KPMG Tax Newsletter - January
KPMG Tax Newsletter - January
Welcome to the January 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 January issue, we cover GCC tax updates, international tax developments and our upcoming event.
1) UAE Economic Substance Regulations update
Implementation of Economic Substance Regulations (‘ESR’ or ‘the Regulations’) in the UAE is in progress and notifications by all relevant UAE entities are due from 1 January 2020.
Please refer to a separate tax alert here.
2) UAE: DMCC introduced new rules and regulations to increase ease of doing business
Dubai Multi Commodities Centre Authority (DMCC) has announced a set of new rules and regulations to further improve the ease of setting up and doing business in DMCC. These rules and regulations will become effective from 2 January 2020.
The new regulations update DMCC’s existing company law framework, with key enhancements to the framework including, increased flexibility around a company’s articles of association; introduction of different share types, allowing businesses to tailor the structure of shareholdings; introduction of new dormant status; and an increased ability to transfer company incorporation into DMCC.
Oman recently signed the multilateral convention on mutual administrative assistance in tax matters under the common reporting standard regime. The convention provides all forms of administrative assistance in tax matters including automatic exchange of information, exchange of information on request, and simultaneous tax examinations.
The first exchange is expected to take place by September 2020, and signing of the documents is expected to help Oman be removed from the European Union “blacklist.”
4) Oman: Budget for 2020 revealed
Oman revealed its 2020 budget on 1 January 2020. Total spending is budgeted at OMR 13.2 billion (USD 34.3 billion), an increase of 2% against the previous year’s budget. Revenues are estimated to grow by 6% to OMR 10.7 billion (USD 27.8 billion), leaving a budget deficit of OMR 2.5 billion (USD 6.5 billion). The deficit is 8% of the GDP for 2020, which is targeted to grow by 3%.
Please click here (PDF 264 KB)for our detailed analyses of the budget.
5) Oman: Withholding tax (WHT) on payments made by Oman branch to foreign head offices
Under the Oman tax law, specified foreign payments made to foreign persons by the taxpayer are subject to WHT at 10% on gross basis in Oman. It is important to note that where Omani branches (the taxpayers) make a specified payment to their head office such as royalties, management fees or service fees, then such payments are subject to WHT in Oman.
Recently, the Oman tax authorities have clarified that Omani branches making payments in the nature of head office expenses recharged to their foreign head offices, which constitute income of the head office and fall within the specified categories, are obliged to withhold tax in Oman.
6) Qatar: Executive Regulations to the New Tax Law (PDF 240 KB) published
Qatar published new Executive Regulations (ERs) to the Income Tax Law No 24 of 2018 (the New Tax Law) in the official Gazette on 11 December 2019, repealing previous ERs. The new ERs have provided clarifications on the applications of the New Tax Law in the following areas:
- Additional supplementary guidelines on Permanent Establishment
- Transfer pricing requirements
- Clarity on applicability of withholding tax (WHT) and WHT refund process
- Taxation of subsidiaries and associates of listed entities
- Non-deductible expenses
- Fixed assets
- Timeline for tax registration
- Mergers and demergers
The effective date of the new Executive Regulations is 12 December 2019.
International tax updates
Turkey has published the digital services tax provisions in the Official Gazette on 7 December 2019. The effective date of the digital services tax is March 2020, measured from the beginning of the third month following the date of publication of the provisions in the Official Gazette. The digital services tax will be imposed at a rate of 7.5% on Turkish revenues.
On 23 December 2019, the Organization for Economic Cooperation and Development (OECD) has announced guidance for use by tax administrations and multinational enterprise (MNE) groups regarding Country-by-Country Reporting (CbCR) pursuant to base erosion and profit shifting (BEPS) Action 13. The new guidance clarifies that, under the BEPS Action 13 minimum standard, the automatic exchange of CbC reports filed under local filing rules is not intended.
KPMG Digital Economy Tax Tracker is a useful finance tool that provides users with the latest news and insights on global tax regulations.
The app covers BEPS 2.0, digital services tax, and VAT/GST developments across 63 countries. The KPMG Digital Economy Tax Tracker app is free of charge and can be downloaded from the App Store or Google Play.
KPMG global indirect tax services webcast
Thursday 16 January 2020
We are pleased to invite you to the first in a series of Global Indirect Tax Services (GITS) webcasts. This session will provide an opportunity to explore worldwide changes, trends, and the future direction of indirect taxes through 2025. The goal of our first webcast is to enable your business to set strategies and be better prepared to deal with changes as they arise. You will also gain a better understanding of how your own jurisdictions are leading or following indirect tax trends.
Presenter: Lachlan Wolfers, Global Head of Indirect Taxes, KPMG International
Clicking the link above will enable you to register for this and other upcoming webcasts and provide you with login details. Each session will last approximately 60 minutes. After the webcast, you will receive supporting materials and speakers’ contact details. Should you have any questions please let us know. We look forward to your participation.