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UAE and Saudi Arabia deepen ties to strengthen anti-money laundering efforts

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The UAE and Saudi Arabia, the Arab world's two largest economies, are stepping up efforts to strengthen anti-money laundering regulations and to use knowledge transfer to combat the financing of terrorism, state news agency Wam said on Sunday.

An official delegation from the Emirates, headed by Ahmed Al Sayegh, Minister of State, and the Central Bank of the UAE governor Khaled Balama, visited the kingdom on July 13 and 14.

"The visit of a high-level delegation of experts from the UAE comes within the framework of enhancing co-operation with our strategic partners ... in addition to exchanging experiences and expertise as part of effective communication with the relevant Saudi governmental agencies," Mr Al Sayegh said. Read more..

 

UAE Central Bank issues new guidelines on implementing sanctions

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The Central Bank of the UAE has issued new guidelines governing the implementation of sanctions related to anti-money laundering and combatting the financing of terrorism (AML/CFT).

The guidance, which came into effect on July 8, instructs licensed financial institutions to “develop, implement and regularly update an appropriate sanctions compliance programme encompassing a robust risk assessment, screening process and staff training programme”, the regulator said in a statement on Monday.

“This should be applied across their institutions, including branches, subsidiaries, and other entities in which LFIs hold a majority interest.”

LFIs include banks, finance companies and foreign exchange businesses. The guidance has been issued to help them effectively meet their obligations and they must be able to demonstrate compliance within a month of them being issued, the central bank said in its statement. Read more..

 

FTA urges registrants to take advantage of penalty redetermination

The Federal Tax Authority (FTA) has called on tax registrants in the UAE to benefit from the penalty redetermination scheme introduced by Cabinet Decision No. 49 of 2021 on amending some provisions of Cabinet decision No. 40 of 2017 on the administrative penalties for violation of tax laws in the UAE, which will be effective from June 28, 2021.

In a press release on Saturday, the FTA stressed the three conditions that must be met in order for tax registrants to benefit from the re-determination of unpaid administrative penalties imposed prior to 28 June 2021, to equal 30 per cent of the total unpaid penalties.

The first condition is that the administrative penalty must have been imposed under Cabinet decision No. 40 of 2017 before June 28, 2021, and some or all of it remains outstanding.

The second condition is that the tax registrant settles all payable tax by December 31, 2021, so that there is no outstanding tax payable by the end of 2021. Read more..

 

UAE urges DNFBP executives to fight money laundering and terrorist financing

UAE ministers and government officials have urged executives from Designated Non-financial Businesses and Professions to raise awareness about how to combat money laundering and the financing of terrorism.

DNFBPs include professions outside the financial services sector that have heightened anti-money laundering/combating the financing of terrorism (AML/CFT) exposure.

The discussions focused on onshore and offshore DNFBPs, highlighting the UAE’s AML/CFT framework and practical actions to improve public-private sector collaboration in this area, state news agency Wam said on Monday.

“An effective system to combat money laundering and terrorist financing begins with an active and engaged partnership between the public and private sectors. Financial institutions have a core role to play, but so do DNFBPs,” Ahmed Al Sayegh, Minister of State, said in a statement to Wam. Read more..

 

Why companies must comply with AML regulations right now

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To combat money laundering and adhere to international regulations, the UAE last month issued new guidelines on anti-money laundering (AML) and combating the financing of terrorism (CFT). This is in addition to the strict laws and numerous measures the emirates already had in place to fight financial crimes.

What necessitated these additional guidelines?

Too many companies have not been taking compliance seriously and do not implement compliance processes internally because they believe they do not fall within the category of regulated financial institutions. A few have been taking advantage of confidentiality policies offered by free zone entities while others have been benefitting from being in non-financial or professional sectors. But now it is set to change as regulations have broadened its footprint with new focus on non-financial businesses and professional sectors such as real estate agents, gold dealers, auditors and corporate service providers. Read more..

 

Imposition of fines on UBO violators to start on July 8

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Imposition of fines up to Dh100,000 and other penalties for non-compliance with the “ultimate beneficiary owner (UBO) procedures” will begin from July 8, the Ministry of Economy (MoE), warned on Monday.

The MoE, in cooperation with the concerned licensing authorities in the country, announced that it has already begun implementing the first phase of administrative penalties, including written warnings to non-compliant establishments from July 1, 2021.

The ministry said the implementation of the second phase of administrative penalties on establishments that fail to adopt the necessary measures to correct their status during this period will start on Thursday. In this phase, fines stipulated by Cabinet Resolution No.53 of 2021 will be imposed on non-compliant establishments. Read more..

 

UAE Central Bank issues anti-money laundering guidelines for licensed financial institutions

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The UAE Central Bank issued new guidance on Saturday to help financial institutions to combat money laundering and terrorism financing.

Lenders and other licensed institutions  in the country have been asked to report activities they suspect may be linked to money laundering, terrorism financing or criminal offences, the regulator said.

The reports will be filed directly to the UAE’s Financial Intelligence Unit through the goAML portal within 35 days of detection.

The guidance is aimed at strengthening efforts to enhance the effectiveness of licensed financial institutions in enforcing "crime-combatting measures”, said Central Bank governor Khaled Balama. Read more..

 

UAE's Ministry of Economy steps up campaign on ownership rules

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The UAE's Ministry of Economy said on Tuesday it has taken more steps to ensure compliance with ultimate beneficiary ownership procedures – a crucial step to improve transparency within the economy and effectively prevent money laundering.

As part of the latest update, the ministry said it will allow licensing authorities in commercial freezones and those across the country to penalise companies that do not comply with the ultimate beneficiary ownership procedures.

"The submission of ultimate beneficial owner data is a necessary step to effectively disclose and reveal the complex structures related to the chain of ownership and its beneficial owner in licensed establishments in the UAE," the ministry said in a statement. Read more..

 

Penalties for non-submission of UBO data from July 1

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The Ministry of Economy (MoE) said on Tuesday that that it has adopted additional steps to ensure the compliance of firms with the requirement to submit and make available the information about the ultimate beneficial owners (UBO) as the deadline ends on June 30.

The move is part of the initiatives underway to strengthen the UAE’s anti-money laundering and combating terrorism financing drive.

As part of the new measures, the licensing authorities in all emirates and in the commercial free zones have been given the authority to impose administrative penalties and fines on non-complying establishments that fail to adhere to the UBO requirements, the MoE said in a statement.

The implementation of penalties for non-compliance will start as of July 1, 2021. Read more..

 

How UAE engages financial institutions to combat money laundering

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Authorities in UAE have brought together key supervisory and regulatory bodies with financial institutions to discuss the importance of public-private engagement.

This is for the purpose of operating a sophisticated international financial crime compliance regime.

The objective of the UAE’s engagement with onshore and offshore financial institutions focuses on the monitoring, reporting and analysis of suspicious activity through the Suspicious Activity Reporting (SAR) regime, the corporate registries, and other information-sharing channels.

By forming closer ties between public and private entities, the UAE can ensure that data received from the private sector is accurate, complete and actionable to assist all agencies – from the supervisory authorities to the judiciary – in their collective fight against illicit finance. Read more..

 

Get ready to face fines of up to Dh100,000 in case of ‘ultimate beneficial owner’ breaches

UAE has launched a campaign to ensure that 513,000 non-financial corporations, regulated by 38 licensing authorities, provide information on ultimate beneficial owners.

“Money laundering and terrorist financing crimes are a major source of concern plaguing most of the world economies, especially today with the advent of modern digital technologies in the financial sector, trade and investment activities and doing business,” said Safeya Al Safi, director of the Anti money laundering department at the Ministry of Economy.

The ultimate beneficial owner (UBO) is the person who directly or indirectly owns and controls a company.  Persons with ownership of at least 25 percent of the shares and voting rights of a company, or anyone with the power to dismiss and appoint a majority of directors of a company, are considered a UBO. Read more..

 

Non-registration with AML system to invite Dh5m fines, business closure

More than 13,000 business firms have so far registered with anti-money laundering system as the UAE stepped up efforts to raise awareness about the AML and terrorism financing crimes by imposing fines of up to Dh5 million for non-registration, the Ministry of Economy said on Monday.

The UAE, one of the first countries to build an integrated system to counter money laundering and combat the financing of terrorism, has rolled out an AML drive to ensure a compliance rate of 70 per cent of the registration requirement, said Safeya Al Safi, director of the Anti-Money Laundering Department at the MoE.

Addressing the press conference, she urged establishments included in the Information Unit System to use the leading digital platform to file Suspicious Transaction Reports (STRs) and Suspicious Activity Reports (SARs). This will enhance the ability of the regulatory authorities to analyze and evaluate risks and take the necessary actions and measures accordingly, Al Safi added. Read more..

 

Federal Tax Authority: Any person or group has the right to apply for a reduction or exemption for Tax Law violation penalties

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, which is 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 law or the tax law may submit such a request to the FTA to reduce or exempt from the penalties imposed by the FTA in accordance with a set of conditions. Read more..

 

UAE's Ministry of Economy unveils campaign for companies to comply with 'ultimate beneficiary' rules

The UAE’s Ministry of Economy has started a campaign to ensure that more than 500,000 non-financial businesses in the country submit data on their ultimate beneficiaries.

Property brokers, account auditors, dealers of precious metals and gemstones and corporate services providers are being encouraged to register the required data before the campaign ends on June 30, said Safeya Al Safi, director of the ministry's anti-money laundering department, yesterday.

Declaring a company’s ultimate beneficiary is “one of the main requirements for completing disclosure and transparency requirements from enterprises and individuals within the anti-money laundering system in the country”, Ms Al Safi said.

“The ministry seeks to enhance understanding and raise awareness among these establishments ... [about] the dangers of money laundering, their methods and means of protection against it.” Read more..

 

UAE reduces penalties for violating tax laws

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The Federal Tax Authority (FTA) on Saturday announced a relief to businesses by reducing penalties to facilitate them in filing an accurate tax returns by June 27, 2021.

In a statement, the FTA said 16 types of administrative penalties have either been reduced or had the method of calculation amended under the latest initiative in line with Cabinet Decision No. 49 of 2021 about amending some provisions of the Administrative Penalties for Violation of Tax Laws in the UAE, is designed to support tax registrants and help them fulfil their tax obligations.

Khalid Ali Al Bustani, director-general of the Federal Tax Authority, 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. Read more..

 

UAE Ministry of Economy approves action plan to identify beneficial owners of 400,000 companies

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The UAE's Economic Integration Committee approved an action plan to identify beneficial owners of more than 400,000 companies registered in the country as it ramps up enforcement of laws on anti-money laundering and combating the financing of terrorism.

As part of the plan, companies need to register their real beneficiary and list the required data with their regulatory body's licensing systems, a statement from the Ministry of Economy said on Tuesday.

“The move supports the national efforts in the field of combating money laundering and the financing of illegal organisations, thereby enhancing the UAE’s position in the relevant global indicators,” the ministry said. Read more..

 

UAE: Companies issued fines of Dh450,000 each for violations

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The Ministry of Economy (MoE) is conducting an extensive inspection campaign targeting establishments belonging to the Designated Non-Financial Businesses and Professions (DNFBPs) sector to ensure their compliance with the regulations approved for countering money laundering and combating financing of terrorism and illegal organisations.

DNFBP establishments were allowed three months’ time to register in the two systems and to put in place due diligence procedures that enable them to file suspicious activity reports, before the end of the grace period in the beginning of May.

The inspection campaigns detected violations committed by a number of establishments by failing to register procedures and failing to adopt the necessary measures to confront money laundering. The violations committed by a large gold trading group in Dubai amounted to Dh1,350,000. Three companies belonging to the group were issued fines of D450,000 each for violations of 8 aspects of the executive regulations. Read more..

 

Saudi Arabia: Declare cash, jewellery or face money laundering charges

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Passengers entering or leaving Saudi Arabia and carrying SR60,000 or more in cash are obliged to report it to any customs control unit or official enquiring about it, Saudi Public Prosecution said on its Twitter account.

“Travellers who fail to disclose, or provide false declaration about, SR60,000 in cash or equivalent means of payment, gold bars, precious metals, gemstones, or jewellery could face money laundering charges,” the Public Prosecution warned.

The term cash includes banknotes and coins that are legal tender, orbanknotes and coins that are not legal tender, but that can still be exchanged for currency that is legal tender, and certain securities such as savings bonds, cheques, travellers‘ cheques, shares, and drafts. Read more..

 

Saudi Arabia to reconsider VAT after achieving economic objectives

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The Kingdom of Saudi Arabia (KSA) will reconsider value-added tax (VAT) after it has achieved certain objectives related to its economy and economic growth, a senior official has said.

Mohammed Al Jadaan, Saudi Arabia’s Minister of Finance, said increasing VAT to 15 per cent was the best decision among the tough choices that the government had to make last year.

“Saudi Arabia will reconsider the value-added tax upon achieving certain objectives, such as the Kingdom’s gross domestic product growth, economic broadening, and a steady rise in oil price,” Al Jadaan said, according to the Saudi Gazette.

KSA increased VAT from five per cent to 15 per cent from July 1, 2020. This decision was taken by the Saudi government in response to the economic impact of Covid-19 and the decline in revenues from lower oil prices. Read more..

 

UAE’s decision to reduce tax penalties a big relief for private sector

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The recent decision by the UAE Cabinet to reduce tax penalties will encourage companies and individuals to make voluntary disclosures if they made a mistake in their tax re-turns and it will also provide them big relief during the pan-demic, say tax experts.

Mayank Sawhney, managing director at MaxGrowth Consult-ing, said the reduction in late payment penalties for VAT or Excise Tax from six per cent in the first month and one per cent per day to two per cent for the first month and four per cent per month after that, will offer a big relief to the busi-nesses facing cash crunch due to tough market conditions and they are not able to settle their tax liabilities on time. Read more..

 

UAE tax authority warns influencers that free gifts and experiences are taxable

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Influencers could be evading the UAE’s tax regime by failing to declare free gifts and experiences.

The Federal Tax Authority issued a bulletin with advice to influencers and artists this week, reminding them they must pay 5 per cent VAT if they earn more than Dh375,000 annually.
Services that are subject to the tax include any paid promotional work, such as plugging a product, company or place online.
Physical appearances and access to influencers’ networks on social media are also taxable, it said.

However, they must also count the cost of any free products or experiences they receive in return for their services, the FTA said. Read more..

 

FTA conducts 2,707 field inspection visits aimed at protecting consumer rights and combating tax evasion

The Federal Tax Authority, FTA, has conducted more than 2,707 field inspection visits in cooperation with the competent authorities through 35 inspection campaigns across UAE markets in the first quarter of 2021, Q1-21, as part of its ongoing oversight efforts to protect consumer rights and increase the level of tax compliance.

 FTA Director-General, His Excellency Khalid Ali Al Bustani, confirmed that the sophisticated, cutting-edge tools adopted by the Authority during inspections enable inspection teams to d 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 Value Added Tax (VAT) obligations. Read more..

 

Covid impact: UAE reduces penalties on VAT, excise tax

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The UAE has reduced old 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. Read more..

 

Saudi Arabia has no plans to introduce income tax: Crown Prince Mohammed Bin Salman

Saudi Arabia is not planning to introduce income tax, while the 15 per cent VAT rate is a temporary decision for five years, Crown Prince Mohammed Bin Salman said in a TV interview on Tuesday.

Speaking on the Rotana Khaleejiah channel, the Crown Prince spoke about the Kingdom’s economic plans, developments and achievements made since the launch of the Saudi Vision 2030.

The interview marks the fifth anniversary of the Vision 2030, which aims to diversify Saudi Arabia’s economy without reliance on oil.
“There are no plans at all the introduce any income tax in the Kingdom of Saudi Arabia. The 15 per cent VAT rate is imposed for five years only,” the Crown Prince said.
 Read more..

 

UAE: Up to Dh5 million fine for not complying with AML rules

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The UAE’s Ministry of Economy has begun to implement inspection campaigns to ensure targeted firms’ compliance with the registration procedures in line with the anti-money laundering regulations seeking to curb illicit flow of funds and all forms of transnational financial crimes.

The launch of the inspection activity coincides with the expiry of a grace period up to April 30 given to establishments belonging to the Designated Non-Financial Businesses and Professions (DNFBP) category to register in the goAML system and Automatic Reporting System for Sanctions List. The ministry said punitive measures for violating the regulations or failure to register in the systems will come into effect from May 1, 2021. Read more..

 

UAE tax rules relaxed, penalties reduced

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The UAE cabinet has amended the Executive Regulation of Federal Law on Tax Procedures.

The amendment extends the tax notification from 10 to 40 working days. The amendment also covers the time limit for issuing the decision of the Federal Tax Authority to reduce or exempt administrative penalties from 20 to 40 working days from the date of receiving the application.

This came as the Cabinet met on Wednesday. Chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, it approved several strategies. Read more..

 

Oman exempts 500 food products from VAT

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Close to 500 food products commonly used in Oman will be exempt from Value Added Tax once it comes into effect, local media reported.

VAT is expected to come into effect across the country on April 16. Under the scheme, the number of basic food commodities charged a zero rate VAT will be increased to 488 from 93.

Electrical consumption
Furthermore, all VAT charges related to electricity consumption for citizens who have up to two residential category subscriptions will be paid by the government. This includes families that were previously eligible for government support for the two connections. Read more..

 

UAE anti-money laundering: Registration for non-financial entities, individuals extended until April 30

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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.

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.

The ministry explained that the targeted companies, which include brokers and real estate agents, auditors, dealers of precious metals and gemstones, and corporate service providers, are required to undergo registration, which is mandatory and for free, before the end of the new deadline, in the goAML system and the automatic reporting system for sanctions lists and take the necessary measures to achieve complinace with the requirements of Federal Law No.20 of 2018. Read more..

 

Oman exempts some sectors from tax until end of year

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Muscat’s 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), local media reported.

The move comes as part of the Capital’s efforts to support businesses in the wake of coronavirus crisis.

According to the statement issued, the Muscat Municipality said it has decided to suspend collecting taxes from hotels, tourist restaurants, cinemas, amusement, and entertainment centres until December 2021. Read more..

 

UAE's importers need a VAT re-check to take goods out of free zones for GCC shipments

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UAE businesses bringing out goods from free zones for shipment to other Gulf states have to tick another box on their VAT checklist. In specific terms, they have to be sure where they stand on ‘VAT 301’ to make sure they don’t face delays in clearing goods from the free zones.

To avoid all such delays, they will need to take an 'exception approval' from the Federal Tax Authority to clear the goods. The FTA (Federal Tax Authority) had restricted the use of VAT 301 from February 23.

For normal imports destined for the UAE itself, VAT-registered importers should link their custom code with their TRN (Tax Registration Number). In such cases, the import VAT liability is automatically processed into the importer’s periodic VAT returns. There is no additional cost for this category. Read more..

 

Saudi inflation rate falls to 5.2% in February, lowest since VAT hike in July

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Saudi Arabia’s inflation rate fell slightly to 5.2 per cent in February from 5.7 per cent in the prior month, the lowest since the kingdom tripled VAT in July to 15 per cent to boost state coffers hurt by lower oil prices and the coronavirus crisis.

The February rise was again mainly driven by increases in food and beverage prices, which recorded their highest annual increase at 11.2 per cent, the General Authority for Statistics said. Food prices have a weight of 17 per cent in the Saudi consumer basket.

Transport prices increased by 9.8 per cent, mainly due to a 9.9 per cent rise in prices of purchase vehicles. Read more..

 

VAT in Oman: What’s taxable, what’s not

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When Value Added Tax (VAT) law comes into force in Oman on April 16, 2021 following a Royal Decree, the Sultante will become the fourth GCC member state - after the UAE, Saudi Arabia and Bahrain - to introduce the levy.

The country will apply VAT at the standard rate of 5 per cent on most goods and services, with exceptions for essential food items, medical care, education and financial services. According to Oman’s Tax Authority chairman Saud Nassir al Shukaili, this should raise around OMR 400 million (Dh3.8 billion), equivalent to around 1.5 per cent of gross domestic product (GDP). The introduction of VAT is also in line with Muscat’s commitment to the Oman Vision 2040 programme, which aims to diversify the economy away from oil towards non-oil sectors such as logistics, manufacturing and tourism. Read more..

 

Services provided by artists, social media influencers subject to VAT

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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.

The bulletin outlines that VAT applies to such services provided by artists and social media influencers that include, but are not limited to, any online promotional activities performed on behalf of other businesses for a consideration, such as promoting a product in a blog or a video or otherwise 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. Read more..

 

UAE property agents and gold dealers urged to register before March 31 with AML systems

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Real estate agents, gold dealers, auditors and corporate service providers have been urged to register with the relevant anti-money laundering system before the end of March to avoid revocation of licences, the ministry of economy said on Wednesday.

Failure to register with the Financial Intelligence Unit (goAML) and the Committee for Commodities Subject to Import and Export Control system during the grace period could also result in major penalties and closure of non-compliant organisations, officials cautioned.

Fines for not adhering to AML regulations could range from Dh50,000 ($13,613) to Dh1 million and can be doubled to Dh5m. Read more..

 

File your ESR Report latest by 31 March 2021 for the accounting year April 2019 to March 2020

Companies that undertake a Relevant Activity must comply with the Economic Substance Regulations, which includes the annual submission of a Notification and Economic Substance Report.

The deadlines for the Reportable Period are as follows:

● ESR Notification: The later of six months after the financial year end, or 31 January 2021
● ESR Report: The later of 12 months after the financial year end, or 31 January 2021

Failure to submit your Notification and Economic Substance Report on time will result in the application of penalties.

For more information on ESR filing you can get in touch with us or visit our website. Read more..

 

Oman to start implementing VAT from April 16

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Oman will start implementing a 5 per cent value added tax (VAT) from April 16, according to a statement by the Oman News Agency on Sunday.

The tax will help the Sultanate generate about 400 million Omani riyals ($1 billion) in revenue annually, which is equivalent to 1.5 per cent of the total value of gross domestic product.

All six Gulf countries agreed to introduce a 5 per cent VAT in 2018 after a slump in oil prices hit their revenues.

Saudi Arabia, the UAE and Bahrain have already introduced the tax, with Riyadh tripling it last year. Read more..

 

UAE: Full list of fines for money laundering, terror financing

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The UAE's Ministry of Economy has announced the list of violations and fines for money laundering and terrorism financing. The minisry has issued a list of 26 penalties.

The violations pertain to the designated non-financial businesses and professions (DNFBPs) that the ministry supervises. The businesses include four main categories: Brokers and real estate agents; dealers of precious metals and gemstones; auditors; and corporate service providers.

Grace period extended

The grace period for companies to register in two systems to combat money laundering has been extended till March 31. Companies that fail to register will be subject to penalties, including suspension of licences and closure. Read more..

 

UAE businesses that must register in anti-money laundering systems

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The Ministry of Economy (MoE) has listed the businesses that need to register in the anti-money laundering systems before March 31.

These include real estate agents, gold dealers, auditors, and service providers for companies.

Referred to as designated non-financial businesses and professions (DNFBPs), they have been asked to register in the Financial Intelligence Unit (goAML) and the Committee for Commodities Subject to Import and Export Control system (Automatic Reporting System for Sanctions Lists).

Such businesses were given an extended grace period till March 31 to register, in order to avoid penalties, which include licence cancellation and closure. Read more..

 

UAE Ministry of Economy extends anti-money laundering compliance date for four business categories

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The UAE’s Ministry of Economy has extended the grace period until March 31 for certain business categories to be in full compliance with anti-money laundering and prevention of terrorism financing.

Businesses that fail to do so will face fines range from Dh50,000 to up to Dh1 million and can be raised to Dh5 million based on the provisions of the law and according to the assessment of the Supreme Committee for Combating Money Laundering, and Financing of Terrorism and Illegal Organizations.

This applies to activities in four categories - brokers and real estate agents, dealers of precious metals and gemstones, auditors, and corporate service providers. Read more..

 

Income tax on the cards for high income earners in Oman: IMF

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International Monetary Fund (IMF) has reiterated that Oman is planning to introduce income tax on high income earners as part of its medium-term fiscal balance plan.

The Fund welcomed the fiscal balance plan and said introducing value-added tax (VAT) in 2021, a personal income tax on high-income earners being developed, and full-year impact of the expansion of the excise tax base in 2020 are key to reinforcing fiscal sustainability and alleviate financial pressure. In addition, containing the wage bill via civil service reforms; targeting energy subsidies to the most vulnerable groups; streamlining capital expenditure; and broad-based improvements in expenditure efficiency are also key to reforms. Read more..

 

UAE seizes goods worth Dh192 million over tax violations

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The UAE’s Federal Tax Authority (FTA) on Sunday said Dh191.83 million worth of goods were confiscated last year due to violations of the local tax regulations.

The seized goods were subject to excise tax.

The authority seized 9.4 million packs of cigarettes that didn’t carry the digital tax stamps; 14,000kg of Hookah tobacco products; and more than 803,000 packets of other selective goods, including soft, energy and sweetened drinks; electronic smoking devices and tools and liquids used in them. Read more..

 

Oman expects 300m rials VAT revenue in 2021

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Oman is expected to generate 300 million Omani rials ($779m) in revenue through value-added tax this year, according to the country’s finance minister.

The financial impact of the measures taken as part of the 2021 budget plan will reach about 3.5 billion rials, Oman News Agency reported, citing Sultan bin Salem Al Habsi. This includes VAT revenue as well as “improving returns from government investments and broadening excise taxes and improving tax collection”, the minister said.

The Gulf state will start levying 5 per cent VAT on most goods and services in April, with some exemptions. Read more..

 

Saudi Arabia 2020 inflation rises to 3.4% after VAT tripled

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Saudi Arabian inflation rose to 3.4 per cent in 2020, lifted by the tripling of value-added tax last year as the kingdom sought to boost state revenues hit by the coronavirus crisis and lower oil prices, government data showed.

The main drivers were prices of food and beverages, which increased by 9 per cent, and transport, up by 3.8 per cent, the General Authority for Statistics said on Thursday.

Inflation spiked in the second half of last year due to the VAT hike to 15 per cent. The rise followed a mild inflation rate in the first part of the year and a deflationary trend in 2019, when the annual rate was minus 2.1 per cent. Read more..

 

Saudi Arabia extends waiver of fines for VAT till June 30

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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, local media reported.

In a statement, the authority said the move is part of the Kingdom’s initiatives to stimulate the economy and help the private sector face the economic fallout resulting from the coronavirus outbreak.

As part of the initiative, 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 value-added tax (VAT) law. Read more..

 

Saudi authorities clarify which cars are exempt from VAT

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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.

The 15% VAT was enforced as of July 1, but three months later in October, Saudi Arabia exempted property deals from the 15% VAT, as a Royal order instead imposed a 5% tax on real estate transactions. Read more..

 

VAT on PPE kits, masks could do with more clarity

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Many countries during the peak phase of the pandemic announced VAT exemption or a partial reduction of the VAT rate on medical products such as PPE kits, face masks, hand sanitizer, gloves, etc. The UAE is the latest to adopt the decision to apply zero per cent VAT on these products to support frontline healthcare workers and the public.

Under the UAE’s VAT Law, the supply of medicines and medical equipment registered with the Ministry of Health and Prevention attract zero per cent. Interestingly, the question then arises whether a specific cabinet decision to apply zero per cent on PPE kits, masks and sanitizers is required? Did these products not fall under the category of medical equipment and, consequently, always subject to zero per cent? Read more..

 

KSA to get SWF dividend, has no Tax hike plan, says Finance Minister

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Saudi Arabia expects to receive up to 25 billion riyals ($6.7 billion) in dividends this year from its sovereign wealth fund, the Public Investment Fund (PIF), in a one-off measure aimed at boosting coffers battered by low oil prices.

"We called for part of the dividends, so we are possibly going to receive around 15 to 25 billion Saudi riyals in dividends from PIF," Finance Minister Mohammed al-Jadaan told Reuters late on Tuesday, after the announcement of Saudi Arabia's 2021 budget.

He said receiving dividends from PIF's profits was an exceptional decision and that the government generally does not plan to call for dividends from the fund in the future. Read more..

 

Oman plans to amend labour laws and introduce new taxation

Oman plans to amend labour laws, introduce new taxation and end some “long-standing” subsidies while ensuring that low-income families are protected, the Gulf Arab state’s foreign minister said on Saturday.

Sayyid Badr Al Busaidi told the IISS Manama Dialogue summit in Bahrain that significant changes to labour policy would include abolishing a clause that required expatriate workers to secure permission to be able to work under a new employer, which is known as the no-objection certificate system.

The sultanate is currently in the process of removing the system to give residents more opportunities to change jobs without having to wait two years to change employers, as was the case previously. Read more..

 

UAE collects VAT revenue worth Dh11.6bn until August

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Revenue earned from the UAE’s value-added tax amounted to Dh11.6 billion from January until August this year, according to the Ministry of Finance.

A further Dh1.9bn was generated from the country’s excise tax in the same period, a 47 per cent increase on the corresponding period in 2019, the ministry said in a statement on Tuesday.

“Tax revenues contribute to the continued implementation of development projects in accordance with the UAE government’s plans, and to mitigating the repercussions of the Covid-19 pandemic,” Saeed Rashid Al Yateem, assistant undersecretary of the ministry's resource and budget sector, said. Read more..

 

Saudi Arabia will not reconsider 15% VAT increase in short to medium-term: Minister

Saudi Arabia's finance minister said on Sunday that a decision to triple value-added tax to 15 per cent would not be reconsidered in the short to medium term, but might be looked into in the long term.

Speaking at a news conference closing the two-day G20 online summit, Mohammed Al Jadaan said the VAT decision had been "difficult" but a necessary option to support the economy.

Last week, acting information minister Majid bin Abdullah Al Qasabi said the Kingdom could review its VAT increase after the novel coronavirus pandemic ends. Read more..

 

UAE shoppers' dismay as UK to axe VAT rebate for tourists

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The UK’s plan to scrap tax-free shopping for tourists was met with dismay from UAE residents who have long taken advantage of the scheme.

Visitors to the UK from non-EU countries can claim a 20 per cent refund on purchases made there when they leave the country.

But there are plans to remove the VAT rebate when the UK leaves the EU on January 1, 2021.

Tourists from the UAE, who regularly visit the UK to take advantage of the tax-free offers, said they would simply shop elsewhere. Read more..

 

FTA conducts workshop on Tax treatment of E-commerce transactions

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. The FTA outlined that e-commerce generally refers to the supplies of goods and services that take place on digital platforms, where the supply of goods and services are obtained electronically, including via computers or mobile phones for purchase from websites or electronic applications.

This announcement was made during its second virtual workshop for accredited tax agents, on the tax treatment applied to the supplies of goods and services made through electronic means, such as the internet and similar electronic platforms. Read more..

 

UAE has no plan to hike VAT

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The UAE's Ministry of Finance on Tuesday 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.

The ministry said excise tax revenues increased 47 per cent year-on-year to Dh1.9 billion during January-August 2020 period. Read more..

 

UAE's VAT and how it applies to IPL players and their teams

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“... It should be noted that the purpose of the provisions of the VAT Directive - which determines the place where services are deemed to be supplied - is to avoid, first, conflicts of jurisdiction which may result in double taxation, and, secondly, non-taxation…”

The reaffirmation of the above global principle by the European Court of Justice (ECJ) couldn’t be more apt for the UAE’s VAT regime. The place-of-supply (POS) rules should not only avoid double taxation… but also double non-taxation. Read more..

 

FTA to issue tax residency certificates

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

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. Read more..

 

Income tax to be introduced in Oman: Ministry

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Oman expects to introduce an income tax on high earners in 2022, the finance ministry said in a 2020-2024 economic plan, new details of which were published late on Sunday, 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. Read more..

 

Getting tax submissions wrong now come with a much stiffer penalty in UAE

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Each voluntary disclosure made by UAE businesses on their taxes will now cost them dearly – a federal court ruling has set penalties of 300 per cent of the amounts disclosed.

“The judgement – delivered on October 14 - will result in exposing a number of companies to penalties,” said Mohamed El Baghdady, Senior Associate at Baker McKenzie Habib Al Mulla. “We are seeing some tax payers having an exposure of Dh1 billion and Dh500 million in administrative penalties.”

A deterrent to disclosures?

The Federal Supreme Court in its judgement had indicated that voluntary disclosures are an essential tool for tax payers to “evade potential criminal claims for tax evasion”. Read more..

 

Oman exempts key sectors from 5% VAT

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Oman has exempted some key sectors such as healthcare, education and finance from the value-added tax which will be levied over the next six months.

State-run Oman TV last week said that five per cent VAT will be imposed on goods and services, but with some exceptions.

In addition to financial services, provisions of healthcare and education and their related goods and services, other exemptions are undeveloped lands (bare lands); resale of residential properties; local passenger transport; and renting real estate for residential purposes, said Thomas Vanhee, Partner at Aurifer Middle East Tax Consultancy. Read more..

 

'VAT-free offers' misleading: FTA

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The UAE's Federal Tax Authority (FTA) has clarified that "VAT-free special offers" are misleading and contrary to legislation because goods and services are not actually supplied free of value-added tax (VAT).

Numerous retailers are offering "VAT-free special offers" as promotions to entice prospective buyers to purchase goods or services within a promotional period. But instead of "VAT-free special offers", tax experts say that such campaigns should be referred to as "VAT on us".

The authority said VAT-registered businesses should not advertise taxable goods or services as free of VAT or sell such goods or services without accounting for five per cent VAT, except where the supply qualifies for zero-rating. Read more..

 

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

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In a significant development, voluntary disclosures made by UAE based businesses on their actual VAT obligations will be charged with late payment penalties, reaching up to 300 per cent of the dues.

Not just that, the penalties will apply from the due date of the tax return – and not from the date of 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. Read more..

 

Saudi Arabia records 615 VAT offences in a week

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Saudi authorities have recorded 615 VAT violations during a sweep on retail stores across the Kingdom last week.

The offences were spotted over the last seven days during the campaign aimed at ensuring businesses’ compliance with regulations, the Saudi General Authority of Zakat and Tax (GAZT) said.

The Zakat and Tax Authority also worked on 339 complaints from people during the same period, GAZT added. Read more..

 

Oman to implement 5 per cent VAT

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Oman has issued a decree to start levying a 5 per cent value-added tax (VAT) in six months' time, state-run Oman TV said on Monday.

The tax will be on most goods and services, though with some exceptions, according to a video presentation shown on Oman TV.

All six Gulf Arab states agreed to introduce 5 per cent VAT in 2018. 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. Read more..

 

Covid hit to drag GCC countries' tax revenues 20% lower

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GCC countries could lose up to 20 per cent of tax revenues this year due to the impact of coronavirus and the resulting lockdowns on their economies. 

However, a decline in tax revenues in Saudi Arabia, the region's largest economy, could be offset with the tripling of value-added tax (VAT) that began on July 1. 

GCC countries levy a corporate tax in the range of 15 per cent to 85 per cent on oil and gas companies. The impact of plummeting oil prices in addition to the coronavirus crisis will also have a domino effect on corporate tax collections, says Nimish Goel, partner at WTS Dhruva Consultants. Read more..

 

Saudi Arabia exempts property deals from VAT and imposes new 5% tax

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Saudi Arabia on Friday issued an order exempting property deals from VAT and imposed a new 5 per cent tax on transactions.

The latest decision by the government is expected to boost the property sector in the kingdom and help citizens seeking to buy homes, according to a Saudi Press Agency report.

“The royal decree aims to support citizens and ease their burden … and enable them to own their homes,” Saudi Arabia’s finance minister Mohammed Al Jadaan said in a tweet. Read more..

 

Saudi Arabia uncovers 770 VAT violations as part of massive campaign

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Saudi authorities have recorded 770 VAT violations during a sweep on retail stores across the Kingdom. The violations were spotted over seven days during the campaign aimed at ensuring businesses’ compliance with regulations, the Saudi General Authority of Zakat and Tax (GAZT) said.

The violations ranged from failing to keep tax records and bills, tax evasion and charging a tax value more than the one approved. The agency had earlier urged business owners to abide by the new VAT level starting from July 1. Read more..

 

Higher educational institutions can claim VAT refund

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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. Read more..

 

Fighting coronavirus: Zero-rated VAT for face masks, sanitisers in UAE

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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 on Tuesday 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. In a video and photos posted on his social media handles, he can be seen interacting with the students and teachers while they were in their classrooms. Read more..

 

UAE FTA launches smart app to help consumers detect non-compliant tobacco products

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The Federal Tax Authority (FTA) has launched an innovative smart application that can be applied to check on the legality of trademarked tobacco products.

The smart application is designed to help consumers detect uncertified tobacco products by scanning the digital tax stamps placed on cigarette packages and tobacco products included in the 'Marking Tobacco and Tobacco Products Scheme', which went into effect at the beginning of 2019. The application also aims to ensure that these products meet the standard specifications, are not smuggled, and have been subjected to tax. Read more..

 

Saudi inflation jumps to 6.1% after VAT increase

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Saudi Arabia's consumer price index jumped 6.1 per cent in July compared with a year earlier, boosted by a tripling of value-added tax, official data showed on Sunday.

The annual inflation rate in June was 0.5 per cent, the smallest increase since January, before the VAT increase to 15 per cent from five per cent came into effect on July 1.

The jump in annual inflation reflected price increases in most categories, the General Authority for Statistics said. Food and transport were major contributors, rising by 14.6 per cent and 7.3 per cent, respectively. Read more..

 

FTA clarifies VAT application for e-commerce

The UAE's Federal Tax Authority (FTA) on Wednesday further clarified that though five per cent value-added tax (VAT) will be applicable to general e-commerce purchases however there are a number of special rules that apply specifically to e-commerce transactions.

It said the tax will also be applicable on digital services including supply of domain names, web hosting and remote maintenance programmes and equipment, software, images, text and information provided electronically such as pictures, screen savers, electronic books, documents and other digitised files such as music, movies and games on demand and online magazines. Read more..

 

VAT in the UAE: The process, calculations and exemptions explained

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Value Added Tax (VAT) was introduced in the UAE from January 1, 2018. If you are new to the UAE and unaware about the type of tax it is, how you would get affected by it and whether you can receive a refund on VAT, read on to find out all you need to know.

What is VAT?

VAT is a tax on the transactions of goods and services, applied at each stage of the supply chain and is based on the value added at each stage. Read more..

 

FTA continues to accomplish achievements, reflecting strength of national economy: Hamdan bin Rashid

The Federal Tax Authority (FTA) board of directors, chaired by Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of the FTA Board, held its first meeting since the UAE Cabinet of Ministers approved the decision to reconstitute the FTA's Board.

During the virtual meeting, Obaid Humaid Al Tayer, Minister of State for Financial Affairs, was elected as Vice Chairman of the FTA's Board of Directors. The board reviewed a comprehensive report on the progress of ongoing development project and the FTA's recent achievements.

Sheikh Hamdan bin Rashid confirmed that the achievements reviewed by the board demonstrated that the FTA continuously attain positive results, 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. Read more..

 

Not the right time to raise, introduce new taxes in GCC: IMF

It is not the right time to increase taxes on consumption and introduce tax on sectors that will drive the recovery of GCC economies in the post-coronavirus era, a senior official of the International Monetary Fund (IMF) said.

Jihad Azour, the fund's chief economist for the Mena, said the tax system in the region can be improved by being more progressive and building some additional solidarity because income disparity in the region is still getting high. He also called to make the tax system more efficient. Read more..

 

How Saudi Arabia is dealing with the new VAT hike

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Saudis and residents alike have to confront the challenges to their pocketbooks ever since the VAT rate went from 5 per cent to 15 per cent on July 1 of this year. This was part of some drastic measures announced by the country’s finance minister who had previously foretold of some painful measures.

The toll from the extended spell coronavirus pandemic and the dramatic slump in global oil prices has had a severe impact on the kingdom’s financial outlook.

In early May, the minister was discussing the fallout from the effect of COVID-19 on the economy and warned all residents that the kingdom would have to take some actions that would be “painful, but for everyone’s benefit”. Read more..

 

Saudi Arabian government to bear VAT on some of the services

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Saudi Arabia's government will bear value-added tax (VAT) on three services and products on behalf of the citizens, the General Authority for Zakat and Income (GAZT) said on Saturday, according to Saudi Media.

The three services include private education, buying first house by the citizen provided its cost does not exceed SR850,000, and healthcare in private health centers, the GAZT said.

The Kingdom increased VAT on services and goods on July 1 from 5 to 15 percent to offset the impact on economy because of the coronavirus pandemic. Read more..

 

Saudi Arabia: 355 violations recorded ahead of VAT tax hike

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Saudi authorities have recorded 355 tax violations during a large-scale campaign on retail stores in the run-up to the application of an added-value tax (VAT) increase due to takes effect as of Wednesday.

The violations were spotted over three days during the kingdom-wide campaign aimed at ensuring businesses’ compliance with the VAT regulations, the Saudi General Authority of Zakat and Tax (GAZT) said.

The violations ranged between failing to keep tax records and bills, tax evasion and charging a tax value than the approved one, it added. Read more..

 

Saudi Arabia: 15% VAT hike comes into effect

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Saudi Arabia’s decision to raise the value-added tax (VAT) rate to 15 per cent was enforced on Wednesday on all goods and services subject to it in markets across the Kingdom, after a royal decree was issued on May 11, Saudi media reported Wednesday.

The Saudi General Authority of Zakat and Income called on all taxpayers who are registered in the value-added tax to verify the readiness of their facilities, and learn about all transitional provisions related to raising the tax rate, by reviewing the guidelines for transitional provisions related to raising the value-added tax rate.

The authority also urged citizens and residents to ascertain the items of the tax invoice, including store name, date of purchase, tax number, and value-added tax, calling for cooperation with and reporting any violation business if these elements are not available, through the website of the authority (gazt.gov.sa), and via the (VAT) application for smartphones. Read more..

 

UAE businesses need to soon be in sync with 'Economic Substance Regulations'

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The Economic Substance Regulations (ESR) issued by the UAE curbs harmful tax practices and closely tracks the global standard set by the OECD (Organisation for Economic Co-operation and Development).

In 2017, the European Union’s Code of Conduct Group (COCG) evaluated the tax policies of “no or only-nominal tax jurisdictions” against the benchmark of economic substance. It stated that a jurisdiction should not create offshore structures or arrangements aimed at attracting profits that do not reflect “real” economic activity. Hence “noncooperative jurisdictions for tax purposes” was issued under which a number of no or only-nominal tax jurisdictions were “grey-listed”. (This meant they had to meet the expected standards within 12 months to avoid being blacklisted.) Read more..

 

UAE effectively addressed challenges posed by Covid-19

The UAE has no plans to increase value-added tax in the wake of the coronavirus pandemic that has tipped the global economy into a recession, the finance ministry said.

The government announcement came after Saudi Arabia, the largest economy in the Arab world and biggest oil exporter, said it would triple VAT to 15 per cent in July to shore up its finances amid lower oil prices and the Covid-19 crisis.

"The Ministry of Finance denies that there are currently any plans to raise value-added tax in the UAE, which is currently 5 per cent, and confirms its commitment to achieve the county’s development goals and plans," it said on Twitter on Monday. Read more..

 

Saudi Arabia: Tax authority begins inspections of shops in retail sector

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Saudi Arabia's General Authority for Zakat and Tax (GAZT) has implemented an extensive inspection campaign for shops in the retail sector, the Saudi Press Agency reported.

The campaign aims to ensure the commitment of shop owners to the value-added tax (VAT) system and the implementation of its regulations.

In cooperation with the Ministry of Commerce, GAZT has implemented 1,335 inspection visits, with the participation of all the authorities’ branches in different regions since the announcement of increasing VAT to 15 per cent from 5 per cent on May 11. Read more..

 

UAE delays ban on water pipe tobacco, e-cigarettes without digital tax stamps to 2021

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The Federal Tax Authority, FTA, has issued a decision to postpone the implementation of the ban on supplying, transferring, storing, and possession of water pipe tobacco - known in Arabic as 'mu'assel' - and electrically heated cigarettes in the UAE that do not carry digital tax stamps until January 1, 2021.

The ban had previously been scheduled to come into effect on June 1, 2020, in keeping with the timeline set for launching phase two of the 'Marking Tobacco and Tobacco Products Scheme', the authority said in a statement on Tuesday.

The scheme seeks to protect consumers from commercial fraud and low-quality products, limit negative impact on public health, and enhance control systems set up to combat tax evasion. Read more..

 

Coronavirus impact: VAT increased to 15% in Saudi Arabia, cost of living allowance suspended

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Saudi Arabia's government is suspending the cost of living allowance and raising the value added tax (VAT) threefold, as part of measures aimed to shore up state finances, which have been battered by low oil prices and the coronavirus.

"Cost of living allowance will be suspended as of June first, and VAT will be increased to 15 per cent from 5 per cent as of July first," the state news agency reported on Monday.  Read more..

 

UAE will not increase VAT amid pandemic crisis

The UAE has no plans to increase value-added tax in the wake of the coronavirus pandemic that has tipped the global economy into a recession, the finance ministry said.

The government announcement came after Saudi Arabia, the largest economy in the Arab world and biggest oil exporter, said it would triple VAT to 15 per cent in July to shore up its finances amid lower oil prices and the Covid-19 crisis.

"The Ministry of Finance denies that there are currently any plans to raise value-added tax in the UAE, which is currently 5 per cent, and confirms its commitment to achieve the county’s development goals and plans," it said on Twitter on Monday. Read more..

 

FTA issues directive on alternative deadline to file tax returns

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The Federal Tax Authority (FTA) has issued a directive on an exceptional basis providing an alternative date of May 28, 2020 for the deadline of submitting VAT returns and the payment of due tax for the tax period ended March 31, 2020, enabling taxable persons to meet their tax obligations without facing any difficulties.

This comes in light of its commitment to supporting VAT registrants and the unprecedented intensive precautionary measures undertaken by the UAE to curb the spread of the novel Coronavirus (COVID-19) imposing 24-hour restrictions on the movement of individuals and vehicles implemented in certain areas of the UAE, which coincided with deadlines for filing VAT Returns. Read more..

 

Gulf governments should have a rethink on VAT

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Since the outbreak of the coronavirus, Gulf countries have taken a series of urgent measures to support the business sector, companies and individuals, to help them cope with the economic fallout. For businesses, these nations created stimulus packages in the tens of billions of dollars, cancelled several government service fees, and provided discounts on utility bills.

However, there are still some financial instruments that can contribute effectively to reducing risks posed to businesses and individuals. For example, the Value Added Tax (VAT) is of great importance in boosting economic activity and giving it momentum in difficult times. This calls for a reform of the VAT system and reconsidering it on a temporary basis. Read more..

 

UAE rules out any VAT increase

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The UAE ruled out any increase the value added tax (VAT) to be accordance with recent IMF recommendations.

“We are not concerned about the recommendations to increase the value-added tax,” the UAE’s Minister of State for Financial Affairs, Obaid Al Tayer, told Gulf News.

The International Monetary Fund had recommended a doubling of the VAT.

According to economists, before adopting any new IMF recommendation to increase the value-added tax, it is necessary to evaluate the pros and cons of the past two years since VAT was implemented and develop solutions that can make the scheme more effective to economy and society alike. Read more..

 

Dubai Mall says first to launch kiosks for VAT refunds

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The Dubai Mall, in partnership with international payments service provider Planet, has launched a pre-validation VAT refund pilot service called City Validation.

The first mall in the UAE to launch the service, visitors to The Dubai Mall can now benefit from a hassle-free option to claim their VAT refunds, as they enjoy last-minute shopping at the mall.

Seven self-service kiosks have been deployed across The Dubai Mall for shoppers to claim their shopping refund before exiting the UAE. Read more..

 

Too early to evaluate impact of VAT on economy, says UAE minister

A senior UAE minister has said it is too early to determine the full impact of VAT on the country’s economy. Obaid Al Tayer, Minister of State for Financial Affairs, said more time was needed to properly assess the new levy, introduced in 2018.

Addressing an FNC session on Tuesday, he said business confidence in the Emirates was high. He also pointed to investments in the UAE being on the rise and that 300,000 companies had already registered to pay the tax.

“All commercial entities whose [sales] exceed Dh375,000 are obliged to register for VAT,” he said. Read more..

 

UAE to ban waterpipe tobacco, e-cigarettes without digital tax stamp from March

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Importing any type of waterpipe tobacco (known in Arabic as 'Mu'assel') or electrically heated cigarette plugs that are not marked with 'Digital Tax Stamps' will be prohibited across the UAE as of March 1, 2020, asserted the Federal Tax Authority (FTA) on Tuesday.

The ban is in keeping with the timeline set for launching phase two of the 'Marking Tobacco and Tobacco Products Scheme', the FTA explained, adding that it serves to protect consumers from commercial fraud and low-quality products.

The Authority called on producers, importers, and distributors of these products to abide by the system, as directed in Cabinet Decision No. 42 of 2018 on Marking Tobacco and Tobacco Products. Read more..

 

UAE expands VAT refund kiosks to major malls, hotels

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The UAE's VAT Recovery Self-Service Kiosks for Tourists scheme has been expanded to major shopping malls and hotels, it has been announced.
The new locations are in addition to air, land, and maritime entry and exit ports across the UAE, said the Federal Tax Authority (FTA).

The expansion aims to provide additional services to tourists, enhancing the UAE’s status as a leading destination, it said in a statement.
Planet, the company authorised by the FTA to operate the electronic system, said it debuted nine self-service kiosks in stage one of its expansion plan.
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VAT exemptions for schools in UAE: FTA releases circular

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The Federal Tax Authority, FTA, launched the "Basic Tax Information Bulletin" as part of its campaign for 2020, as it seeks to continue raising awareness about taxes and providing taxpayers with periodic and detailed tax information.

In its first edition, the bulletin focuses on tax treatment for the education sector, including schools, pre-schools, and nurseries.

 

Zero-rated, standard-rated and exemptions

Available via the FTA's website, as of today, the document explains that the supply of educational services, including printed or digital reading material related to the recognised curriculum, among others, is zero-rated, where both the curriculum and the educational institution are recognised by the competent federal or local government. Read more..

 

FTA makes it easier for Emiratis to recover VAT on homes

The Federal Tax Authority, FTA, announced on Tuesday that it has launched a new platform on its website to streamline the process of recovering Value Added Tax, VAT, incurred by UAE citizens on the building of new homes.

Citizens who qualify for VAT recovery on newly-built homes will receive an email with a request to submit the necessary documents to complete the processing. After verification of the documents, the citizen is notified of his/her entitlement. If the refund amount matches the tax invoices provided, then — following final approval the refund amount is transferred to the applicant’s bank account. Read more..

 

Oman expected to implement VAT in 2021: Minister

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Oman will impose five per cent value-added tax (VAT) from early next year, said an Omani minister on Tuesday.

"VAT is something people don't like it but this is something we have been lobbying for. It will come into effect sometime in the beginning of the next year," said Ali bin Masoud Al Sunaidy, Minister of Commerce and Industry in Oman.

Currently, three GCC countries, UAE, Saudi Arabia and Bahrain, have levied VAT as agreed by the six member countries. Oman will most likely be the next GCC country to join the league. Read more..

 

E-commerce to contribute significantly to VAT revenue

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E-commerce is expected to significantly bolster government revenues from value added tax (VAT) in the UAE, data on fast growing online sales indicate.

The UAE introduced VAT in 2018 as part of its fiscal strategy to diversify the government revenues. VAT, essentially a consumption tax is universally applicable for all purchased including online purchases with very few exceptions.

In the case of online purchases, according to the Federal Tax Authority (FTA) all purchases are subject to the same 5 per cent VAT as any other purchase made through traditional outlets if the products purchased online are received within the UAE. Read more..

 

Tourists' electronic VAT refund applications more than double in second half of 2019

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The number of applications for electronic value added tax refund from tourists more than doubled in the second half of 2019, as the volume of refund claims continue to rise steadily since the Federal Tax Authority rolled out the service in November 2018.

The total number increased to 3.2 million application by the end of 2019, compared to about 1.52 million received at the end of June, according to FTA data released on Saturday.

The number of retail outlets across the UAE connected electronically to the FTA's system has also risen to 12,310. The number of self-service kiosks to recover VAT by tourists, before they make an exit from the country has also risen from 29 in July to 52 kiosks currently. Read more..

 

VAT and excise issues dominate Dubai tax dispute cases in 2019

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Thirty-eight cases were heard by Dubai’s tax dispute resolution committee last year, with the majority focusing on value-added tax (VAT) and excise duties, according to a lawyer familiar with the cases.

Tax dispute resolution committees were established in Abu Dhabi, Dubai and Sharjah in 2017 and although submission started in 2018 the first hearings were not held until early 2019.

The Dubai committee began operations in March 2019 and, over the course of the year, 38 cases were heard. Read more..

 

Federal Tax Authority records rise in tax registered business

The Federal Tax Authority has revealed that the number of tax registered businesses has increased thanks to the growing awareness among business sectors, and the ease and flexibility of electronic tax procedures available through the Authority’s official website, which was developed during the year 2019.

Khalid Ali Al Bustani, Director General of the Federal Tax Authority (FTA), stressed that 2020 will witness further development to the online services, as part its efforts to manage, collect, and implement taxes. Read more..

 

This VAT message is fake, ignore it, warns UAE

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The Federal Tax Authority has warned people against responding to e-mails or text messages that request personal financial or banking information and which claim that VAT will be refunded to those who reply. The authority stressed that these are fraudulent messages and that it never asks people to disclose their personal data via e-mail, text, or over the phone.

The FTA clarified that tax refund operations for legally eligible categories are conducted directly between the authority and the taxpayer, with the authority contacting registrants directly without using any third party mediators. It stressed that it does not authorize any banking, financial or accounting entities to acquire data or collect taxes on its behalf.
 Read more..

 

Bahrain gov't extends third deadline for VAT registration

altBahrain has extended the deadline for value-added tax (VAT) registration by a week to December 26 to give companies that are yet to register some more time to comply with the law.

The new VAT registration deadline will cover businesses whose annual supply value exceeded BD37,500 in the previous 12 months or will exceed BHD37,500 in the next 12 months.

It is the third stage of VAT registration in Bahrain. The first stage covered large businesses whose annual supply value exceeding BD5 million with a deadline of December 20. For the second phase, businesses with an annual supply value exceeding BD500,000 were instructed to register before June 20. Read more..

 

Now, VAT for UAE ads on Facebook

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Social media giant Facebook has announced all advertisements on its platform in the UAE will now be subject to a value added tax (VAT).

This means any individual or entity looking to advertise on Facebook will have to factor in an additional five per cent VAT on its services.

The move by Facebook follows the larger implementation of VAT in the UAE since January 1 2019. Read more..

 

VAT contributed 5.5% to UAE's revenue in 2018

altUAE’s tax revenue, including value-added tax (VAT) made up 5.5 per cent of the total public revenue in 2018, according to the Ministry of Finance (MoF), official news agency WAM reported.

UAE’s total overall revenues reached Dhs456bn in 2018, of which tax revenues made up Dhs25bn, a statement said.

The country’s oil revenues, and profits of public joint-stock companies constituted 36.1 per cent and 32.9 per cent respectively, the statement said.

The UAE’s decision to introduce VAT benefited the country, as it recorded a budget surplus of 2.2 per cent in 2018, compared to deficits of 0.2 per cent, 1.3 per cent and 6.4 per cent in 2017, 2016 and 2015, respectively. Read more..

 

Excise tax rates in the UAE: What you need to know about sugary drinks, cigarettes and other products

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The UAE Ministry of Finance announced in October that each individual cigarette will cost buyers at least 40 fils extra, or Dh8 per pack (of 20 cigarettes), starting December 1, in order to ensure that every cigarette pack in the UAE was taxed properly. 

Today a minimum tax of Dh0.40 per cigarette is applicable to all brands now, especially as some more affordable brands, managed to remain untaxed for the past two years. Read more..

 

Most UAE residents support the country's new tax on sugary drinks - survey

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Most of the UAE’s residents back the government’s decision to levy a new tax on sugary drinks, a new survey has found.

The survey by YouGov, which polled 1,002 adult respondents across the UAE, revealed that 55 per cent support the implementation of the new tax while only one in five (20 per cent) oppose it. Of those who support the initiative, 77 per cent also agree with the notion of enforcing a complete ban on the sale of high sugar drinks across the country. Read more..

 

FTA processes more VAT refunds

The Federal Tax Authority (FTA) on Wednesday approved procedure for refunding value added tax (VAT) on building new homes for UAE citizen.

The FTA board of directors at 10th meeting also reviewed the authority's budget for 2020, reaffirming its commitment to enabling taxable persons to self-comply with tax obligations.

Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, who is also Chairman of FTA, chaired the meeting where he was presented a report on the FTA's recent activities and accomplishments. Read more..

 

Dubai F&B operators call for review of adult beverage tax

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A number of food and beverage operators in Dubai are calling for a review of taxation on adult beverages served in bars and restaurants, saying that they negatively impact the local market and its future potential. 

At the moment, there is a 30 percent tax on adult beverages in Dubai sold at off-licence outlets.

In a joint statement, a number of hospitality figures said that the tax “makes prices higher then they need to be”, which in turn impacts the local market and tourism. Read more..

 

UAE has 'no income tax plans' says senior government official

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The UAE has no plans to introduce income tax and will not hike VAT in the next three years, a senior government official said.

Younis Al Khouri, undersecretary at the Ministry of Finance, spoke after a local newspaper article sparked a flurry of debate among some social media users.

The Emirates and Saudi Arabia introduced 5 per cent VAT on many goods in January 2018 to boost non-oil revenue. The UAE will not look at hiking tax until 2023, five years after it was introduced, he said. Read more..

 

Most common mistakes made by SMEs on VAT filings in UAE

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It has been almost two years since the UAE levied 5 per cent value-added tax on goods and services. Since the taxation system has been introduced for the first time in the country, a number of smaller companies have been prone to making mistakes in filing their tax returns, thus attracting fines.

Tax experts say poor planning, hiring of the wrong resources, failure to issue valid tax invoice, non-maintenance of records and mistakes in simply calculating and paying VAT but failing to file the appropriate amounts are some of the most common mistakes made by the small and medium companies in the UAE when filing tax returns. As a result, these mistakes can attract fines as high as Dh50,000. Read more..

 

Good news: No excise tax on these products in UAE

Curbing harmful consumption patterns and enhancing the standard of living are the leading objectives behind the Cabinet decision to expand the scope of excise tax, asserted Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, FTA, at a media workshop organised by the authority on Tuesday, October 29, 2019.

Al Bustani explained that the expansion of excise tax answers directives from the UAE's wise leadership to enhance the country's competitiveness and expedite plans to build a safe, healthy community, by curbing the consumption of harmful products, diversifying sources of income, and expanding the public services offered by the government. Read more...

 

Minimum price of pack of 20 cigarettes set at AED 8: UAE tax authority

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The Federal Tax Authority (FTA) has called on all businesses registered for Excise Tax to comply with the minimum price that has been fixed for tobacco products and update it in the authority's system, as determined in Cabinet Decision No. (55) of 2019 on the Excise Price for Tobacco Products.

The decision stipulates that excise price cannot be set under Dh0.4 (40 fils) for one cigarette. Meanwhile, the minimum price for waterpipe tobacco (known in Arabic as 'Mu'assel') was set at Dh0.1 (10 fils) per gram.
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Excise tax in UAE: Firms urged to count stocks by November 30

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Businesses in the UAE have been asked to count their stocks by November 30 in order to report and pay the correct excise price and tax on the goods, tax experts said on Friday.

"Basically, the process is companies need to close their inventory on November 30, 2019, count volume of products that they have subject to excess tax as shortly after they have to file tax return which details all of the volume of excise tax. And they would pay excise tax which is applicable on the stock count," said Thomas Vanhee, partner at Aurifer Middle East Tax Consultancy and an affiliate professor of tax law. Read more..

 

Dubai offers instant VAT refunds for Chinese tourists

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Chinese tourists to Dubai can now benefit from instant VAT refund capabilities at Dubai Airports via the We Tax Refund on the WeChat Mini Program, launched by Chinese tech giant, Tencent, and international payments service provider, Planet.

With the support of Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism), the new integrated service provides a seamless and secure way for visitors to instantly claim back their tax on purchases they have made while visiting the emirate, and further supports the Department’s ongoing ‘China Readiness’ strategy to grow and maintain the emirate’s share in a key source market while enhancing holistic experiences of its Chinese guests. Read more..

 

UAE excise tax on e-cigarettes, sugary drinks to start on December 1

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The excise tax on electronic smoking devices and sweetened beverages will be effective as of December 1, 2019, according to the Federal Tax Authority (FTA).

The authority called on producers and importers of the products to register for the excise tax system at the earliest to avoid late registration fines.

The UAE initially introduced 50-100 percent excise tax on harmful goods such as soft and energy drinks and tobacco in October 2017 in a bid to improve public health and cover the costs of public services through the newfound government revenue. Read more...

 

UAE's Federal Tax Authority issues warning over VAT scam

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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. Read more...

 

UAE Federal Tax Authority in Digital Tax Stamp inspections

The UAE Federal Tax Authority (FTA) has conducted two simultaneous awareness and inspection campaigns — to verify compliance with the Marking Tobacco and Tobacco Products Scheme.

The move has come during the first month since the ban on selling cigarettes not bearing the Digital Tax Stamps in local markets went into effect. The stamps, placed on cigarette packages, allow for tracking of the products from the manufacturing facility until they reach the end consumer. Read more...

 

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

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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. Read more...

 

VAT receipts will help Ras Al Khaimah to cut debt, says Fitch

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Fitch Ratings has affirmed the emirate of Ras Al Khaimah’s long-term issuer rating of A and assigned it a stable outlook, based on its low levels of government debt and high gross domestic product (GDP) per capita.

“The emirate derives substantial support from its membership of the UAE,” the ratings agency said in a report, citing the UAE's common monetary and exchange rate system and its "credible" dollar peg as significant advantages.

“Most public services and infrastructure are provided directly by the federal government, making RAK's spending more flexible than peers and relieving the emirate of some of the spending needs of a typical sovereign,” it added. Read more...

 

UAE to add sugary drinks, e-cigarettes to excise tax list in 2020

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The UAE Cabinet on Tuesday announced a decision to expand the list of excise taxable products to include sweetened beverages, sugary drinks and electronic smoking devices, starting from January 1, 2020.

The decision to add a tax of 50 percent is part of efforts to reduce consumption of unhealthy goods and modify consumers’ behaviour, state news agency WAM reported

A statement released by the Cabinet General Secretariat read: "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. Read more...

 

FTA launches new excise goods registration system

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The UAE’s Federal Tax Authority (FTA) has launched a new electronic system for registering excise goods.

In a statement on Saturday, the FTA said that the new system is designed to offer transparent guidelines and standards for the registration of goods, along with new reporting requirements related to excise tax returns and declarations.

The FTA is urging all businesses to follow the new process and ensure that the required documents are readily available when submitting a registration request. Read more...

 

New UAE tax rule on two products from November 1

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. Read more...

 

UAE Federal Tax Authority: Bank Interest and Dividends Outside the Scope of VAT

The Federal Tax Authority (FTA) asserted that passively earned interest income from bank deposits and dividend income are outside the scope of Value Added Tax (VAT), and there is no requirement to report them in the VAT return.

VAT is a tax imposed on the import and supply of goods and services at each stage of production and distribution, therefore, VAT implications arise only when there is a supply – if there is no supply, there is no VAT implication.

The FTA explained that the Federal Decree-Law No. (8) of 2017 on VAT and its Executive Regulations have included specific provisions on what would constitute a supply of goods and a supply of services and also included a definition for taxable supplies. Read more...

 

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

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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. Read more...

 

Daily VAT cash refund limit capped at Dh7,000, unlimited for cards

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Tourists visiting the UAE can claim only Dh7,000 per day as cash under the VAT refund scheme, but there is no maximum limit set for refunds effected through credit cards, the Federal Tax Authority (FTA) clarified on Sunday.

Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of the FTA, has issued a new order, setting this daily maximum limit for VAT cash refunds for tourists applying through the Tax Refunds for Tourists Scheme that came into effect from November 2018. Read more...

 

Federal Tax Authority launches new website

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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. Read more...

 

Dubai biggest beneficiary of VAT revenue

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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. Read more...

 

UAE's VAT revenues beat estimates, Moody's says

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Revenues from the UAE’s value added tax, which came into effect in January last year, exceeded government expectations in 2018, boosting state coffers and proving credit positive for the country, according to a Moody’s analysis.

“With non-oil sector growth still subdued, the strong VAT out-turn was largely attributable to higher than expected compliance with the new law,” the rating agency said in a report this week.

“The government’s 2018 and 2019 VAT revenue forecasts had included conservative assumptions regarding the level of compliance in the initial years of implementation.” Read more...

 

FTA approves 390 VAT refunds totalling Dh17.5 million

The Federal Tax Authority, FTA, has announced approving 390 VAT refund applications totalling Dh17.5 million, for Emiratis who paid it when building their homes.

Khalid Ali Al Bustani, Director General of FTA, stressed that the FTA’s move comes in implementation of the wise leadership vision, aiming to develop a modern housing system for Emiratis and provide the best standards of living. Read more...

 

Self-service VAT refund system for tourists launched across UAE

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Tourists now have an easy way to claim back VAT before departing the UAE thanks to the launch of self-service kiosks across the country.

Planet, the company tasked with overseeing tax refunds on goods purchased while visiting the country by the Federal Tax Authority, is turning to technology to make the process simpler.

Rather than visit an office to complete refund procedures, people can do it themselves by taking advantage of the new fully-automated service, which has been rolled out at airports and ports. Read more...

 

Will VAT rate go up in GCC?

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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. Read more...

 

Saudi Arabia's 'sin tax' on sugary drinks will come into force from December

Saudi Arabia will start levying the new excise tax on drinks containing added sugar before the end of this year, as the kingdom, the biggest Arab economy, continues to diversify its revenue streams.

The kingdom, Opec's top oil producer and the biggest crude exporter int he world, said in May it would impose a 100 per cent tax on electronic cigarettes and a 50 per cent levy on drinks with added sugar, broadening the excise duty on similar products as it looks to expand its revenue base and cut its reliance on oil income. The latest statement from Gazt did not confirm if the tax would also be implemented on e-cigarettes from the same date. Read more...

 

Abu Dhabi's Adnec secures VAT waiver for UAE exhibitors

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Abu Dhabi National Exhibitions Company (Adnec) has announced that it has obtained FTA licence for waiver from VAT for all international companies and organisations participating in or holding shows and conferences at its venues across the UAE.

The VAT waiver covers exhibitions and conferences held over a period not exceeding seven days, Adnec said in a statement.

It added that the waiver also stipulates that recipients shall not have a permanent base or established business in UAE and shall not be registered or obliged to register in UAE as per the UAE VAT Law. Read more...

 

Oman to impose 100% tax on tobacco, alcohol starting next week

Oman will introduce 100% tax on tobacco, alcohol and pork meat from June 15, as the sultanate follows other Gulf governments in trying to pare its reliance on oil revenue.

Energy drinks will also be subject to a 100% levy and there will be a 50% tax on carbonated drinks, according to the Secretariat General for Taxation website.

The new taxes could generate about 100 million Omani rial ($260 million) annually, Saleh bin Said Masan, head of the economic and financial committee at the Shura Council, said in November. Read more...

 

UAE says processing over 8,000 VAT refunds per day

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

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

 

FTA applies penalties for digital tax evasion on cigarettes

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

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

 

UAE marks 500 successful days of value-added tax

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

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

 

Saudi Arabia to impose excise tax on e-cigarettes and sugary drinks

Saudi Arabia will impose a 100 per cent tax on electronic cigarettes and a 50 per cent levy on some sugary drinks, broadening the excise duty on similar products enforced in June 2017.

The Arab world's largest economy already has a 100 per cent excise duty on cigarettes and tobacco products, and a 50 per cent on energy drinks. Read more...

 

IMF urges Saudi Arabia to mull VAT rate increase 

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

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

 

Emirates NBD sees UAE rate climb reversing on tax giveaway

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An “unsustainable” increase in the United Arab Emirates’ lending benchmark will reverse once the government doles out the tax revenue whose withdrawal from deposits spurred the rise, according to the biggest bank in Dubai.

The three-month Eibor has climbed in the past three weeks despite a decline in a similar dollar rate, an oddity because the dirham is pegged to the US currency. Read more...

 

Who can claim a VAT refund as business visitors?

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Federal Tax Authority (FTA) has laid down clear procedures on who can claim VAT refund under business visitors’ category.

Tax consultants said these refunds will be a big relief to many business sectors such as exhibitions and conferences that will now be able to claim refund on their purchases here. Read more...

 

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

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

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

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

 

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

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

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

 

Business visitors to get VAT refund from April

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

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

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

 

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

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

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

 

VAT refunds for pavilions at Expo 2020 Dubai

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Countries and inter-government agencies will be able to claim value-added tax (VAT) refunds for the costs incurred for the developments of pavilions at Expo 2020 Dubai.

According to a Cabinet decision posted on the Federal Tax Authority's (FTA) website, the commercial space should be less than 20 per cent of the space to be entitled for the refund. The Expo 2020 Bureau will largely administer this process.  Read more...

 

UAE to ban sales of unmarked tobacco products from August 1

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The Federal Tax Authority (FTA) has announced that the selling or distribution of unmarked tobacco products will be prohibited across all local markets as of August 1.

The authority said that it has held a series of training workshops to introduce inspectors across the UAE's economic development departments to the Marking Tobacco and Tobacco Products Scheme, which went into effect in January.

The new scheme includes electronic monitoring of all kinds of imported, produced and locally traded cigarettes, from production to consumer, to ensure compliance with excise tax payments.  Read more...

 

Could blockchain transform the GCC's VAT system?

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

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

 

Why taxes on trucks should be reviewed

Individual emirates in the UAE have imposed toll taxes on trucks over the last few months and the federal government should look into as it could hamper the industry and investment into the country, an industry executive from the cement manufacturing industry urged.

"In the last couple of months, individual emirates have started toll charges for entry and exist of trucks. Emirates like Fujairah and Ras Al Khaimah have a toll of Dh300 for any truck moving out of the emirate. Similarly, Sharjah followed and started charging Dh420 for an entry of trucks in the emirate," said Pramod Rajgaria, chief executive officer of Star Cement. Read more...

 

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

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

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

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

 

IMF says VAT launch in Bahrain a 'significant step'

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

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

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

 

Food delivery? VAT compliance should be on the menu

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Getting food at your doorstep using technology could have never been imagined until the tech giants like Uber, Zomato and more recently Talabat and Careem have made it possible. Simply using fingers on customer friendly apps, one can now conveniently anytime during the day order food that will be delivered to your office or home.

Online food delivery apps typically work on the aggregator model where various restaurants are aggregated on the digital platform that allows customers to choose the restaurant and place the order.  Read more...

 

No VAT charges on bank interest or dividends

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Passively earned interest from bank deposits or dividend income cannot have VAT applied, the UAE Federal Tax Authority said on Tuesday.

The government body said the income was “outside the scope of VAT”, as it issued a public clarification on bank interest and dividends in a bid to educate taxpayers on all technical issues concerning taxes.

Khalid Al Bustani, the FTA’s director general said the Public Clarifications service, offered through the authority’s official website, “helps raise tax awareness among businesses and consumers alike, promoting compliance in the process”. Read more...

 

Lower VAT threshold to increase taxpayer base by 150.000 in Saudi - KPMG

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The reduction of the value-added tax (VAT) registration threshold in Saudi Arabia to SAR375,000 ($99,960) is estimated to increase the taxpayer base by 150,000, according to KPMG Al Fozan and Partners.

The kingdom introduced the 5 per cent VAT rate on January 1, 2018 but it only applied to businesses with revenues exceeding SAR1m ($266,560) in its first year.

From January 1, 2019 those with revenues of between SAR375,000 and SAR1m have also been subject to the tax. Read more...

 

First year of VAT in the UAE: FTA reveals the key details of implementation

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A total of 296,000 businesses have registered for value added tax (VAT) in its first year of implementation in the UAE, the Federal Tax Authority (FTA) has revealed.

The UAE implemented 5 per cent VAT on the supply of most goods and services in the country on January 1, 2018. Read more...

 

FTA set to mark tobacco products in UAE from January 1

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The Federal Tax Authority (FTA) has announced the completion of all preparations required to implement its 'Marking Tobacco and Tobacco Products' scheme.

Entering into effect on Tuesday, January 1, 2019, the scheme involves the electronic monitoring of all types of imported, produced and locally-traded cigarettes, from production to consumer, to ensure full compliance with payment of excise tax. It will be gradually extended to cover all tobacco products.
 Read more...

 

Taxpayers in UAE and Saudi Arabia: get ready for official tax audits in 2019

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Taxpayers in the UAE and Saudi Arabia will have to brace themselves for official audits next year as the roll-out of the 5 per cent VAT since January 1 this year overcomes a number of hurdles and teething problems.

Now that regulations are in place, taxpayers are expected to prepare for audits by the UAE’s Federal Tax Authority and Saudi Arabia’s General Authority of Zakat and Tax next year. It is an exercise that will test their resources and the accuracy of record keeping as well as the filing of tax returns. Read more...

 

Bahrain oil products to be VAT-exempt

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Bahrain will exclude oil products from a value-added tax (VAT) due to be implemented next year, part of an essential goods exclusion from the tax, Oil Minister Sheikh Mohammed bin Khalifa Al-Khalifa said on Tuesday in remarks carried by the state news agency.

Bahrain's upper house gave final approval to a draft law of the tax in October.
 Read more...

 

UAE tourists praise tax refund scheme

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The inspection tours conducted by the Federal Tax Authority (FTA) have revealed that customer satisfaction with the Tax Refunds for Tourists Scheme's electronic system is on the rise.

The authority had launched the scheme in two consecutive phases beginning on November 18, 2018, in collaboration with global systems operator Planet, covering, so far, 12 ports of entry to the UAE, comprising six airports, two sea ports, and four land ports. Read more...

 

Three down, three to go in the GCC as Bahrain set to roll out VAT

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Following the decision of the UAE and Saudi Arabia to introduce VAT, Bahrain will bring the tax in on January 1 next year, leaving Oman, Kuwait and Qatar still to do so.

At the time of writing, Bahrain's primary legislation has been in circulation for a few months (in Arabic). However, the more detailed regulations remain unseen, making it difficult for businesses that need to prepare to do so. Read more...

 

UAE says $250k tourist tax refunds processed every day

The UAE is seeing an average of 3,800 transactions per day under its recently launched Tax Refunds for Tourists Scheme, it has been announced.

The Federal Tax Authority said the average total amount of refunds processed every day has so far totalled AED925,187 ($251,868). Read more...

 

Tourists claiming UAE VAT refund may be subject to secondary checks, says operator

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Tourist visitors will be able to claim tax refunds on their purchases within minutes as part of a new digital system for the Tax Refunds for Tourists Scheme – but may be subject to secondary checks as they exit the country, the company hired to operate the digital system for the UAE’s Tax Refunds for Tourists Scheme has said. Read more...

 

UAE businesses told to keep tax data confidential

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The Federal Tax Authority (FTA) has called on businesses registered for tax purposes not to disclose their financial or tax data to any person or organisation that is not officially authorised to deal with such data.

The authority stressed in a statement issued on Saturday that it is necessary to remain vigilant about messages received via e-mail or mobile phone and not to share tax registration numbers (TRN) or financial account numbers with any entity.
 Read more...

 

New biannual tax return commences next month in UAE

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The Federal Tax Authority (FTA) will introduce a new biannual tax period next month for certain sectors, said Khalid Ali Al Bustani, director-general, FTA.

"Next November, a new biannual tax period will be introduced for some small businesses, commercial real estate owners, and board members, and they will be informed of the procedures for their new tax periods," said Al Bustani. Read more...

 

UAE records strongest excise tax compliance

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The Federal Tax Authority (FTA) on Saturday said the UAE registered one of the highest compliance rates of 97.7 per cent for tax returns requirements of excise tax.

Revealing figures at the completion of one-year of imposition of excise tax, the FTA said 715 companies had registered for the tax returns. Read more...

 

VAT refund process simplified for Emiratis

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Khalid Ali Al Bustani, director-general of the Federal Tax Authority (FTA), has announced that procedures to reclaim value-added tax (VAT) for UAE nationals who are building new residences have been simplified with electronic procedures. Read more...

 

 

Bahrain's parliament approves draft VAT law

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Bahraini legislators approved a draft law on Sunday that would see value-added tax (VAT) imposed for the first time in the kingdom, state news agency BNA reported.

The House of Representatives approved a Gulf Arab agreement to introduce VAT after a royal decree ordered parliament to hold an extraordinary session on Sunday, BNA reported, without giving details of the vote. Read more...

 

The UAE Explained: Can tourists claim their tax back?

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It is nine months since the UAE introduced VAT, and the good news for tourists is that they will soon be able to claim it back. But how?

Here is a guide to everything you need to know about the VAT process for non-residents:

- When will tourists be able to claim back VAT on their purchases?

An “advanced integrated digital system” to refund VAT to non-residents is under process and will be operational from November 18.

- Will all tourists in the UAE be able to claim their VAT back?

The only exceptions will be residents of other Gulf Cooperation Council countries: Saudi Arabia, Kuwait, Bahrain, Oman and Qatar. Read more...

 

VAT diversifies UAE government revenues with minimum rise in prices

Introduction of value added tax in the UAE has diversified the government revenues enhancing the country's institutional capacity to respond to the oil price shock while limiting inflationary impact to the minimum, said credit rating agency Moody's.

Of the six Gulf Cooperation Council (GCC) states, only Saudi Arabia has introduced the tax on schedule along with the UAE. While the VAT is at a uniform rate of 5 per cent, the level of tax compliance will be clear only when the revenue receipts are announced. Reports suggest that around 260,000-275,000 of an estimated 350,000 companies have registered for VAT so far. Read more...

 

After gold, this sector may get VAT exemption

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Following UAE's decision to exempt gold and precious metals from the value-added tax, the maritime industry could also get a relief as the Federal Transport Authority is negotiating VAT exemption with the Federal Tax Authority, confirmed a senior official on Monday.

Hessa Al Malek, executive director of maritime transport at UAE's Federal Transport Authority, said the meeting with the Federal Tax Authority will be held soon to discuss the issue. Read more...

 

Tourists in UAE won't get retrospective VAT refund

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Tourists in the UAE are unlikely to get VAT refunds for purchases made before the refund scheme comes into effect from November 2018, according to UAE-based tax experts.

They say that as per Article (68) of Cabinet Decision (52) on Executive Regulations, the Cabinet may issue a decision on introducing tax refunds for tourists, specifying the date from which the scheme comes into effect. Read more...

 

Tax Planning vs. Tax Evasion

Tax planning is the restructuring of activities in a way to maximise the tax benefits by making best possible use of all the legal options like setting up a new company in free zones, focussing on local purchases, and so on. 

On the contrary, tax evasion is a technique of refraining from tax liability with the intention of defeating the fundamental motive of the legislature. Read more...

 

VAT will attract more global investors to UAE realty

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When value-added tax (VAT) was introduced in the UAE and Saudi Arabia on January 1, 2018, initially stakeholders were wary on the potential impact of the new tax policy on the economy. 

A study conducted by Alliance Business Centers Network said that the UAE would be least affected by the imposition of VAT because it is one of the lowest globally compared to countries such as the UK, Switzerland, Germany, Mexico, South Africa and Australia. The study revealed that the VAT in UK and France was 20 per cent, which is substantially higher than the five per cent implemented in the UAE and Saudi Arabia. Read more...

 

Nearly fifth of Saudi retailers not complying with VAT, GAZT inspection finds

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A Saudi inspection campaign has led to the discovery of 323 value-added tax (VAT) violations by the General Authority for Zakat and Tax (GAZT) in the retail industry, according to local media reports.

According to Arab News, the campaign was designed to ensure that mobile phones, electronic centres and shops in the kingdom comply with the VAT system, and targeted 1,876 locations across the country. Read more...

 

Don't let UAE cashiers round up numbers for you

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Do not accept "rounding up". If the cashier cannot give you exact change, or close to it, make them "round down". It is your money. Moreover, all the other wheat stalks in the line behind you will thank you for it, and they will demand the same.

Always ask for a VAT invoice, which shows a Tax Registration Number (TRN) whenever you are being charged VAT. Chances are, the seller may not be registered. Which, by the way, is punishable by fine and imprisoment. Read more...

 

VAT in Saudi

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When Value Added Tax (VAT) was introduced in the UAE and Saudi Arabia on January 1, 2018, initially stakeholders were wary on the potential impact of the new tax policy on the economy. While a study by Alliance Business Centers Network revealed that the UAE will be least affected by the imposition of VAT, the introduction of VAT in Saudi Arabia is changing the market dynamics and bringing more transparency to the sector. Read more...

 

Are free zones in a bind?

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Following the UAE government's decision to authorise 100 per cent foreign ownership in the mainland, free zones in the UAE will have to come up with novel ideas, reasons and incentives to convince existing firms to continue their operations in the free zones as well as attract more firms, officials and analysts said. Read more...

 

Investors with commercial realty need to clear VAT dues

Investors must clear their VAT dues on the sale or rental of commercial properties before proceeding with any transfer of ownership. Read more...

 

UAE banks now able to charge VAT on fees

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Banks have started charging VAT on various services offered, following a June circular from the Central Bank of UAE, which rescinded a previous notice to the contrary. Read more...

 

 

FTA enhances e-Services for custom clearance firms

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The Federal Tax Authority (FTA) has announced enhanced features of its e-Services to facilitate customs clearance companies with easier registration procedures and submission of tax returns. Read more...

 

 

UAE signs Agreement for the Avoidance of Double Taxation and Prevention of Tax Evasion with Saudi Arabia

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The UAE, represented by the Ministry of Finance (MoF), signed an agreement for the Avoidance of Double Taxation and Prevention of Tax Evasion with respect to taxes on income and capital, with Saudi Arabia yesterday. Read more...

 

 

UAE's VAT taxpayers can appoint agents via government website

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UAE taxpayers can now connect directly with accredited tax agents – including accountants, lawyers or consultants – via a

 

 

UAE Exchange now authorised to accept VAT payments

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Money transfer company UAE Exchange has announced that it has now been authorised to start accepting value added tax (VAT) payments on behalf of the Federal Tax Authority (FTA) in the country. Read more...

 

 

All you need to know about VAT on gold and diamonds in UAE

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The Federal Tax Authority (FTA) on Wednesday clarified that the new Cabinet decision issued about VAT reverse charge mechanism for the gold and diamond industry will only pertain to commercial transactions between registered dealers. Read more...

 

 

Removing jewellery from the VAT regime may change the UAE's tax future

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The UAE Cabinet made a seemingly minor change earlier this month in how VAT applies to jewellery sales. It is significant for the way in which the VAT system will hold together in the GCC. It may even define the future of VAT in the UAE and the GCC for the next decade. Read more...

 

Kuwait to delay VAT implementation until 2021

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Kuwait is set to delay its implementation of a regional 5 per cent value added tax until 2021, according to parliamentary committee statement. Read more...

 

 

New system launched to detect tax dodgers

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The Federal Tax Authority (FTA) has announced launching a new electronic tracking system which uses digital tax stamps to ensure excise tax on tobacco products has been paid. Read more...

 

 

Up to 75,000 UAE firms facing fines for failing to register for VAT

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Almost 75,000 UAE companies are facing potential fines and other punishments from the government having still not registered for a new value added tax (VAT).The 5 per cent tax rate came into force on January 1 and applies to most goods and services. Read more...

 

 

Beware: FTA to get tough on VAT evaders in UAE

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The Federal Tax Authority will get tough on companies, which are obliged to register for value-added tax (VAT) but have not done so from next month, said a senior official. Read more...

 

 

UAE achieves '98.8 per cent VAT compliance': Federal Tax Authority

Nearly 100 per cent of companies in the UAE that were obliged to pay value added tax (VAT) have since registered to do so, according to Khalid Al Bustani, director general of the Federal Tax Authority (FTA). Read more...

 

Over half of UAE SMEs unprepared to file proper VAT returns

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Small and medium enterprises (SMEs) are still facing a lot of challenges as the first deadline for value added tax filing returns approaches, with more than 50 per cent of them still not ready to accurately file the returns, according to tax experts. Read more...

 

 

How VAT is driving digital transformation

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Tax authorities in the GCC are starting to use sophisticated digital platforms that require taxpayers to submit data in real time or near-real time, prompting companies in the GCC to enhance their digital capabilities. Read more...

 

 

UAE banks may hike fees to offset additional VAT costs

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As banks in the UAE grapple with the new value-added tax (VAT) regime and the high compliance costs associated with mandatory tax registration, it is likely that they follow international trends by increasing their fees to compensate for the additional costs, banking analysts said. Read more...

 

UAE nationals can claim VAT refund on home construction 

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Emirati house owners have the right to a five per cent value added tax (VAT) refund when constructing their homes, the Federal Tax Authority (FTA) has stated. Read more...

 

 

What are the regulatory challenges for businesses in UAE, Saudi?

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Value added tax (VAT) implementation has been a considerable challenge for most businesses in the UAE and KSA, where compliance with taxes is not common. VAT represents the most comprehensive and transformative regulatory requirement that business has had to take on. Read more...

 

Here are 3 easy steps for VAT registration in UAE 

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The Federal Tax Authority (FTA) said a taxable person or an official representative can register for value-added tax (VAT) in 3 easy steps through its website, taking no longer than 15 to 20 minutes. Read more...

 

 

Companies may struggle to file accurate VAT returns, experts say

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UAE companies filing their first VAT returns will need to account for a number of variables that range from record keeping over the coming five years to making sure they don’t under claim the tariffs they collected, experts said.  Read more...

 

 

VAT inspectors scanning hundreds of products to catch out retailers that 'manipulate' prices

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Consumer affairs inspectors are scanning hundreds of products every day to catch out retailers trying to use VAT as an excuse to "manipulate" prices, the Minister of Economy has said.  Read more...

 

 

VAT recovery in the UAE is another thorn in the process of reclaiming the tax

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The introduction of VAT in the UAE and Saudi Arabia will have implications for conference and event businesses, as companies not registered for the tax in both countries will pay the levy when they hold events, according to a VAT recovery firm.  Read more...

 

 

No VAT, excise tax increase over next five years in UAE 

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The UAE has ruled out increasing value-added tax (VAT) and excise tax over the next five years, said Obaid Al Tayer, UAE's Minister of State for Financial Affairs. Read more...

 

 

 

VAT compliance a challenge for UAE firms, experts say

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Businesses are struggling to comply with VAT, with a significant number not yet registered, even as the Federal Tax Authority (FTA) waives penalties for late registration and extends deadlines for filing tax returns for some companies, experts say. Read more...

 

 

No VAT on realty transactions in designated zones in UAE

altSale and lease of both commercial and residential properties in designated zones will be outside the scope of VAT, according to the latest clarification issued by the Federal Tax Authority (FTA) at a meeting with a group of tax consultants in the UAE. Read more...

 

 

Constructions firms should be wary of VAT-related cashflow issues

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Suppliers need to take proactive measures to protect themselves from cashflow issues in the wake of the implementation of value-added tax (VAT), according to a UAE-based construction expert. Read more...

 

 

Some GCC countries could double VAT to 10%: Report

altSome GCC countries could double VAT rate to 10 per cent mainly due to discrepancy between five per cent statutory and effective tax rate, says a new study released on Sunday. Read more...

 

 

No VAT on exports: Saudi tax authority

altThe General Authority of Zakat and Tax (GAZT) clarified that Saudi Arabian exports are zero-rated under the VAT Law and Implementing Regulations. Read more...

 

 

Free zone: no legal basis for companies refusing to work with freelancers over VAT 

Businesses have no legal basis to refuse to work with freelancers that are not registered for VAT.

That was the assessment of one free zone as it responded to reports that companies are telling self-employed individuals they won't work with them unless they have a VAT registration number. Read more...

 

VAT in UAE: New online calculator to check authenticity of tax invoice

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The Federal Tax Authority (FTA) on Tuesday launched a Tax Registration Number (TRN) verification service on its website, where consumers can check the authenticity of tax invoices and ensure that the merchants and service providers issuing them are registered with the FTA. Read more...

 

 

How VAT affects your insurance spending

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As you are aware, value-added tax (VAT) implemented in the UAE on January 1. This means, as a consumer, the majority of your purchases have five per cent added to the price. Read more...

 

 

 
Ask the Law: Bounced cheques and related laws in the UAE

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Here's what we learnt about bounced cheques in the UAE from readers' questions in Ask the Law. Read more...

 

 

 

 

How VAT affects car owners and sellers in the UAE

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How much you pay to buy a new or second-hand car depends on whether you are buying from an agency, dealer or individual, according to a new guide for drivers released by ServiceMarket.com and CarSwitch.com. Read more...

 

 

 

10 important things you need to know about VAT in UAE

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Here's a rundown of what you need to know about VAT - from what products and services are subject to it to knowing whether companies are trying to pull a fast one on youRead more...

 

 

VAT in UAE offers new opportunity for banks
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The introduction of value-added tax (VAT) in 2018 would mark the beginning of a new era in the economic diversification of the UAE. In the past four decades, the UAE has seen a massive economic transformation from an oil based economy to a well-diversified economy compared to its peers. The GDP of the country went up from a mere $14 billion in 1975 to over $380 billion supported by the growth in oil and non-oil sectors. As a result of the diversification efforts initiated two decades back, oil sector now just accounts for around 30 per cent of the total GDP. Read more...

 

Is your grocery illegally charging VAT? Find out here

The invoice should include the seller's tax registration number (TRN) and the amount of VAT charged. No TRN, no VAT. Read more...

 

UAE Ministry of Finance approves first purchase invoice with VAT

altFollowing its commitment to the UAE's various government finance procedures, laws and regulations; the Ministry of Finance (MoF) has today issued the first VAT inclusive purchase order, and approved the first VAT invoice on its federal financial system. In light of such activity MOF became the first federal entity to implement tax procedures and issue a tax invoice in 2018Read more...

 
 
 
Small corner shops must comply with VAT law: Al Bustani 

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Khalid Al Bustani, Director General of the Federal Tax Authority (FTA), said that all retailers must update all their prices in time for the VAT kick off on January 1. Read more... 

 

 
Family businesses expected to face VAT compliance challenges

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Family businesses across the GCC are likely to face tax compliance challenges as Value Added Tax (VAT) is being introduced in the region starting with the UAE and Saudi Arabia from January 1, 2018. Read more...

 
 
 
 
All you need to know about registering for VAT? 

According to the executive regulations on value added tax (VAT) published last week, the mandatory registration threshold is Dh375,000. Read more...

 
 
 
Guide: How VAT will impact education sector in UAE  

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Implemented across more than 150 countries worldwide, the UAE's 5% VAT is among the lowest in the world. Read more...

 
 
 
Brokers no longer allowed to sign rental contracts

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Brokers legally appointed to manage property of landlords based abroad are no longer allowed to sign unified lease contracts to get an Ejari. Read more...

 
 
 
 
Move on bounced cheques to boost investor confidence

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The decision by Dubai Courts to issue fines instead of jail sentences for bounced cheques will help instill confidence among the business community and ensure that those in debt can resolve their issues, Hamad Buamim, president and CEO of Dubai Chamber of Commerce and Industry, said on Monday.  Read more...

 

Two VAT-specific deadlines for owners of commercial properties

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One, they will need to register with the Federal Tax Authority if the sales or rental proceeds exceeded Dh375,000 in the previous 12 months. And, two, if the owners believe they are likely to generate more than Dh375,000 over the next 30 days. Read more...

 
 
 
 
 
If VAT induces a fear of buying, try leasing a car

If the cost of buying a new car is a worry, then give leasing it a shot. UAE dealerships are all set to upgrade – or update - their financial leasing services to try and ease the reluctance of buyers over the higher costs they will have to bear after VAT’s implementation. Read more...

 
 
VAT in the UAE: 10 things to know

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The Federal Tax Authority (FTA) has announced a list of the top ten things businesses must know before registering for VAT, in order to raise awareness within the business community, as well as society at large. Read more...

 
 
 

Passengers at Dubai airports to pay excise tax

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Dubai Duty Free (DDF) confirmed on Monday that both departing and arriving passengers at Dubai’s airports will pay an excise tax on carbonated drinks and energy drinks in line with the UAE’s implementation of the tax.

 

Zero rating and exemptions available to a number of goods

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Zero-rating of value added tax applies when goods and services are being exported to outside a VAT-implementing GCC state, as well as to international transportation of passengers or goods including a transfer starting or ending in the UAE or passing through its territory

 

Who will bear the burden of VAT in the UAE?

altLess than three months to go until VAT is introduced in the UAE and the sense is that most businesses remain woefully unprepared, and the effect on the wider economy remains unclear. The UAE government is anticipating significant – and much needed – revenues but who is likely to pay the economic cost of VAT?

 

Saudi businesses with revenue exceeding SAR375,000 to pay VAT from Jan

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Saudi Arabia’s General Authority for Zakat and Tax has announced that private sector companies with annual revenue exceeding SAR375,000 ($100,000) will pay monthly value added tax from January 2018, according to reports.

 

VAT and its implications in the GCC

altWith the new economic reform of adding value-added tax (VAT) in the Gulf Cooperation Council (GCC) coming into effect in January 2018, many are concerned about its implications. 

 

Federal Tax Authority clarifies price-setting mechanism for Excise Tax

Following the introduction of Excise Tax in the UAE on October 1, the Federal Tax Authority (FTA) has clarified that the Excise Goods Price List that is downloadable from its website is a reference for tax calculation only, and not for setting retail prices.

 

UAE Cabinet Approves Decisions No. (39) and (40) for 2017 on Federal Tax Authority's Service Fees, Administrative Fines

altThe UAE Council of Ministers has adopted Cabinet Decision No. (39) of 2017 on Fees for Services Provided by the Federal Tax Authority and Cabinet Resolution No. (40) of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE.

 

altThe planned Excise Tax is set to go into effect at the beginning of October 2017, announced the Federal Tax Authority (FTA) at a press conference in Dubai today (Wednesday, September 27, 2017). 

 

President issues VAT Decree Law

The UAE will mark the beginning of new era in its 46-year history on Sunday as it starts implementing excise tax, exactly three months ahead of the launch of value added tax (VAT), another landmark region-wide tax initiative. 

 

Federal Tax Authority debuts website to help businesses navigate UAE's new Tax system

altThe Federal Tax Authority (FTA) has launched its website, providing businesses and consumers with a wealth of information on the upcoming introduction of excise tax and VAT in the UAE.  

 

UAE President issues Excise Decree-Law targetting select 'harmful' products 

President issues new Tax Procedures Law

UAE Federal National Council passes draft on tax-related law

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