Welcome to the February edition of our tax newsletter, bringing you news on global and regional tax developments.
EU: Status of proposal for public country-by-country reporting
The European Commission’s proposal for public country-by-country (CbC) reporting, under consideration since 2016, would require multinational groups exceeding a certain revenue threshold to report information on activities, number of employees, net turnover, profit or loss before tax, tax accrued and paid, among others.
The proposal has been in deadlock, due to disagreements regarding its legal basis, which determines whether the proposal should be subject to the ordinary legislative procedure, which is the common procedure used in tax matters and subject to unanimous approval at Council level.
Read a February 2021 report prepared by KPMG’s EU Tax Centre here.
India: Transfer pricing measures in Union Budget
On 1 February 2021, the Finance Minister of India presented the Union Budget 2021-22.
Among the tax measures related to transfer pricing in the budget, changes to the length of time for assessment procedures are proposed. The period of time for completing assessment proceedings involving transfer pricing referrals would be reduced from 24 months to 21 months, measured from the end of the assessment year. Consequently, the period of time for completing transfer pricing assessment proceedings would also be reduced from 22 months to 19 months.
Find the detailed KPMG Global view of the guidance here (PDF 1.11 MB)
The United Arab Emirates (UAE)
EFTA goods exemption from customs duties in the GCC
Dubai Customs retroactively announced the duty exemption of a new list of goods referred to as “Category B” in the agreement between GCC States and the European Free Trade Association (EFTA) (the Agreement). EFTA countries comprise Switzerland, Norway, Liechtenstein, and Iceland. The effective date of duty exemption benefit for “Category B” goods is 1 July 2020.
Implications of the Agreement include:
- GCC-based businesses and consumers could witness a reduction in the prices of “Category B” goods
- Businesses can review their pricing policies and supply options in order to benefit from this recent exemption
- Businesses who paid duties for Category B products imported into the GCC after 1 July 2020 may request a refund of said duties
For more details, see the full KPMG tax flash here.
Dubai Customs adopts new amendments to tariff codes
After the decision of the GCC Commission for Financial and Economic Cooperation on 25 October 2020, amendments to the GCC Unified Customs Tariff came into effect on 1 January 2021. Dubai Customs adopted these amendments through Dubai Customs Notice 2/2021.
The amendments include modifications to the “Description” column of two tariff codes, four newly created tariff code headings, and 65 changes to existing tariff code sub-headings.
Importers and exporters must review the tariff classification of their products to ensure that they are in line with the new version of the tariff codes. They should also consider updating their commodity codes databases to reflect these amendments.
For more details, see the full KPMG tax flash here.
Economic Substance Reporting deadline on 31 March 2021
The Ministry of Industry, Commerce and Tourism (MoICT) and the Central Bank of Bahrain (CBB) issued Directive OG/499/2018 (CBB Directive) on 22 November 2018 and a Ministerial Decision no. 106 (MO 106) on 27 December 2018 (collectively ‘Economic Substance Rules’ or ‘ESR’), imposing substance requirements for Bahraini entities undertaking geographically mobile activities in, from or through Bahrain.
For more details, see the full KPMG tax flash here (PDF 163 KB)
Qatar corporate tax filing 2020
In September 2020, the General Tax Authority (GTA) introduced the new online tax portal “Dhareeba”, which follows a holistic approach for filing income tax returns and various other declarations and reports electronically.
The GTA has not granted a tax filing extension as of today, therefore the deadline for companies with 31 December 2020 as year-end will be 30 April 2021. Article 30 of the executive regulations of the Income Tax Law No. 24 of 2018 states that the GTA may grant an extension for the deadline to file tax returns for a period of up to four months. Extension applications for the returns with a submission deadline of 30 April 2021 must be submitted to the GTA before 28 February 2021.
For more details, see the full KPMG tax flash here (PDF 147 KB)
Filing of transfer pricing declaration on Dhareeba
One of the key pre-requisites to submit an income tax return on Dhareeba, is the filing of a declaration of related party transactions under the “Statement of Transfer Pricing” (TP Declaration), where applicable, along with the income tax return.
The GTA has verbally confirmed that the TP Declaration needs to be filed in case the taxpayer has “total value of assets” or “total revenue” exceeding the thresholds determined by the GTA (expected to be QAR 10 million).
For more details, see the full KPMG tax flash here (PDF 47.5 KB)
Oman-Sri Lanka tax treaty comes into force
Oman and Sri Lanka signed a tax treaty on 15 August 2018. The tax treaty has now entered into force, following the completion of ratification by both countries. We understand that the treaty would apply from 1 January 2021.