Welcome to our May edition, bringing you recent tax news and developments in the GCC and internationally.
KPMG: Global Covid-19 related tax developments
- KPMG's daily update on global tax developments in response to Covid-19
- Across the KPMG Global Tax & Legal Network, our leaders have put forward tax and legal considerations for affected businesses
- An overview of jurisdictional tax measures and government relief measures, as reported by KPMG member firms in response to Covid-19
- KPMG Global Tax and Legal’s summary of Covid-19-related reading with mini-series podcasts
1) KSA: Breaking news on VAT
At the time of publication, the Kingdom of Saudi Arabia (KSA) authorities announced an increase in the rate of VAT from 5% to 15%, effective 1 July 2020. We will comment on the details of the proposal and its implications once they become available.
2) UAE: Ministry of Finance provides further guidance on Economic Substance Regulations
UAE introduced Economic Substance (ES) Regulations applicable for financial years starting from 1 January 2019. All relevant UAE entities must file ES Notifications by latest 30 June 2020. The Ministry of Finance continues to clarify the application of ES and the Relevant Activity Guide (RAG) was released on 15 April 2020. Please find more information here.
3) UAE: Implementation of customs duty refund under Dubai Government’s economic stimulus package
As part of implementing customs-related incentives under the economic stimulus package announced by the Dubai Government, Dubai Customs recently explained the eligibility and process for the customs duty refund. Additional information may be found here.
4) UAE: Extension of due date for filing March 2020 VAT returns and payment
In a move designed to help affected businesses navigate the financial and administrative impact of Covid-19, following the deferral of excise tax filings and payments, the Federal Tax Authority (FTA) has extended the due date for filing the VAT return and payment of VAT. This is applicable to the tax period ending 31 March 2020 (monthly or quarterly) by one month, from 28 April 2020 to 28 May 2020. Please find additional information here.
5) UAE: UAE Cabinet approves 100% foreign ownership rules for all 122 economic sectors
The UAE Cabinet passed Cabinet Resolution No. 16 of 2020 on 17 March 2020, concerning determination of the ‘Positive List’ of economic sectors and activities eligible for foreign direct investment (FDI).
It has been clarified that companies falling under the remit of all economic sectors listed in the Positive List across three broad sectors – Agriculture (19 activities), Manufacturing (51 activities), and Services (52 activities) – are eligible for 100% foreign ownership in mainland UAE. Further, the Resolution sets out the requirements and conditions that companies would be required to meet (apart from minimum capital requirements). These include conditions pertaining to investment in modern technologies, contribution to research and development, and employee headcount, as well as the need to obtain specific approvals and fulfill requirements for certain licensed activities. Additional information is available here.
6) KSA: VAT measures to support taxpayers during the Covid-19 Pandemic
As part of the Saudi Arabian Government’s efforts to mitigate the impact of Covid-19 on taxpayers, the General Authority for Zakat and Tax (GAZT) has announced multiple initiatives effective from 18 March 2020:
- Postponing the due date for submitting VAT returns and payment of VAT liabilities
- Payment of VAT due
- Postponing the payment of VAT on the importation of goods
- Suspending the application of fines and penalties from 18 March to 30 June 2020
- Additional measures
Additional information is available here (PDF 188 KB)
7) Qatar: customs measures in response to Covid-19
The General Authority of Customs (the GAC) has exempted food and medical commodities from customs duties for a period of six months, effective 23 March 2020.
The GAC has implemented this directive by suspending customs duties for 905 listed items at Al Nadeebe customs clearance system. These included basic food items and select medical equipment and tools. Please click here for a list of exempted items.
8) Bahrain: NBR launches Covid-19 impact assessment survey for Bahraini businesses
The National Bureau for Revenue (NBR) has designed and rolled out a business survey with the objective of understanding the impact of Covid-19 on Bahraini businesses and their short-term expectations. As per the NBR, this will assist them in designing measures to address the effect of the outbreak. Please see here (PDF 179 KB)
Upcoming KPMG events
Topic: Tax impact of new Oman Tax Authority structure, international tax reforms and indirect tax measures in Oman
Date and time: Wednesday, June 3, 2020 11:00 am Arabian Time (Abu Dhabi, Muscat, GMT+04:00)
Duration: 1 hour
Please register here.