Welcome to the May edition of our tax newsletter, bringing you news on global and regional tax developments. 

International updates

European Commission communication on “Business Taxation for the 21st century”

On 18 May 2021, the European Commission unveiled its Communication on “Business Taxation for the 21st Century” (the Communication). The document sets out the Commission’s views on the EU’s tax policy agenda and plans for the implementation of the rules to be agreed upon at an international level under the OECD’s BEPS 2.0 project. The Communication also mentions targeted solutions that go beyond the OECD agreement, in the form of five action points, that are meant to support the EU’s ambition for a holistic EU business tax framework.

Read a March 2021 report on the subject prepared by KPMG’s EU Tax Centre here (PDF 166 KB).

KPMG report: Country-by-country reporting notification requirements per country

Under the OECD model for legislation for country-by-country (CbC) reporting, group entities must file a notification about the reporting entity before the end of the reporting fiscal year.

The KPMG member firm in the Netherlands has prepared a report providing an overview of the CbC notification requirements for all countries that have implemented final CbC reporting legislation from 2016 to 2021.

Read the KPMG CbC reporting notification overview here (PDF 530 KB).

GCC updates

The United Arab Emirates (UAE)

100% foreign ownership news

The UAE Ministry of Economy announced that the amended Commercial Company Law (the Law), which includes 100% foreign ownership, will be effective from 1 June 2021.

The Law will enable companies to apply for a business license without the requirement of a UAE national as partner in the company. The new law will enable the UAE to enhance its status as an investment destination and boost the country’s competitive edge. 

E-commerce personal consignment customs clearance

Dubai Customs Notice no. 09/2021 (the Notice) relates to the import of personal goods via e-commerce transactions. The Notice applies to both free zone and local companies and entered into force on 16 May 2021. The Tariff and Origin Department at Dubai Customs is responsible for resolving any disputes concerning implementation.

The Notice will be applicable to the import/export of personal goods, i.e. "Goods for personal use” whose value does not exceed AED 10,000 being imported/exported for individuals via companies."

For more details, see the full KPMG tax flash here.

Dubai Customs Implementation of the TIR Carnet

Dubai Customs issued Policy No. 52/2021, dated 5 May 2021, announcing the implementation steps of the TIR Carnet (International Road Transport) with the aim of facilitating the movement of goods within the GCC. This policy enters into effect on 1 June 2021. 

For more details, see the full KPMG tax flash here.

Revision to the tax penalty regime in the UAE

Cabinet Resolution No. (49) of 2021 (the Resolution) has been announced to revise the administrative penalties imposed for violations of tax laws in the UAE. The Resolution is expected to become effective after 60 days from the date of publication, i.e. from 27 June 2021.The key change seems to be that late payment penalties have been revised, whereby the 1% daily penalty has been replaced with a 4% monthly penalty, with a cap of 300%.

For more details, see the full KPMG tax flash here.

Business Visitors Refund Scheme

The UAE Federal Tax Authority (FTA) recently released an updated version of the Refund Guide for Business Visitors. The Guide covers specific circumstances whereby non-UAE resident businesses are entitled to claim a VAT refund on expenses incurred in the UAE.

For more details, see the full KPMG tax flash here.

Kingdom of Saudi Arabia (KSA)

Merger of GAZT and GAC

On 4 May 2021, the Saudi Council of Ministers, chaired by King Salman bin Abdulaziz, approved the merging of the General Authority of Zakat and Tax (GAZT) and the General Authority of Customs (GAC) to form the Zakat, Tax and Customs Authority (ZTCA).

For more details, see the full KPMG tax flash here

Bahrain

New filing requirement for economic substance returns

The Ministry of Industry, Commerce and Tourism has recently sent a notification that the Economic Substance return filing (in addition to FATCA and CRS reporting) is to now be done through the National Bureau of Revenue (NBR). The NBR has launched a new International Tax Information Exchange System (ITIES) portal for this.

For more details, see the full KPMG tax flash here (PDF 100 KB).

FAQs on the recently introduced country-by-country reporting (CbCR) requirements by the Kingdom of Bahrain

Experts at KPMG’s Tax and Corporate Services team have prepared a list of FAQs regarding the recently introduced CbCR requirements.

For more details, see the full KPMG tax flash here (PDF 157 KB).