Welcome to the December edition of our Tax Newsletter, bringing you recent news and developments. Countries continue to reform their tax systems with the goal of becoming more globally competitive. While striving to meet international standards, it is more important than ever to keep up with trends and developments. In our December issue, we cover GCC tax updates and international tax developments.
1) UAE: MoF has released CbCR Notification Portal
The UAE’s MoF has released a CbCR Notification Portal in recent days. The CbCR notification needs to be submitted before 31 December 2019 for multinational enterprises (MNE) with a fiscal year ending 31 December 2019. It is applicable for:
2) Oman implements international tax reforms
On 26 November 2019, Oman signed the Multilateral Convention (MLI) to Implement Tax Treaty Related Measures to prevent Base Erosion and Profit Shifting (BEPS). This step marks an important milestone in Oman’s commitment to tackle tax treaty abuse, improve the coherence of international tax rules and ensure a more transparent tax environment.
To date, Oman has double tax treaties with 35 jurisdictions. Oman submitted a list of 34 treaties to be designated as CTAs (the tax treaty with India is currently excluded). Oman has also provided its draft list of reservations and notifications (MLI positions), which may be subject to change upon ratification of the MLI. The specific change in Oman’s tax treaty with a particular jurisdiction is also dependent on counterparty jurisdictions signing the MLI and their status on the MLI positions.
Oman had committed to implementing Common Reporting Standard (CRS) regulations to enable automatic exchange of financial information with other jurisdictions. Earlier this year, banks and other financial institutions had been mandated by the Central Bank of Oman to ensure collection of CRS-related information for new account holders effective from 1 July 2019. Consequent to this, Oman, the 107th jurisdiction, has now signed up to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Convention) and Multilateral Competent Authority Agreement on Automatic Exchange of Information Agreement (CRS MCCA), international frameworks to enable automatic exchange of financial information on a reciprocal basis with other jurisdictions.
It is expected that the first set of exchanges by Oman will be done by September 2020. We further expect that Oman’s local legislation allowing specified institutions to undertake CRS compliances with designated authorities will be available soon. The signing of the Convention and the MCCA should assist Oman to be excluded from the current European Union blacklist.
The Kingdom of Saudi Arabia (KSA) has amended the Excise Tax Law to include sweetened beverages as products that will be subject to a 50% excise levy. According to the Circular, the excise tax on sugar sweetened beverages will come into effect from 1 December 2019. So far, there are no signs that this deadline will be further postponed, so there are only a handful of days left to finalize the preparation for the tax going live.
4) Treaty between Egypt and the UAE signed
On 14 November 2019, Egypt and the UAE signed an income tax treaty in Abu Dhabi. Once in force and effective, the new treaty will replace the Egypt - United Arab Emirates Income Tax Treaty (1994). Further developments will be reported as they occur.
1) Cayman Islands: Updates to CbC Reporting and Economic Substance Rules
The Cayman Islands governmental agencies provided an industry update concerning changes to the CbC Reporting and economic substance returns.
The OECD released a public consultation document on the global anti-base erosion proposal (Pillar Two) as part of its work to address the tax challenges of digitalization of the economy.
The OECD has announced the release of eight peer-reviewed reports assessing compliance with the international standard on transparency and exchange of information on request.
Among the eight peer reviews, seven jurisdictions – Andorra, Curacao, the Dominican Republic, Marshall Islands, Samoa, the United Arab Emirates and Saudi Arabia – have been rated as “largely compliant”.
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