Federal Tax Authority convenes ‘Customer Council’ to discuss bolstering tax culture and meeting customer expectations

The Federal Tax Authority (FTA) convened the ‘Customer Council’ to discuss ways to bolster tax culture and meet customers’ expectations, as part of the ‘Customer Councils’ initiative, launched by the UAE Government to enhance the quality of government services by engaging customers in the process of designing innoVATive experiences around their own ideas and suggestions.

The Authority stated that the Customer Council, which was held at Majlis Umm Suqiem in Dubai, brought together representatives of various business sectors and stakeholders from the tax sector. The session included an overview of the Customer Councils initiative, as well as a presentation by a team of FTA experts about the UAE tax system and its advanced procedures that encourage voluntary compliance among businesses with easy and quick processes that are in accordance with best practices. Read more..

 

UAE: Authority announces new code of ethics for accountants, auditors

A new code of ethics which will be applicable to accountants and auditors of financial statements has been rolled out in Abu Dhabi.

The Abu Dhabi Accountability Authority (ADAA) announced the adoption of “Code of Ethics” based on the standards issued by the International Ethics Standards Board for Accountants (IESBA).

The announcement was made during Abu Dhabi’s hosting of its annual board meeting for the first time in the Middle East, currently being held from March 13 to 17.

The adoption of the Code will be applicable to accountants and auditors of financial statements from December 31 onwards.

The 2022 Handbook of the International Code of Ethics for Professional Accountants will be fully adopted including all of its provisions and additional requirements. Read more..

 

Dubai suspends new customs duty on international goods above Dh300

Dubai has decided to suspend a new customs duty on goods bought internationally with a value of more than Dh300.

In an email sent out by Dubai Customs, it has been announced that the previous threshold of Dh1,000 for exemption of parcels and shipments has been reinstated effective of March 1.

The message read “Kindly be informed that Paragraph (a) of Article (2) of Customs Notice 5/2022 related to exemption of consignments with value not exceeding AED 300/- has been suspended, and that it is has been decided to re-establish the previous threshold for exemption of parcels/shipments of AED 1,000/- effective 01-March-2023 until further notice.”

It was in January this year that Dubai introduced new customs duty on goods bought internationally with a value of more than Dh300. Earlier this duty was applicable only if the goods bought exceeded a value of Dh1,000. Read more..

 

UAE hosts three-day workshop to spread awareness about financial crimes

The UAE’s Executive Office of Anti-Money Laundering and Counter-Terrorism Financing has hosted a three-day workshop to spread awareness about financial crimes.

The Middle East and North Africa Financial Action Task Force workshop was held in Abu Dhabi and included more than 100 participants from 21 countries.

It focused on issues related to regional anti-money laundering and efforts to counter the financing of terrorism, bringing together regional and international experts who shared experiences and new challenges.

The workshop aimed to share knowledge between regional partners and identify the main opportunities and threats in an effort to tackle financial crime, said Hamid Al Zaabi, director general of the Executive Office.

“There is no doubt that the large number of participants at this year’s workshop is a clear indication of how much importance is paid to combating financial crime in the region,” he said.

“Only by working closely together can we improve the effectiveness of our efforts and protect our economies.” Read more..

 

Finance Ministry clarifies UAE tax residency rules

The UAE Ministry of Finance has clarified rules to certain provisions under Cabinet Decision No 85 of 2022 on the Determination of Tax Residency, bringing the Emirates in line with other countries that have similar legislation.

The rules, which came into effect on Wednesday, are designed to clarify the domestic definitions for determining whether a person or a legal entity may be considered a tax resident of the UAE.

“The ministerial decision on implementing domestic tax residency rules is important as it gives additional clarity to individuals in respect of when they are considered as tax residents under UAE taxation laws,” Younis Haji Al Khouri, Undersecretary in the Ministry of Finance, said on Wednesday.

In 2020, it was announced that tax residency and commercial activities certificates would be issued through the Federal Tax Authority of the UAE.

Tax residency certificates are issued to eligible government entities, companies and people looking to benefit from double taxation agreements signed between the UAE and other countries. Read more..

 

UAE and Egypt's anti-money-laundering bodies sign pact to boost co-operation

The UAE’s Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) has signed a preliminary agreement with its Egyptian counterpart to boost co-operation to combat money laundering and terrorist financing.

The agreement with the Egyptian Money Laundering and Terrorist Financing Combating Unit (EMLCU) further strengthens the existing collaboration between the UAE and Egypt, the Executive Office said in a statement on Thursday, as the meetings between the government bodies concluded.

The two sides will focus on improving the understanding of risks and will exchange knowledge, expertise and best AML/CFT practices, with a view to bolster the response of both countries to shared threats and risks.

“The signing of the MoU is yet another step in a long series of bilateral meetings and achievements that have undoubtedly strengthened national and regional efforts to counter illicit financial flows,” said Hamid Al Zaabi, director general of the Executive Office. Read more..

 

UAE: VAT will remain key source of revenue; Dh95.4 billion collected since 2018

Value-added Tax (VAT) will continue to be the primary revenue-generating tax for the UAE for the next few years, according to a report published by WTS Dhruva Consultants on the occasion of the fifth anniversary of VAT.

Starting from January 2018, the UAE levied five per cent VAT on goods and services as part of a wider GCC framework. The total revenue distributed at the state level in the UAE for VAT has amounted to over Dh95.4 billion ($26 billion), since its implementation in 2018 till October 2021, according to media reports.

The likely implementation of e-invoicing and the increase in the VAT rate will further reinforce the need for businesses to ensure that their VAT affairs are in order, says WTS Dhruva report.

The introduction of VAT five years ago was a revolutionary development for the UAE. The tax – which is imposed at the flat rate of 5% on most goods and services sold locally – has impacted all aspects of private and business life and has required a paradigm shift in the way businesses and government organisations conduct their activities. Read more..

 

Ministry of Finance Confirms Applicable Taxable Income Threshold for Corporate Tax

The Ministry of Finance (MoF) has published the approved Cabinet Decision 116 of 2022 on the Applicable Taxable Income Threshold for Corporate Tax.

The Decision follows the issuance of Federal Decree Law on the Taxation of Corporations and Business (the “Corporate Tax Law”) in December 2022. Businesses will become subject to UAE Corporate Tax from the beginning of their first financial year that starts on or after 1 June 2023. The rate has been set at 9% and is applicable to taxable income above AED 375,000, in alignment with what the Ministry announced earlier, ensuring that the UAE's Corporate Tax regime is amongst the most competitive in the world and strengthening the country's position as a global financial and business hub.

Based on the Decision, a 0% rate will apply to taxable income that does not exceed AED375,000 during the same tax period regardless of the number of businesses or business activities the taxable person is engaged in during that period.

A 9% rate will apply to taxable income exceeding AED 375,000 during the relevant tax period. Read more..

 

New UAE rule: Attestation mandatory for import invoices worth Dh10,000 above; violators to face fines

Companies in UAE will soon be subject to a new compliance requirement as they would be required to attest import invoices with a value of Dh10,000 and above by the UAE Ministry of Foreign Affairs and International Cooperation (Mofaic).

According to a tweet issued by Mofaic — as per Cabinet Resolution No. 38 of 2022 regarding fees for certification of invoices and certificates of origin for imports into the UAE — this new rule will come into effect on February 1, 2023.

Mayank Sawhney, managing director at MaxGrowth Consulting, said this new regulation will apply to all goods imported into the UAE with a value of Dh10,000 and above and the attestation of Invoices will be done electronically.

“The attestation cost of Dh150 per commercial invoice will be applicable and customers will have a grace period of 14 days after the declaration of goods to comply with the attestation. Failure to do so will result in a penalty of Dh500 per invoice levied by the Mofaic on the non-complying businesses,” said Sawhney. Read more..

 

UAE: Central Bank issues new guidance on anti-money laundering and combatting terrorism financing

The Central Bank of the UAE (CBUAE) has issued new guidance on anti-money laundering and combatting the financing of terrorism (AML/CFT) for licensed financial institutions (LFIs) including banks, finance companies, exchange houses and insurance companies, agents and brokers.

The guidance, which comes into effect immediately, will assist financial institutions in understanding risks and effective implementation of their statutory AML/CFT obligations and takes Financial Action Task Force (FATF) standards into account.

The Guidance requires LFIs to demonstrate compliance with its requirements in line with the relevant CBUAE notice.

The guidance discusses the use of digital ID systems by LFIs to address their customer due diligence (CDD) obligations. It focuses on the Digital ID mechanisms that LFIs should employ to perform CDD on an ongoing basis in relation to natural persons. Read more..

 

UAE: New law revises legal age for starting business

The age limit for running a business in the UAE has been revised under the new Commercial Transactions Law, according to the Ministry of Economy (MoE).

In a recent media briefing, Abdullah Al Saleh, undersecretary of the MoE, reviewed the new law, which seeks to support and develop the country's business environment.

Among the most prominent features of the new Commercial Transactions Law are:

- It reduces the age of legal capacity to practice business to 18 years
- The law establishes a legal reference for commercial transactions for banking institutions to stimulate investment and give businesses wider scope for growth and competition
- It offers support to Islamic banking in the country and establishes it as one of the main drivers of growth... Read more..

 

UAE to keep 9% corporate tax rate for foreseeable future, Finance Ministry official says

The UAE plans to keep the rate of corporate tax announced last year unchanged for the foreseeable future as companies in the Arab world’s second-largest economy prepare to enter the new tax regime, the undersecretary of the Ministry of Finance has said.

“The rate is agreed and fixed at 9 per cent … as long as the [corporate tax] law is there,” Younis Al Khouri told The National on Monday in Abu Dhabi. “If there is any review, we will announce it later but as of today, no change in the rate.”

Last January, the UAE introduced the federal corporate tax with a standard statutory rate of 9 per cent, which will go into effect for businesses whose financial year starts on or after June 1 this year.

In December, the country issued the federal corporate tax law, bringing the income of companies exceeding Dh375,000 ($102,000) in the corporate tax bracket. Read more..

 

UAE: Employees to be fined for not getting insurance against job loss

The UAE employees will face a financial penalty for not registering for the mandatory unemployment insurance scheme.

Starting from January 1, 2023, all employees – both Emiratis or expatriates – working in the private and federal government sectors are required to register for the involuntary loss of employment scheme. But investors, domestic helpers, temporary contract workers, juveniles under the age of 18 and retirees who’re entitled to a pension and joined a new job are exempted from registering for the scheme.

Employees with a basic salary of less than Dh16,000 are required to pay Dh5 per month or Dh60 per annum plus VAT as a premium. They will be compensated with 60 per cent of the average basic salary for the job loss for three consecutive months. Read more..

 

Dubai Municipality suspends 30% tax on alcohol sales

Retailers and restaurants in Dubai will not be required to pay the existing 30 per cent municipality tax on alcohol for 2023, Dubai Municipality confirmed on Monday.

Replying to a user on Twitter, the authority's official page said that collection of the tax had been temporarily suspended. The change took immediate effect on January 1.

"Kindly note that Dubai Municipality has temporarily stopped collecting the 30 per cent fee from alcoholic beverage companies for a period of one year from the beginning of 01/01/2023 to the end of 12/31/2023," the tweet said.

"The companies authorised to sell in the emirate of Dubai have been notified of the decision."

Maritime & Mercantile International (MMI), an off-licence chain, informed its customers in a statement on Sunday, stating that it was cutting prices for shoppers immediately. Read more..

 

Shoppers to pay more for imported goods as Dubai lowers tax threshold

Shoppers importing goods into Dubai from outside the Gulf will pay tax on more items after authorities lowered the exemption threshold.

Any goods worth more than Dh300 will now be taxed at 5 per cent.

Before January 1, the threshold was Dh1,000 ($272).

Dubai Customs set out the decision on its website. Ship & Shop, Aramex and other courier companies informed customers of the decision by text message this week.

The move is widely expected to benefit local and home-grown online retailers, giving them a competitive edge.

The charge is in addition to 5 per cent VAT on goods imported into the Gulf.

This breakdown does not apply to tobacco, tobacco products, e-cigarettes and nicotine liquids, which are taxed separately under a December 2019 decision. Read more..

 

UAE Central Bank issues new anti-money laundering guidelines for insurance sector

The UAE Central Bank has issued new guidelines for the licensed financial institutions (LFIs) operating in the insurance sector as it continues to take measures to combat money laundering and the financing of terrorism.

The guidelines, effective immediately, will help financial institutions enforce their statutory AML/CFT [anti-money laundering and countering the financing of terrorism] obligations, thebanking regulator said on Thursday.

Insurance and reinsurance companies, agents and brokers have been given one month time to comply with the new regulations.

“Anti-money laundering and combating the financing of terrorism is our top priority, as we work with the LFIs and the relevant authorities to prevent and mitigate these types of financial crime activities,” said Khaled Balama, governor of the UAE Central Bank.

“We expect the LFIs of the insurance sector, to comply with this guidance and enhance their measures and efforts to maintain the soundness of the sector.” Read more..

 

UAE: Will residents have to pay 9% corporate tax on their salary from next year?

The UAE will introduce corporate tax at nine per cent from June 1, 2023, setting a threshold of Dh375,000 profit for the companies.

The threshold has been set in line with the government’s efforts to support small and medium enterprises and startups.

The government released corporate tax law last week, revealing some important details for the companies to be prepared for the new tax regime. Below are all the important details that UAE residents and companies need to know about corporate tax:

7 UAE law firms fined Dh100,000 in anti-money laundering crackdown

Seven law firms have been fined Dh100,000 each for continuing to breach anti-money laundering (AML) and counter-terrorism financing (CTF) measures, authorities have announced.

The Ministry of Justice said the fines were imposed in accordance with the provisions of Federal Law No. 20 of 2018 on countering money laundering, terrorist financing and illegal organisations.

According to the ministry, these measures are part of the UAE’s “continuous and extensive efforts” to address the risks associated with financial crimes. They “reflect the strong commitment of the ministry towards strengthening its AML and CTF supervisory role over legal professionals”.

The ministry had recently announced numerous legal measures against non-compliant lawyers. Last month, the ministry suspended the licences of 200 law firms in the UAE for one month over non-compliance with established procedures to combat money laundering. Authorities also took legal action against non-compliant lawyers as part of controls and procedures in this regard. Read more..

UAE issues corporate tax law, paving way for implementation in 2023

The UAE issued its federal corporate tax law on Friday that will levy a headline 9 per cent rate on taxable income exceeding Dh375,000 ($102,000).

Taxable profits below the aforementioned threshold will be subject to a 0 per cent rate of corporate tax. No corporate tax will apply on salaries or other personal income from employment — be it in the government, semi-governmental, or private sector, the Ministry of Finance said in a statement accompanying the 56-page law that was published on its website on Friday.

Businesses will become subject to the UAE corporate tax from the beginning of their first financial year that starts on or after June 1, 2023, as previously announced at the start this year.

The Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses provides the legislative basis for the introduction and implementation of a federal corporate tax in the UAE and is effective for financial years starting on or after June 1, 2023, the ministry said. Read more..

UAE committee details plans to boost information sharing on financial crimes

The UAE’s Public-Private Partnership Sub Committee has put forth a regulatory approach to prevent money laundering and terror financing activities by sharing strategic information and intelligence between the country's public and private sectors.

The national body, which was established last year, aims to bring together government agencies and the private sector to fight financial crime, the Executive Office of Anti-Money Laundering and Counter-Terrorism Financing said in a statement on Tuesday.

In its first public consultation paper, the committee recommended that consideration be given to confidentiality and data protection obligations. It also called for intelligence sharing through the creation of a dedicated secure digital platform. Read more..

UAE announces new VAT exemption from January 1

The UAE’s Ministry of Finance (MOF) on Thursday said director services undertaken by natural persons serving as members of boards at entities and institutions across the UAE will not be subject to value-added tax (VAT) from January 1, 2023.

Meanwhile, VAT will still apply to the director services for legal persons serving as board members that delegate a natural person to act in the name of the legal persons as a member of the board of directors.

Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, noted that as per the Cabinet Decision amending the Executive Regulation of the Federal Decree-Law on VAT, which will go into effect on January 1, 2023, performing the duties of a member of a board of directors at a government entity or private establishment in exchange for a reward (monetary or benefits in kind) will not be considered as a supply of services for the purposes of VAT. Read more..

UAE: New payment method announced for tax liabilities

The Federal Tax Authority (FTA) announced that it will be discontinuing the use of the eDirham system in paying taxes as of today, October 30, 2022, replacing it with Magnati, the smart payment option from First Abu Dhabi Bank (FAB).

Magnati provides advanced software solutions for online payments, using next-generation advanced technologies to provide a seamless and efficient payment service for FTA customers.

The FTA explained that the Magnati smart payments feature allows registrants to pay their tax obligations via FAB’s Magnati platform, in addition to enabling taxpayers to settle any payment due to the FTA using credit cards. Read more..

Federal Tax Authority refunds tax incurred on building and operating mosques

The Federal Tax Authority (FTA) has launched a mechanism for refunding value added tax (VAT) incurred on building and operating mosques on the FTA’s e-Services portal, in light of Cabinet Decision No. (82) of 2022 in that regard, which began to be implemented as of yesterday Saturday 29 October 2022, covering all mosques in the UAE, provided that the refund applications are submitted within time limits based on the completion date of the mosque’s construction.

In a press statement issued today, the FTA announced that it will begin accepting applications for refunding input tax incurred on building mosques as of Tuesday, 1 November 2022, via the FTA’s e-Services portal. Refund applications for the refund of tax incurred on operating mosques will be accepted at a later date on the same portal.

FTA’s Director General, His Excellency Khalid Ali Al Bustani emphasized on the importance of the decision, which is in line with the wise leadership’s directives to encourage charity work and public benefit activities that are practiced in accordance with the legislation in force in the UAE. Read more..

UAE Finance Ministry amends some provisions of VAT law

The UAE Ministry of Finance announced amendments to some provisions of the Federal Decree-Law No 8 of 2017 on value added tax (VAT), which will be effective from January 1, 2023, according to state news agency Wam.

The amendments made are in line with international best practice in light of the GCC Unified VAT Agreement. They are based on experiences, challenges faced by various business sectors as well as recommendations received from relevant parties, Wam said.

The UAE in 2018 introduced 5 per cent VAT on a majority of goods and services as part of its plans to diversify the economy and reduce its dependence on oil. Read more..

FTA Introduces new Statute of Limitations

Federal Decree-Law No. 19 of 2022 on Excise Tax has introduced a new Article 25 (bis) on the statute of limitations. This provides the maximum timeframe within which the FTA can conduct a Tax Audit or issue a Tax Assessment. The FTA may conduct a tax audit or issue a tax assessment to a taxable person before the expiration of 5 years from the end of the relevant tax period.
However, the FTA may conduct a tax audit or issue a tax assessment to the taxable person after 5 years from the end of the relevant tax period in the following instances: 

• If a notification for the commencement of a Tax Audit is issued before the expiration of the 5-year period, provided that the Tax Audit is completed or the Tax Assessment is issued, as the case may be, within 4 years from the date of notification of the Tax Audit.
• If the taxable person submits a voluntary disclosure in the 5th year from the end of the relevant tax period, provided that the tax audit is completed or the tax assessment is issued, within 1 year from the date of submission of the voluntary disclosure. No voluntary disclosure may be submitted after the expiration of five years from the end of the relevant Tax Period
• In the case of tax evasion, the FTA may conduct a tax audit or issue a tax assessment within 15 years from the end of the tax period in which the tax evasion occurred.
•  If a taxable person failed to register for Excise Tax within the prescribed period, the FTA may conduct a tax audit or issue a tax assessment within 15 years from the date on which the taxable person should have registered for Excise Tax.

UAE announces changes to Excise Tax Law to minimise tax avoidance, support business sector

The UAE Ministry of Finance unveiled amendments to some provision of the Federal Decree-Law No 7 of 2017 on Excise Tax, effective from October 14, 2022.

The amendments of some provisions of the law aim at supporting the business sector, facilitating fulfilment of obligations for taxable persons, minimising tax avoidance, and addressing challenges related to the application of the excise tax.

The Federal Decree-Law No. 19 of 2022 on the Amendment of Some Provisions of the Federal Decree-Law No. 7 of 2017 on Excise Tax includes the following new amendments:

1. Persons importing excise goods for purposes other than conducting business will be excepted from tax registration, while remaining liable to pay the relevant excise tax on the import. Additional amendment to the same Article requires that application for exemption from tax registration shall be submitted prior to the import activity and not when the tax is due. Read more..

UAE: Soon, pay taxes and get refunds in one digital platform

A new platform — set to be launched later this year — is bound to enhance the way taxpayers can access the services of the country's Federal Tax Authority (FTA).

Called EmaraTax, the portal will allow users to pay taxes and obtain refunds in just a few clicks. It also boosts the FTA's ability to administer taxes in the UAE, and enables better, faster decision-making and earlier engagement with taxpayers who need support.

EmaraTax represents a major milestone in the FTA's ambition to be a leading, digitalised, tax administration in full recognition of the UAE’s national digital agenda.

Providing online access to a larger number of FTA services than ever before, the platform offers a range of significant enhancements that will benefit individual taxpayers, tax agents, legal representatives, foreign missions and diplomats, customs bodies and verification agencies, among others. Read more..

FTA strengthening cooperation mechanisms to improve tax administration

The Business Advisory Group for Tax Agents has held its first meeting, chaired by Khalid Ali Al Bustani, director-general of the Federal Tax Authority (FTA), attended by FTA officials and representatives of the Authorised Tax Agents sector in the UAE – members of the Group.

Held at the FTA headquarters, the meeting discussed the group’s operations and ways to achieve its goals, which include supporting the FTA with improving the administration of tax, operation of the tax system and implementation of tax policy; allowing the FTA to better understand and obtain a wider view of the commercial environment and challenges of business and tax agents; and building and maintain effective relationships with tax agents; to leverage the feedback for the improvement of FTA services.

The meeting also explored the most important current tax issues and developments in the tax system, including the specialised tax agent project, topics raised by group members, and how to tackle common errors in the market. The discussions held highlighted the importance of adhering to the group’s mandate to achieve its goals of bridging communication with the tax agent sector as a whole, in order to ensure that the sector is represented by the tax agent group members, raising its challenges and suggestions. Read more..

UAE announces new policy for responsible sourcing of gold

The Ministry of Economy (MoE) has published the due diligence regulations for responsible sourcing of gold on its website in both Arabic and English, as part of its continuing efforts to implement a stronger anti-money laundering and combating the financing of terrorism (AML/CFT) system in the UAE.

The policy includes a number of controls and standards for dealers in the precious metals and stones (DPMS) sector (gold), which were developed through practical implementation in accordance with the due diligence guidelines issued by the Organisation for Economic Cooperation and Development (OECD), known to be among the global best practices in this regard.

Safeya Al Safi, director of the Anti-Money Laundering Department at the Ministry of Economy, stated that the new policy aims to enhance the commitment of gold refineries and companies to implementing the due diligence measures for responsible sourcing of gold. This contributes to protecting the interests of companies engaged in pre-manufactured bullion and gold-related activities from sanctions and administrative penalties for non-compliance in accordance with the provisions of the Executive Regulations of Federal Decree Law No. (20) of 2018 on anti-money laundering and combating the financing of terrorism and illegal organisations. Read more..

UAE introduces paperless tax refund system for tourists

The UAE has introduced a paperless tax refund system for tourists visiting the country, doing away with the need to retain receipts.

Under the initiative, registered retail merchant tills in the Emirates will generate electronic invoices that will allow visitors to claim VAT refunds.

The system is integrated for purchases at a variety of hotels, shopping centres, malls and other retail locations.

Tourists will not be required to carry paper invoices to claim the refund, which they can collect in cash or have it transferred to a credit card on departure through one of Planet Tax Free's 100 self-service kiosks available at 13 airports or ports in the UAE.

“The new solution is integrated electronically between retail outlets and the tax refund scheme, ensuring a seamless digital process of issuing, sending, modifying and saving invoices for tourists,” said Khalid Al Bustani, director general of the Federal Tax Authority.

“The system achieves high satisfaction rates by users for its simple, effective and smooth tax-refund process for eligible tourists.” Read more..

Corporate tax: What the new transfer pricing rule means for family businesses

As businesses adjust their legal and accounting structures ahead of the UAE’s new corporate tax regime, which comes into effect next June, it is family businesses that may need to rethink their traditional ways of operating.

Transfer pricing regulations, a fundamental part of any corporate tax policy, will see greater scrutiny placed on businesses providing financial support to each other, a practice more commonly associated with family businesses. That was the view of expert speakers at a recent corporate tax discussion, led by ICAEW.

The UAE’s introduction of a corporate tax levy of nine per cent aligns with the broader OECD Pillar II framework and its recent global minimum corporate tax requirement, which subjects large multinationals to a minimum 15 percent tax rate. Within this framework, OECD members, including the UAE, are obligated to include transfer pricing regulations to prevent multinational businesses from exploiting tax loopholes. Read more..

UAE tightens real estate investment rules; brokers to report cash deals worth Dh55k and above

The UAE has tightened real estate investment rules and asked the property agents, brokers, and law firms to report cash transactions worth Dh55,000 and above to the UAE’s Financial Intelligence Unit.

The government announced new reporting requirements for certain real estate transactions to strengthen its regulatory framework for anti-money laundering and countering the financing of terrorism.

In addition, experts said the government’s latest move may bring temporary slowdown in real estate sector that attracted more than Dh150 billion investment during the first half of 2022. Real estate activities are estimated to generate about 5.5 per cent of the UAE’s overall gross domestic product (GDP) annually.

The Ministry of Economy (MoE) and the Ministry of Justice (MoJ) developed the new criteria for real estate transactions in partnership with the UAE’s Financial Intelligence Unit (FIU). Read more..

UAE to introduce new gold import rules with up to $1.36m in fines for businesses in breach

The UAE will introduce a new set of regulations on gold imports in line with international rules that seek to thwart money laundering and the financing of terrorism and illegal organisations.

The guidelines were announced by the Ministry of Economy on Thursday and are the latest in a series of initiatives by the Emirates to enhance oversight of the trade and circulation of gold in line with international standards.

The new policy, which governs the responsible sourcing of gold by precious metal importers and refiners, aims to consolidate the UAE’s position as a leading global centre for bullion.

Those found in breach of the regulations face fines in the range of Dh50,000 to Dh5 million ($13,623 to $1.36m).

Regulated businesses must comply and enforce the new provisions. These include companies operating refineries and the recycling of gold products inside and outside the country.

The initiative includes the establishment of the Emirates Gold Bullion Committee to unify national efforts to enhance oversight of the gold sector, with the participation of the private sector, and the setting up of a federal platform for gold trading. Read more..

UAE Central Bank unveils awareness campaign for hawala remittances

The UAE Central Bank, in co-operation with the Ministry of Interior and other law enforcement agencies, has introduced a public awareness campaign to highlight the laws and standards for remitting money through registered hawala providers (RHPs), state news agency Wam said on Thursday.

The campaign features a series of messages carried on the platforms of all participating entities and through media outlets, Wam said. It aims to enhance the protection of end users and introduce legal frameworks and legislation to regulate money transfers through RHPs.

“The Central Bank of the UAE launched the Hawala Providers’ Registration system with the aim of ensuring transparency, integrity and financial governance in transactions executed through hawala providers registered with us, and to put in place measures to counter money laundering and combat the financing of terrorism,” said Khaled Balama, governor of the Central Bank. Read more..

VAT Public Clarification on Gold Making Charge

The FTA has issued a Public Clarification that provides guidance on the application of the VAT legislation with regards to making charges received by gold jewellers.
In some instances, taxable persons supplying gold jewellery reflect the gold price and making charge separately on the tax invoice issued for the supply, and in other cases both are reflected as a total price.

If the supplier charges separate considerations for the gold and the making service, or reflects the price of these components separately, the supplier is required to impose VAT on the service component.

To read the full Public Clarification click here…

UAE Central Bank imposes sanctions on finance company for not complying with guidelines

The UAE Central Bank imposed financial and administrative sanctions on a finance company for failing to submit its audited financial statements on time and not complying with guidelines.

The unnamed company was fined on May 18 as per the “Decretal Federal Law No (14) of 2018 regarding the Central Bank and the Organisation of Financial Institutions and Activities, as amended, the Finance Companies Regulation and Consumer Protection Regulations”, the banking regulator said on Tuesday.

The company was asked to “remedy its shortcomings” within a month of the notification after it was found to be in contravention of the consumer protection regulations and complaint management system rule book. Read more..

Sweeping new regulations for auditors to practice in UAE

The UAE’s Ministry of Economy has announced new regulations for auditors to practice in the country.

The regulation of Federal Law No (12) of 2014 regarding Reorganisation of Accounts Auditors Profession will be implemented from September 13 this year, top officials said during a media briefing held in Abu Dhabi.

The new regulations include adopting the ‘financial reporting ecosystem’ model, which makes the UAE one of the first countries globally to adopt such an advanced model. Also, the UAE Fellowship Programme will become a requirement for practicing the profession in the country. And there will be different eligibility criteria based on their years of experience for non-Emiratis to practice auditing.

Abdulaziz Al Nuaimi, assistant undersecretary for Commercial Affairs at the Ministry of Economy, noted the new measures will make life easier for auditors to practice in the country. Read more..

UAE reaffirms commitment to strengthening AML/CFT regulations and measures to combat financial crime

The UAE has reaffirmed its ongoing commitment and efforts to strengthen its regulatory framework in relation to anti-money laundering (AML) and counter terrorist financing (CFT).

In line with international standards and National Strategy of the AML/CFT, UAE authorities are continuing to maintain and implement effective sanctions with robust screening systems and processes, to ensure the integrity, safety and security of the global financial system.

To date, effective measures and proactive regulatory action for protecting the nation’s financial environment have been implemented by the competent UAE authorities, including the Central Bank of the UAE; Securities and Commodities Authority; Ministry of Economy; Ministry of Justice; Abu Dhabi Global Market; and the Dubai Financial Services Authority, as well as close inter-agency cooperation. Read more..

FTA launches ‘whistle-blower’ scheme for tax violations, evasion

The Federal Tax Authority on Thursday launched a “whistle-blower” programme for tax violations and evasion, which aims to promote community control over local markets, raise the level of tax compliance and reduce tax evasion cases in the UAE.

The initiative called “Raqeeb” was rolled out in line with the Cabinet decision aimed at raising awareness among the public and increasing compliance rates. It is effective as of today, April 15, 2022.

The scheme allows the FTA to receive reports from individuals on tax evasion cases, tax-related fraud, and violations of tax legislation. It also allows the authority to verify the reports and grant monetary rewards to informants when certain conditions are met, the FTA said in a statement.

The programme seeks to enhance transparency and competitiveness in the field of doing business, raise tax compliance rates, and boost tax awareness and society’s confidence in the tax system. It also motivates individuals to carry out their social responsibilities and contribute to combating tax violations. The programme grants the informants with monetary rewards if the report leads the authority to collect tax amounts worth more than Dh50,000. Read more..

 

New cheque rules

The UAE’s new law on decriminalisation of bounced cheques that became effective on January second this year will become a major hurdle for banks to legally pursue loan defaulters who fled the country. Read more..

New UAE corporate tax: Ministry to review, reduce service fees for businesses

The UAE Ministry of Finance will review service fees in all ministries and federal entities in a bid to reduce them.

The review comes weeks after the ministry announced a federal corporate tax on business profits that will be effective for financial years starting on or after June 1, 2023.

The review aims to reduce the financial burden on the business community in the country, the ministry said.

With a standard statutory tax rate of 9 percent and a 0 per cent tax rate for taxable profits up to Dh375,000 to support small businesses and startups, the UAE corporate tax regime will be amongst the most competitive in the world. Read more..

 

UAE working with OECD to implement global tax standards

The UAE’s Ministry of Finance and the Organisation for Economic Co-operation and Development discussed the Emirates’ progress in implementing international tax standards and ways to further strengthen co-operation.

The ministry and OECD discussed the extension of their strategic partnership by renewing the joint memorandum of understanding for 2022-2024 during a meeting between Younis Al Khoori, undersecretary of the Ministry of Finance, and Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy and Administration.

“The UAE is keen to co-ordinate with the OECD in all relevant areas, in line with its commitment to implement international tax standards and practices with the highest levels of transparency with regard to tax-related matters,” Mr Al Khoori said.

He highlighted the UAE’s commitment to meeting OECD standards, especially in exchanging information for tax purposes.

The UAE will introduce a 9 per cent federal corporate tax on the profit of businesses from the financial year starting on or after June 1, 2023, the Ministry of Finance said on January 31. Read more..

UAE labour law: 7 new penalties firms face for delaying salaries

Payment of salaries on time is guaranteed under UAE laws. Hefty fines and penalties are imposed for delaying payment of wages in the country.

The Ministry of Human Resources and Emiratization (MoHRE) recently issued a decree that introduces new penalties against employers who fail to pay wages on time.

Employers with 50 or more workers will be subject to field inspections from the ministry and warnings if wages were not paid 17 days after the due date. For smaller establishments, the issuance of work permits will be suspended. Penalties escalate with further delay in paying wages.

Here are the seven penalties introduced as per the new decree:

1. Issuance of official reminders: Companies will receive official reminders to pay wages after the third and 10th day from the due date. Read more..

UAE stresses commitment to anti-money laundering efforts after global watchdog decision

The Financial Action Task Force said the UAE had made “significant progress” to strengthen its anti-money laundering controls including by demonstrating increased and swifter action against financial criminals.

In a statement on Friday, following the conclusion of its meetings in Paris, the global money laundering and terrorist financing watchdog confirmed there would be “increased monitoring” of the UAE’s implementation of its action plan to counter money laundering and terror financing. The increased monitoring regime is referred to as the FATF ‘grey list’.

On Friday, FATF said the UAE had “made a high-level political commitment” to work with the organisation “to strengthen the effectiveness” of its anti-money laundering and counter terror financing efforts.

The UAE’s Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism said, via state news agency Wam on Friday, the country takes “its role in protecting the integrity of the global financial system extremely seriously”.

The UAE “will work closely with the FATF to quickly remedy the areas of improvement identified”, it said. Read more..

 

New UAE app lets you know if a cheque is likely to bounce

A new app launched in the UAE on Tuesday allows both businesses and individuals to instantly know if a cheque issued through a UAE-based bank is likely to bounce.

Launched by Al Etihad Credit Bureau (AECB), Marwan Ahmed Lutfi, CEO of AECB, stressed that it has now become highly important that people in the assess the risks when they receive the cheques.

Once users have downloaded and registered, they can scan the cheque image or enter the details manually. The app is available for both iOS and Android devices.

The service will cost Dh10 and a five per cent value-added tax (VAT).

The ChequeScore calculates using the AECB’s Credit Score, another product provided by it, taking into consideration the user’s cheque issuance and clearance history, on-time payment patterns, and other factors that support the predictive nature of this score. Read more..

Why employees will continue to pay no income tax in the UAE

The UAE has long been a favourite destination for foreign workers, attracted by the country’s tax-free salaries and lower cost of living.

Employees in the UAE will continue to enjoy paying no tax on their incomes, the Ministry of Finance confirmed on Monday when it announced plans to introduce a federal corporate tax from June 2023.

There will be no tax on personal incomes “from employment, real estate and other investments, or on any other income earned by individuals that does not arise from a business or other form of commercial activity licensed or otherwise permitted to be undertaken in the UAE”, the ministry said.

The UAE will introduce a federal corporate tax rate of 9 per cent on the profit of businesses from the financial year beginning on or after June 1, 2023.

“The tax regime will be among the most competitive in the world,” the ministry said, and added that it will be in line with World Trade Organisation rules. Read more..

UAE: 4 types of taxes currently imposed, explained

The UAE’s Ministry of Finance had on Monday announced a federal corporate tax on business profits from June 1, 2023.

With a standard statutory tax rate of 9 per cent, the UAE corporate tax regime will be among the most competitive in the world.

A 0 per cent tax rate is applicable for taxable profits up to Dh375,000 to support small businesses and startups. No corporate tax will apply on personal income from employment, real estate and other investments, or on any other income earned by individuals that does not arise from a business or other form of commercial activity licensed or otherwise permitted to be undertaken in the UAE.

The UAE does not levy income tax on individuals, but it does have other types of taxes. According to the official UAE Government website, the following taxes are applicable in the country:

Excise tax
It is levied on specific goods which are typically harmful to human health or the environment. Consumers need to pay more to buy such goods. The aim is to “reduce consumption of unhealthy and harmful commodities while also raising revenues for the government that can be spent on beneficial public services”. Read more..

UAE's wage protection system: Employee rights, fines for violators explained

The UAE is home to expatriates from over 200 countries, which contribute to economic development and the young nation's progress.

The UAE government's Wage Protection System (WPS), which has made payments and wage distribution easier and transparent, is extended to domestic workers, starting today.

Initially, the mechanism was launched in 2009 and later further strengthened in 2016.

The pioneering policy was developed by the UAE's Central Bank and the Minister of Human Resources and Emiratisation (MoHRE).

The policy reflects the UAE's pioneering role in safeguarding the worker's wage and enhancing transparency and competitiveness to strengthen the work relationships in the country. Read more..

 

New UAE law: What happens if postdated rent cheques bounce?

Dishonour of a cheque on grounds of insufficient funds in the bank account is no longer a criminal offence in the UAE. Therefore, the provisions of Federal Decree Law No. 14 of 2020 amending Certain Provisions of the Federal Law No. 18 of 1993 Concerning the Commercial Transaction Law (the 'Amended Commercial Transaction law') and the provisions of Circular No. 9 of 2021 Concerning the Disposal of Decriminalised Cases of Issuing Cheques in Bad Faith and Refusing to Pay (the ‘Circular No. 9 of 2021’) issued by Attorney General Office of Dubai Public Prosecution are applicable.

It should be noted that since January 2, 2022, the dishonour of cheque on grounds of insufficient funds in the bank account of the payor is no more a criminal offence in the UAE. However, the payee of the cheque may file an execution case against the payor.

This is in accordance with Article 635 (Bis) of the Amended Commercial Transaction law, which states: "A cheque, which bears the drawee's stamp as non-paid for unavailable or insufficient fund, shall constitute an executive instrument as per the Executive Regulation of the Federal Law No. 11 of 1992 and its bearer shall have the right to demand the coercive enforcement, wholly or partially. Read more..

New freelance licence, culture visas: Dubai to create 150,000 jobs for creatives

New freelance licence, culture visas: Dubai to create 150,000 jobs for creativesDubai is betting big on the creative industry to attract innovators, professionals and new talent from around the globe as part of its strategy to accelerate growth and development of the new-age sectors in the emirate.

The emirate has been launching a host of measures to transform the region’s commercial and trading hub into a hub for talented professionals as well. Dubai aims to double the creative sector’s contribution to its GDP and boost the number of jobs from 70,000 to 150,000 within the next five years.

To expedite the creative industry’s development in the emirate, Dubai has taken a number of initiatives in the past year with the latest being the launch of a three-year “Talent Pass” licence for freelance work (self-employment) to attract talented professionals in a wider range of fields such as technology, consultancy, education, media and others.

In addition to a three-year visa, the freelancers will also be eligible to rent office space provided by Dubai Airport Free Zone, which will allow them to access and tap over 1,800 international and local companies.

This latest initiative is a joint venture between Dubai Airports Free Zone, Dubai Culture and General Directorate of Residency and Foreigners Affairs (GDRFA). Read more..

3-year Dubai visa with new freelance licence as ‘Talent Pass’ is announced

Authorities in Dubai have launched a ‘Talent Pass’ licence for freelance work.

The new licence will be available for people with special skills and expertise from around the world. It aims to attract global talents and professionals in the fields of media, education, technology, art, marketing and consultancy.

The Dubai Airport Freezone (DAFZ) signed an agreement with Dubai Culture and the General Directorate of Residency and Foreigners Affairs (GDRFA) to facilitate the new initiative. The MoU creates the framework for cooperation and coordination to process licences, visas and other services that support innovators in establishing, operating and growing their business in the Emirate.

The ‘Talent Pass’ qualifies its holder to obtain a residence visa for three years, in addition to renting office space provided by DAFZ. Office solutions feature support and flexible operation costs, in addition to the option of obtaining services remotely. Read more..

Dubai Courts begin decriminalising cases of bounced cheques

Dubai Courts have begun to apply new legislation that decriminalises most cases of bounced cheques.

Only offences found to involve fraud – such as when a person deliberately sets out to deceive the recipient or withdraws funds before the cheque can be cashed – will be brought before the courts.

The move is in line with efforts to speed up judicial procedures and improve the efficiency of the court system.

“Criminalisation has been limited to cases of fraud in issuing a cheque or in cases where there were sufficient funds but were withdrawn by the issuer,” said Khalid Al Mansouri, Chief Judge of the Enforcement Court, in a statement.

He said settling cases out of court would lead to swifter resolution for complainants. Read more..

New UAE labour law 2022: How is gratuity calculated?

The end-of-service gratuity of an employee is to be calculated based on his/her last drawn salary subject to the condition that it shall not include anything given to the employee in kind, in addition to allowances for housing, transport, travel, overtime, representation, children's education, recreation and social services. The said Article 134 reads as follows:

"Article (134)

(1) Without prejudice to the provisions of some laws regarding the granting of pensions and gratuities to employees of some establishments, the end of service gratuity shall be computed on the basis of last wage which the employee was entitled to, in respect of those drawing their salary per month, week or day, and on the basis of average daily wage stipulated in Article (57) in respect of those drawing their wages on piece work basis.

(2) The wage which is considered as basis for computation of the end of service gratuity shall not include anything given to the employee in kind, housing allowance, transport allowance, travel allowance, overtime allowance, representation allowance, cashier's allowance, children education allowance, recreation and social services allowance or any other allowances." Read more..

Saudi Arabia to start mandatory e-invoicing first phase on Dec. 4

Saudi Arabia will start implementing the mandatory application of the first phase of e-invoicing “fatoorah” on Saturday Dec. 4, Argaam reported.

An e-invoice, according to regulations, is a tax invoice that is issued electronically by each taxpayer subject to value-added tax in the Kingdom.

The first phase requirements consist of ensuring that there is a technical e-invoicing solution compatible with the relevant requirements. This means no handwritten invoices or invoices written through text editors or number analysis applications on computers.

A fine of SR5,000 ($1,332) will be applied for not issuing and saving the invoices electronically.

The fine for not including the QR Code in the e-invoice and not reporting any malfunction in the issuing of the e-invoice to the authority starts with a warning. The fine for violating the deletion or modification of e-invoice starts from SR10,000.

The second phase of e-invoicing will be implemented in a phased manner, starting from January 1, 2023, to establish integration between e-systems of taxpayers and the authority’s regulations, Argaam said. Read more..

Bahrain to double value-added tax from 5 to 10%

Bahrain's parliament has approved the doubling of value-added tax to 10 per cent, a member of parliament said on Wednesday.

The Parliament recognised the measure was "a critical pillar of the kingdom’s fiscal balance programme", Ahmed Al Salloom, member of parliament and chairman of the Financial and Economic Affairs Committee, said in a statement.

The VAT increase, expected to start next year, could contribute receipts of about 3 per cent of gross domestic product in the next few years, up from about 1.7 per cent this year, ratings agency S&P Global Ratings has estimated.

"The successful approval of the VAT increase by parliament is a critical milestone within our economic recovery plans and our aim of achieving a balanced budget by 2024," the ministry of finance said. Read more..

 

UAE Central Bank issues guidance for licensed exchange houses to combat money laundering

The UAE Central Bank issued guidelines to help licensed exchange houses to combat money laundering and the financing of terrorism.

The rules will assist in the effective enforcement of the statutory Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) obligations for licensed exchange houses and also help them to understand the risks associated with the same, the regulator said on Wednesday.

The guidance, which also takes Financial Action Task Force standards into account, came into effect on Wednesday. Licensed exchange houses have been given a month to comply.

“We want to ensure that all licensed exchange houses in the UAE understand their AML/CFT responsibilities, have adequate programmes to identify and mitigate AML/CFT risks in their operations and comply fully with their statutory obligations,” Central Bank Governor Khaled Balama said. Read more..

11 new commercial activities added to list of freelance professional license

The Department of Economic Development in Abu Dhabi has added 11 new commercial activities to the list of freelance professional license that allows individuals including citizens, residents, non-residents to conduct commercial activities from anywhere in the world. These activities are subject to the general regulations of the sole proprietor company.

The new activities added by the Department are related to accounting and auditing, analysing and reviewing accounting and auditing systems, Shariah review consultancy for the transactions of Islamic financial institutions, consultations in the fields of tax, electronic networks, electronic security, innovation and artificial intelligence, information technology network services, design and programming of electronic chips, as well as the design of database systems and electronic risk management services. Read more..

FTA begins implementing new procedures for applications requesting reconsideration and objections of decisions

The Federal Tax Authority (FTA) has announced that it is to begin implementing new procedures for tax registrants who apply to the Authority for a review of their decisions, commencing  (November 1, 2021).

 The procedures relate to tax registrants who apply for reconsideration of - or who submit objections to - the Authority’s decisions. They cover decisions made by the Tax Disputes Resolution Committee, challenge procedures, controls for paying by instalment, and the waiving of administrative penalties.

 The Authority asserted that any person has the right to submit a request to the Authority to reconsider any decision or part thereof, it issued in connection to him, provided that the request includes reasons and meets the prescribed conditions, within 40 business days from the date he was notified of the decision.

 The Authority will review the reconsideration request and issue a decision, giving their reasons within 40 business days from the date of receiving the application and informing the applicant of its decision within five business days from the date of issuance of the decision. Read more..

FTA to issue tax residency certificates

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.

The certificates were previously issued by the Ministry of Finance. The move, in coordination with the Ministry of Finance, is in line with Cabinet Decision No. 65 of 2020 on Fees for Services provided by the FTA issued in October 2020.

“Both tax residency and commercial activities certificates allow investors in the UAE, including companies and individuals, to benefit from double taxation avoidance agreements to which the state is a party, with the aim of preventing duplication, in addition to recovering VAT imposed on Emirati businesses in various countries in the event they were registered with the authority,” Khalid Ali Al Bustani, director-general of the FTA, said. Read more..

FTA amends law to avoid double VAT taxation on supply of goods in designated zones

The Federal Tax Authority (FTA) on Saturday announced that amendment on tax treatment for supply of goods in designated zones and connected shipping or delivery services to avoid VAT double taxation has come into effect as of October 30,2021.

In a statement, the FTA has confirmed the importance of Cabinet Decision No. (88) of 2021 to amend Article 51 of Cabinet Decision No. (52) of 2017 on the Executive Regulation of Federal Decree-Law No. (8) of 2017 on value-added tax (VAT), and said latest move aims to avoid VAT double taxation on supplied goods in the designated zones and facilitate procedures to non-resident suppliers operating in the designated zones, as these goods will be treated —under certain conditions — outside the scope of tax, hence, no tax registration is required from the supplier.

The Federal Tax Authority issued ‘Public Clarifications’ in relation to the Cabinet decision to amend Article 51, explaining the new amendment in the tax treatment for the supply of goods in designated zones and their connected shipping or delivery services, available on the authority’s website in an effort to raise tax awareness among business sectors and ensure the best tax compliance rates. Read more..

Amended laws on decriminalisation of bounced cheques to begin in January 2022

The UAE Central Bank, the Ministry of Economy and the Ministry of Justice have implemented amendments to the Commercial Transactions Law regarding the decriminalisation of bounced cheques.

Under the amendments, the regulator and the ministries introduced changes relating to the partial payment of cheques and toughened administrative penalties in cases when they are issued without funds, they said on Monday.

The amendments come into effect on January 2, 2022. They are in line with the Central Bank’s strategic initiatives and plans to upgrade banking laws and regulations to track developments in the financial sector, fill any legal gaps and deliver its vision to follow best practice internationally, said Central Bank governor Khaled Balama.

They will also help to promote commercial and banking transactions, streamline procedures for collecting the cheque’s value and make the use of cheques more flexible, the regulator and ministries said. Read more..

UAE to set out new law regulating charity giving and fundraising

A new law to tackle money laundering and terrorist financing is being developed by the UAE.

The legislation will govern how charitable donations are made and the way non-profit organisations operate, a senior official has said.

Nasser Ismail, assistant undersecretary at the Ministry of Community Development and a member of the National Committee for Countering Money Laundering, told state news agency Wam that non-profit organisations operating in the UAE “must exercise due diligence to avoid any wrongdoings related to money laundering”.

Mr Ismail referred to the “new federal law being formulated by the ministry, named the Fundraising Regulatory Law, which will stipulate a set of conditions and regulations for licensed charitable and humanitarian authorities within the UAE”.

There are already strict measures in place relating to fundraising. This means the public can donate only to charities that are licensed by the government. Read more..

 

 

UAE: FTA launches new services to ease VAT refund process for Emiratis building new residences

The Federal Tax Authority (FTA) has new services designed to help UAE nationals reclaim the Value-Added Tax (VAT) they incurred on their newly built residences with smooth and efficient procedures.

The new service offer four different services that aim to raise the target audience’s awareness, provide them with easy access to information, allow them to communicate directly with FTA representatives, receive their feedback, and constantly provide them with top-quality services that live up to their expectations.

The initiative will include a weekly interactive virtual workshop, the "Virtual Session", that brings UAE citizens eligible to benefit from the service with representatives of housing authorities in the UAE, as well as contractors, engineers, and construction experts to provide consultations and clarification about the VAT refund process. Read more..

 

Federal Tax Authority Adopts New Design for ‘Digital Tax Stamps’ Adhering to Best and Latest Standards

The Federal Tax Authority (FTA) has announced the adoption of new features for ‘Digital Tax Stamps’ to be placed on the packaging of cigarettes, electrically heated cigarettes, and waterpipe tobacco (known in Arabic as ‘Mu’assel’) circulated in local markets.

The new Stamps will replace the existing ones, which have been in circulation as of January 1, 2019, as per Cabinet Decision No. (42) of 2018 on Marking Tobacco and Tobacco Products, and in keeping with FTA Decision No. (3) of 2021, which will go into effect on October 1, 2021, formally adopting the newly redesigned ‘Digital Tax Stamps’.

The new decision specifies the Excise Goods that it targets, namely all types of cigarettes, including electrically heated cigarettes, as well as waterpipe tobacco (‘Mu’assel’).

 Moreover, the Decision specifies the dates for receiving orders of the Digital Tax Stamps with the new design, which include two categories. The Decision states that as of October 1, 2021, orders will be accepted for the first category of Stamps, where the Stamps with the red design will be placed on packaging of all types of cigarettes, while those with the purple design will be applied to the packaging of electrically heated cigarettes and waterpipe tobacco, which are authorised for trade in local markets and arrival halls at airports. The second category will open for orders as of January 1, 2022, where the Stamps with the green design would be placed on the packaging of all cigarettes, while those with a blue design would be applied to the packaging of electrically heated cigarettes and waterpipe tobacco, which are authorised for trade in duty-free shops in departure halls at airports. Read more..

Dubai issues law to integrate economic zones into a single body

Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, issued a law bringing Dubai’s economic zones under one umbrella, a move designed to further strengthen the emirate’s status as a global and regional investment hub.

The Dubai Airport Free Zone, Dubai Silicon Oasis and Dubai Commerce City will be supervised by the newly-created Dubai Integrated Economic Zones Authority, starting on January 1, 2022, the Dubai Media Office said in a statement on Monday.

The new authority will be chaired by Sheikh Ahmed bin Saeed Al Maktoum, and Mohammed Al Zarooni will be its chief executive, the statement added.

The creation of the integrated body is part of Dubai’s efforts to introduce frameworks for “further improving services provided to businesses and investors, which in turn will help accelerate economic growth”, Sheikh Mohammed said in the statement. Read more..

UAE Central Bank issues new anti-money laundering guidelines

The Central Bank of the UAE has issued new guidance to help financial institutions combat money laundering and terrorism financing.

It says licensed financial institutions (LFIs) including lenders are obliged to develop internal policies, controls and procedures to manage risks linked to money laundering and the financing of terrorism.

LFIs must also put in place indicators to identify suspicious transactions and activities and file reports to the UAE’s Financial Intelligence Unit, the banking regulator said in a statement on Monday.

“As we continue to enhance the effectiveness of AML/CFT measures to safeguard the UAE financial system, we expect licensed financial institutions to fulfill their duties as well,” Khaled Balama, governor of the CBUAE, said.

“This guidance serves as a key point of reference for licensed financial institutions to ensure their compliance with AML/CFT requirements.” Read more..

UAE tax authority offers 30% reduction on unpaid penalties

Tax law violators in the UAE can benefit from a 30 per cent reduction on unpaid penalties as per a recent Cabinet decision, the Federal Tax Authority (FTA) said on Tuesday.

The FTA said the liberal move would boost the UAE’s global business competitiveness by establishing a tax legislation environment that encourages self-compliance and offers significant support to the national economy.

The Cabinet Decision No. 49 of 2021 on Amending Provisions of Cabinet Decision No. 40 of 2017 outlines 16 types of administrative penalties that have either been reduced or had the method of calculation amended. The amendments include administrative violations related to the application of Federal Law No. 7 of 2017 on Tax Procedures, Federal Decree-Law No. 7 of 2017 on Excise Tax, and Federal Decree-Law No. 8 of 2017 on Value Added Tax.

As part of its ongoing awareness-raising efforts, the FTA launched an awareness campaign last May. The FTA’s representatives communicated with the business sector to introduce the mechanism for implementing the new decision, the facilities it offers registrants, how to benefit from these facilities, and the conditions required to benefit from the redetermination of administrative penalties imposed on registrants to equal 30 per cent of the total unpaid penalties. Read more..

Saudi Arabia prepares rollout of e-invoicing scheme that could address ‘shadow economy’

The first phase of Saudi Arabia’s e-invoicing project, Fatoorah, is set to be effective in less than three months, according to Zakat, Tax and Customs Authority (ZATCA).

The project is seen as having major benefits for the Saudi economy, including addressing commercial concealment and the “shadow economy,” which costs the Kingdom up to SR400 billion ($107 billion) annually.

Under the new regulation, buyers and sellers will have a digitized system that allows the smooth exchange and processing of invoices, credit notes, and debit notes.

“It is expected that the project will have a tangible impact on the national economy by curtailing the shadow economy and tackling commercial concealment,” Saudi financial analyst Talat Zaki Hafiz said. Read more..

 

Dubai sets up specialised court to combat money laundering

Dubai Courts on Sunday announced the establishment of a specialised court, focused on combating money laundering, within the Court of First Instance and Court of Appeal.

The move, under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, is in line with the UAE leadership’s vision to strengthen the integrity of the financial system. It follows the establishment of the Executive Office of the Anti-Money Laundering & Countering the Financing of Terrorism (AML/CFT) by Sheikh Mohammed to oversee the implementation of the UAE’s National AML/CFT Strategy and National Action Plan (NAP). The Executive Office reports to the UAE’s Higher Committee overseeing the implementation of the country’s National AML/CFT Strategy chaired by Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs and International Cooperation.

The new court will support Dubai’s efforts to tackle financial crimes, including money laundering, as part of the UAE’s wider endeavour to combat crime. Read more..

MoE steps up AML drive, imposes fines on non-compliant firms

The Ministry of Economy (MoE) said on Tuesday that more than 80 per cent of the targeted Designated Non-Financial Businesses and Professions (DNFBPs) establishments have complied with the International Financial Action Task Force rules, while the rest 20 per cent or 3,083 non-compliant firms have been imposed fines of Dh50,000 each.

Addressing a press conference, Mohamed Al Janahi, head of Anti Money Laundering (AML) Supervision Section at the ministry, said the MoE’s efforts are directed towards meeting compliance in two main areas, which include the regulation and supervision of the DNFBPs to ensure they meet the legal requirements. The ministry oversees four main business activities including real estate agents and brokers, precious metals and gemstone dealers, auditors, and corporate service providers. A total of 15,000 establishments are operating within these activities and are under the supervision of the Ministry.

Al Janahi said the second aspect is obtaining the Ultimate Beneficial Owner (UBO) data from all private sector establishments within the country, including the non-financial free zones. Read more..

New guidance to registered hawala providers and licenced financial institutions

The Central Bank of the UAE (CBUAE) has issued a new guidance on anti-money laundering and combatting the financing of terrorism (AML/CFT) to registered hawala providers (RHP) and licenced financial institutions (LFIs) providing services to RHP.

The new guidance, which came into effect on August 18, 2021, will assist in the understanding and effective implementation of the statutory AML/CFT obligations for RHPs and LFIs, as outlined in Federal Decree-Law No. (20) of 2018 on AML/CFT and Cabinet Decision No. (10) of 2019. This guidance also takes Financial Action Task Force (FATF) standards and guidance into account.

The Central Bank of the UAE permits legitimate hawala activity, being considered an important element in its continuous efforts to boost financial inclusion and bring the unbanked segment of the population into the regulated financial system.

Hawala is regulated by the Registered Hawala Providers Regulation issued by the CBUAE in 2019. All providers undertaking hawala activity in the UAE must hold a hawala provider certificate issued by the Central Bank. Read more..

UAE Central Bank issues new guidelines on implementing sanctions

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..

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

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

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

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

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

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..

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 reduces penalties for violating tax laws

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..

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

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..

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

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..

 

UAE tax rules relaxed, penalties reduced

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

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

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

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

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

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

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..

Oman to start implementing VAT from April 16

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

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

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

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

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..

Oman expects 300m rials VAT revenue in 2021

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 authorities clarify which cars are exempt from VAT

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..

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

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..

 

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

“... 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

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..

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

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

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

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

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..

Oman to implement 5 per cent VAT

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..

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

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..

Higher educational institutions can claim VAT refund

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..

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

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..

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

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..

Saudi Arabian government to bear VAT on some of the services

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: 15% VAT hike comes into effect

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 expands VAT refund kiosks to major malls, hotels

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. Read more..

VAT exemptions for schools in UAE: FTA releases circular

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..

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..

Now, VAT for UAE ads on Facebook

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..

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

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 common mistakes made by SMEs on VAT filings in UAE

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..

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

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. 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...

 

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...

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...

Food delivery? VAT compliance should be on the menu

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

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...

 

Are free zones in a bind?

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

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...

 

 

UAE's VAT taxpayers can appoint agents via government website

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

 

 

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