopping sites are subject to 5% VAT if the place of supply is in the UAE, like any other purchases made by traditional means, as per the special provisions governing the tax treatment of supplies.
The guide, which has been published on the FTA’s website, www.tax.gov.ae, makes the point that in traditional trade transactions, goods and services are usually supplied from a physical location such as a store or representative office, with the supplier or recipient present at the same site. For e-commerce, however, it generally refers to the supply of goods and services that take place on the internet or similar electronic networks, where goods and services are obtained or supplied through electronic means such as computers or mobile phones via websites or electronic applications (apps).
The guide also provides guidance on the VAT treatment of goods purchased through electronic platforms and services supplied through electronic means, indicating that taxable persons should charge VAT to customers when supplying taxable goods or services (generally, at the standards rate of 5%, or where the VAT Law permits, at a rate of 0%). If the supplies are exempt from tax, these supplies are not treated as a taxable supplies and therefore no VAT needs to be charged on these supplies.
The FTA clarifies in its guide that different conditions and requirements may apply to mandatory or voluntary registration, depending on whether a person has a place of residence in the UAE. A person has a place of residence within in the UAE for the purposes of VAT registration if he has a place of establishment in the UAE.
The guide also deals with the legal requirements for compulsory and voluntary registration, noting that a non-resident may not register voluntarily for VAT on the basis of his ‘taxable expenses. Furthermore, the guide sets out the criteria for determining the place of supply (whether it is inside or outside the UAE), the VAT treatment for supplies of goods through online platforms where the suppliers are UAE residents who are subject to tax, and for suppliers who are not resident in the UAE.
The guide also provides more information on the procedures for recovering input tax on e-commerce transactions and the application of the ‘reverse-charge mechanism’ which could apply on e-commerce transactions. The revers-charge mechanism aims to reduce the burden of compliance and the administrative burden related to collecting VAT from non-resident suppliers. It levels the playing field between the supply of services or goods from a supplier outside the UAE and by a local supplier. This ensures that local UAE suppliers in the country are not prejudices as a result of consumers purchasing online from foreign suppliers.
All other aspects related to the tax treatment of supplies made through agents and the requirements for tax invoices in e-commerce transactions are detailed in the guide, which is available on the FTA’s website, www.tax.gov.ae.
FTA continues to accomplish achievements, says Hamdan bin Rashid
Date: 21 Jul, 2020
Abu Dhabi – July 2, 2020:
H.H. Sheikh Hamdan bin Rashid Al Maktoum chairs first FTA Board of Directors meeting since Cabinet reconstitution
The FTA Board of Directors, chaired by His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of the FTA Board of Directors, has held its first meeting since the UAE Cabinet of Ministers approved the decision to reconstitute the FTA’s Board of Directors.
During the virtual meeting held on Monday morning, His Excellency Obaid Humaid Al Tayer, Minister of State for Financial Affairs, was elected as Vice Chairman of the FTA’s Board of Directors.
- The FTA continues to accomplish positive results and achievements, reflecting the strength of the national economy despite challenges faced by the global economy due to the effects of combating the spread of COVID-19.
- The FTA supports taxpayers in fulfilling their obligations by efficiently providing services remotely.
- AED 206 million in tax refunds for 3,124 for UAE Citizens building new residences -a growth of 136.7% over a period of 6 months.
- An increase of VAT registrants to 335,530 and Excise Tax registrations to 1,159.
UAE's Federal Tax Authority issues warning over VAT scam
Date: 10 Sep, 2019
The UAE’s Federal Tax Authority on Tuesday issued a warning after reports of scammers trying to target bank customers over VAT refunds.
In response to reports that some bank customers have received emails from unidentified sources impersonating banks and financial institutions requesting personal data in the promise of helping them claim VAT refunds, the FTA reaffirmed that they can only be processed through its official website.
The authority said that some recipients have been asked to provide personal data, including names, credit card numbers, and PIN codes, claiming that providing the information will allow them to recover VAT.
“Refunding taxes for legally eligible applicants is a direct transaction between the registered business and the FTA, and does not call for any intermediaries,” it said in a statement.
“The process is completed via advanced electronic systems, available on the FTA’s official website, which includes security features for financial transactions. It is done through official channels using the International Bank Account Number (IBAN), and via systems under the authority of – and electronically linked to – the UAE Central Bank.”
The FTA warned all registered businesses, calling on them to remain vigilant and maintain the confidentiality of their personal data.
FTA's dialogue led to smooth VAT implementation in the UAE, says Abdulla Al Gurg
Date: 10 Sep, 2019
The UAE’s Federal Tax Authority’s (FTA) dialogue with larger corporations will eventually trickle down to smaller traders, among whom the value-added tax (VAT) process has sometimes been problematic, according to according to Abdulla Al Gurg, the CEO of the Easa Saleh Al Gurg Group (ESAG).
According to Al Gurg, ESAG – which is the exclusive UAE agent for the British American Tobacco Company and its subsidiaries – is one of the most significant sources of revenue from VAT and excise tax in the country.
Despite some concerns that were expressed ahead of the implementation of VAT, Al Gurg said he believes the process was overall handled smoothly.
“I respect them [the FTA] and admire their hard work creating something from nothing,” he said. “It must have been a huge challenge to take it from the point of just being an instruction to the point of actual being a thing that we live by.”
Al Gurg added that “everything has a process, and I think it couldn’t have been better”.
“I admire the approach and willingness of discussion they had with us,” he added.
“You don’t get a lot of government entities that are very open in dialogue.”
Although he said that some – particularly smaller companies – have faced difficulties with the VAT process, he is confident that the FTA’s willingness to address them with larger companies will have a trickle-down effect on the economy.
“I’m not saying there are no problems, but when there is a problem, it is handled and taken care of,” he said. “Maybe the small traders don’t feel that way. It’s a very different experience
“But if they are willing to change for us, the effects will ripple through,” he added. “It just needs a bit more patience.”
In June, the government announced that it collected AED 27 billion in VAT last year, far exceeding its target of AED 12 billion.
IMF says VAT should be doubled to 10% in Saudi Arabia
Date: 09 Sep, 2019
The International Monetary Fund (IMF) has suggested that the value-added tax (VAT) should be doubled from five percent to 10 percent in Saudi Arabia in consultation with the other Gulf countries.
Analysts expect the hike in VAT rate will come only after 2021 once Kuwait and Oman will also be ready to implement it and as a customs union, the increase makes sense across the GCC countries.
“The introduction of the VAT in January 2018 was a landmark achievement, with revenue collections exceeding expectations. The reduction in the registration threshold at the beginning of 2019 has also gone smoothly. Staff suggested that consideration be given to raising the VAT rate from 5 to 10 percent, in consultation with the GCC,” IMF said in a report prepared its staff after consultation with the authorities in the Kingdom.
The UAE and Saudi Arabia introduced the five percent value-added tax from January 2018 with both the countries surpassing their tax collection targets.
Thaddeus Best, an analyst at Moody’s Sovereign Risk Group, said as a customs union, it is logical that GCC countries would seek to keep their VAT rates harmonised in order to prevent tax arbitrage opportunities emerging within the GCC.
“However, as the hesitant implementation of five percent VAT across the GCC since 2018 shows, there is some scope for VAT differentials to be tolerated, so long as they are relatively small and temporary, as it is currently the case in the GCC with only three out the six countries having implemented the measure so far. Nevertheless, we think it is unlikely that Saudi Arabia, the UAE and Bahrain would raise VAT rates further until the remaining GCC sovereigns have finalised their VAT frameworks,” Best told Khaleej Times.
VAT receipts set to boost Ras Al Khaimah surplus in 2019, says Fitch
Date: 06 Sep, 2019
Fitch Ratings has affirmed Ras Al Khaimah’s long-term foreign-currency issuer default rating (IDR) at ‘A’ with a stable outlook, saying the emirate has a low and declining government debt burden and high GDP per capita.
The ratings are also supported by the benefits of RAK’s membership of the UAE, while the emirate’s small size and weaknesses in the policy framework weigh on the ratings, Fitch said in a statement.
“The emirate derives substantial support from its membership of the UAE… Close integration within the UAE has allowed the emirate to focus on its development strategy and build a relatively diversified economy dominated by manufacturing and services,” it added.
Fitch said it expects the debt of the government and its state-owned enterprises to fall to below 20 percent of GDP in 2019 from 33 percent in 2015.
It added that the debt will fall further to close to 17 percent of GDP in 2020 as the government uses VAT receipts for the early repayment of AED678 million of private placements.
Fitch noted that the government’s fiscal surplus increased to 2.6 percent of GDP in 2018 from 1.4 percent in 2017, buoyed by the recovery of mining and quarrying activities and receipts from the sale of the government’s 41 percent stake in Union Cement Company.
Fitch also forecast a fiscal surplus of 2.7 percent of GDP in 2019, largely underpinned by RAK’s receipt of close to two years’ worth of VAT, amounting to over 2 percent of GDP.
VAT was introduced in the UAE in 2018 and collected at the federal level, but an agreement on the share to be remitted to individual emirates was only reached in early 2019, which delayed the disbursement of the first year’s collection.
Fitch added that GDP growth will slow slightly to 2.5 percent in 2019 from 2.8 percent in 2018 as the momentum from the rebound after the Qatar embargo fades and UAE-wide growth is expected to remain muted while the development of RAK’s container port could also spur new investment in the free zones and the broader economy.
However, the continuation of the housing market slump in Dubai has led to a reduction in building permits and mortgages issued in RAK and could also weigh on tourism, Fitch said.
Decreasing hotel occupancy rates were seen during the first half of 2019 although they remain high.
“The government is making progress on developing the emirate as a tourist destination, and a doubling of hotel capacity by 2023 is in the pipeline. A further escalation of tensions between Iran and the US and its regional allies could also have repercussions for RAK,” Fitch noted.
VAT registration call for BD 18,750–500,000 generating entities
Date: 03 Sep, 2019
External URL: https://www.nbr.gov.bh/releases/57
The National Bureau for Revenue (NBR) highlighted that the VAT registration process is open for entities generating or expected to generate between BD 18,750 and BD 500,000 in annual vatable supplies.
Concerned entities that wish to register early for VAT with the NBR will have the option of choosing the date to start implementing VAT until the end of the grace period. The NBR stressed that collaboration and raising awareness on technical and procedural aspects of VAT are of utmost importance to ensuring the success of the VAT application process.
The NBR noted the positive cooperation provided by businesses regarding the proper application of VAT, adding that more than 4500 entities have registered for VAT since its launch within the Kingdom on 1 January 2019.
For further information, please contact the Call Center on 80008001 or email email@example.com, in addition to leveraging the information available on NBR’s website (www.nbr.gov.bh), Twitter, Instagram and YouTube channel.
How to make 'recovery of cost' under VAT
Date: 27 Aug, 2019
Taxability of ‘recharges’, typically applicability of VAT is a subject matter of debate and interpretation across the VAT jurisdictions. The term ‘recharge’ also commonly known as ‘recovery of cost’ is generally not defined in the legal statues but has gained significant importance from a VAT determination viewpoint, purely because it is not clear whether a recharge in itself involves any supply of goods or services attracting VAT.
A recharge happens when there are three entities involved. For example, Entity B incurs costs charged by Entity A which are then recharged by Entity B to Entity C. In each of the supplies, the VAT treatment could potentially change, depending on nature of the transaction, relationship between the entities and whether recharge is at cost or with a mark-up.
The challenge in determining the VAT liability for recharges are multi-fold.
First, it needs to be determined whether the costs that are recharged were incurred for customer’s direct benefit or were they, in fact consumed by the supplier and later recharged to the customer.
Second, it needs to be determined whether the recharge in itself constitutes an independent supply or is it ancillary to the principal / main supply. Also, it is equally important to ascertain whether the person reimbursing the amount is acting in the capacity of an agent (i.e. recovering payment made on behalf of another person) or recovering the expenses incurred as a principal.
FTA begins procedures on updated excise goods
Date: 24 Aug, 2019
External URL: http://www.wam.ae/en/details/1395302781424
The Federal Tax Authority, FTA, has begun carrying out procedures related to implementing the latest Cabinet Decision on Excise Goods, Excise Tax Rates, and the Method of Calculating the Excise Price, issued in August 2019, which expanded the scope of excise goods to include electronic smoking devices and liquids, and sweetened drinks.
The new Decision goes into effect on 1st January 2020, adding these products to the list of Excise Goods, which included tobacco and tobacco products, energy drinks, and carbonated drinks – products that have been subject to Excise Tax since 1st October 2017.
In a press statement issued today, the Authority asserted that the new Decision is part of the government’s continuous efforts to promote healthy lifestyles in the UAE community and curb the spread of diseases stemming from consumption of harmful goods. These measures align with the UAE Vision 2021, which seeks to ensure the UAE is among the best countries in the world across all sectors.
As part of the first phase of implementing the Cabinet Decision, the FTA called on producers, importers, and stockpilers of sweetened drinks with added sugar to abide by the Decision and start registering for excise tax purposes, noting that Excise Tax is an indirect tax that is imposed on certain products deemed harmful in an effort to curb their consumption.
The Authority revealed that it has updated the electronic registration system for excise goods to allow for adding the new products included in the amended Cabinet Decision.
An entirely new registration procedure was put in place as of 18th August 2019, and the FTA called on all concerned businesses – including producers, importers, and stockpilers of Excise Goods – to take the initiative and register said goods in the new system.
Transfer of a Business as a Going Concern - VATP015
Date: 22 Aug, 2019
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.
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
UAE Cabinet to expand list of excise taxable products in January 2020
Date: 21 Aug, 2019
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
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.
MoF announces amendment of the Cabinet Decision on excise goods, rates
Date: 21 Aug, 2019
External URL: http://www.wam.ae/en/details/1395302781065
In order to direct efforts towards reducing the negative effects of harmful consumption patterns, the Ministry of Finance announced the details of the amendment of Cabinet Resolution No. (38) of 2017 regarding excise goods, excise tax rates and the formula to calculate the excise price.
In addition to the goods currently subject to excise tax (i.e. tobacco products, soft drinks and energy drinks), excise tax will also be imposed on e-cigarettes and the liquids used with them, as well as beverages sweetened with added sugar.
The decision to amend excise goods and the formula of calculating excise price is to achieve government directives in terms of rationalizing consumer behavior related to harmful products, which contributes to raising community members’ public health levels, and reducing the negative health consequences caused by these products. This decision is in line with the UAE’s commitment to implementing the GCC Unified Agreement for Excise Taxes and to complement efforts to achieve economic integration among the GCC countries.
Obaid bin Humaid Al Tayer, Minister of State for Financial Affairs, pointed out that these new amendments to the Cabinet’s decision on excise tax are part of the UAE’s keenness to reduce harmful consumer practices by establishing a legislative and procedural base that supports national efforts to curb unhealthy practices that cause chronic diseases.
He said: “These amendments comes in line with the government’s orientation that excise tax policy targets consumption patterns harmful to public health, in order to complement efforts to raise awareness about the damaging effects of consumables harmful to health. It contributes to strengthening the health system’s work in controlling prevalent diseases and reducing the cost of treating them, promoting community health, motivating individuals to spend effectively, reducing the negative impact of harmful substances on the environment, and encouraging producers to develop better alternatives.”
Pursuant to these amendments, effective 1 January 2020, a 100% excise tax on electronic smoking appliances and liquids used in these devices, and 50% excise tax on beverages and sugary drinks has been set. These goods were identified in addition to existing excise goods such as tobacco and tobacco products (100%), energy drinks (100%) and soft drinks (50%). The decision also specified the formula of calculating the excise and retail price, and the Federal Tax Authority (FTA) shall have the power to determine the procedures necessary to prove the classification of any product as an excise good.
At the same time, the Cabinet set the minimum standard price for tobacco products, which set the excise price of tobacco products not less than 0.4 dirhams per roll of cigarettes, and 0.1 dirhams per gram of hookah tobacco, ready-to-use tobacco and similar products. The Minister of Finance will issue a decision on the implementation date, which is set to be before 1 January 2020.
Sugary drinks to cost more in UAE from January 2020
Date: 20 Aug, 2019
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
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.
New UAE tax rule on two products from November 1
Date: 19 Aug, 2019
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
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
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).”
What is the penalty for not submitting a tax return on time?
Date: 12 Aug, 2019
The Federal Tax Authority always gives businesses a minimum of 28 days after the end of the reporting quarter to prepare and file their VAT return. When the 28th of the following month falls on either a Friday or Saturday, the deadline moves to the next working day. Any VAT returns not filed by the given deadline should be submitted as soon as possible afterwards. The FTA portal will allow you to file a return for a quarter after the deadline has passed. In fact you cannot file another VAT return until you have filed the previous one, so it forces you to file returns sequentially, even if you have missed a deadline.
The FTA impose separate penalties for failing to file a return and failing to make payment by the given deadline.
There is an automatic penalty for missing a filing deadline which is Dh1,000 in the first instance and then Dh2,000 for subsequent missed deadlines within 24 months.
If you fail to settle the tax due by the deadline you will be charged 2 per cent of the unpaid tax, which is charged immediately after the due date. This rises to 4 per cent of the unpaid tax if you have not paid up within seven days of the deadline. If you have still not paid a month after the deadline, you are charged at a rate of 1 per cent each day until the penalty reaches 300 per cent of the tax due. Note that if you make a payment but fail to file the corresponding return, the FTA will not recognise the payment until the return is filed.
Dubai businessman Khalaf Al Habtoor urges for end to Skype ban in UAE
Date: 07 Aug, 2019
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
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
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
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.
“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
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
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
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
– 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
– 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
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
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
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
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.
UAE must allow itself flexibility on tax regime
Date: 23 Jul, 2019
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
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.
Federal Tax Authority showcases progress made on Indirect Taxes in the UAE
Date: 18 Jul, 2019
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
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
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
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
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
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
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!
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
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
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
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
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
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
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
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
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
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
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
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
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
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.
NBR holds an interactive workshop for representatives working in the service sector
Date: 20 Jun, 2019
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
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
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.
- 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.
- 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.
- 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
- To register for VAT, VAT payers must first create NBR profile.
- 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.)
- The VAT payer submits the profile creation request. This NBR profile can be created online.
- If VAT payer’s NBR profile is approved, they will be provided with login details to access the registration form.
- The registration form can be completed in a “single click”. This registration form can be accessed online.
- 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
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
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
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
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
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.