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

International updates

OECD: Statement of Inclusive Framework on two-pillar solution addressing tax challenges of digital economy

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) has recently released a statement concerning a two-pillar solution to address the tax challenges arising from the digitalisation of the economy.

According to the OECD statement, 130 member jurisdictions have agreed to a detailed implementation plan together with remaining issues to be finalised by October 2021.

The agreement indicates the Inclusive Framework members aim for “a robust global minimum tax” with limited impact on multinational entities (MNEs) carrying out real economic activities with substance. 

For more details, see the full KPMG tax flash here

KPMG report: OECD/G20 Inclusive Framework agreement on BEPS 2.0

On 1 July 2021, in a historic agreement, 130 countries approved a statement providing a framework for reform of international tax rules. These countries are members of the OECD/G20 Inclusive Framework on BEPS. The statement sets forth the key terms for an agreement of a two-pillar approach to reforms and calls for a comprehensive agreement by the October 2021 G20 Finance Ministers and Central Bank Governors meeting, with changes coming into effect in 2023. 

Read initial impressions and observations about the IF statement in a July 2021 report prepared by KPMG.

For more details, see the full KPMG tax flash here

G20 Finance Ministers conclude meeting with agreement for global minimum tax

The G20 Finance Ministers and Central Bank Governors issued a communique following their third official meeting on 9 and 10 July 2021 in Venice.

This third meeting concluded with an agreement:

  • For a more stable and fairer international tax architecture with an endorsement of key components of the two pillars on the reallocation of profits of multinational enterprises and an effective global minimum tax.
  • For the OECD/G20 Inclusive Framework on base erosion and profit sharing (BEPS) to finalize the design elements within the agreed framework together with a detailed plan for the implementation of the two pillars by their next meeting in October 2021.
  • For a “menu” of policy options on digital transformation and productivity recovery with policies and good practices to make better use of the opportunities of digitalization.
  • To address climate change with a closer international coordination on climate action.

For more details, see the full KPMG tax flash here

GCC updates

The United Arab Emirates (UAE)

Dubai Customs Notice no. 10/2021-Anti-dumping duties payment procedures

Dubai Customs released Notice no. 10/2021 on the payment of definitive anti-dumping duties against GCC imports of ceramic flags and paving, hearth, floor, or wall tiles originating in or exported from India and China on 6th July 2021. It came into force on 1 July 2021.

Companies importing ceramic flags and paving, hearth, floor, or wall tiles originating in or exported from India and China are required to fill in the declaration and undertaking form, which will specify the amount of anti-dumping duties payable.

The duties are based on the percentages on the CIF value indicated on originating or exporting companies by the Ministry of Economy’s circular 1/2020 (between 23.5% and 106%). The undertaking form must be submitted at the time of customs clearance, and anti-dumping duties are payable through customs systems.

For more details, see the full KPMG tax flash here

Saudi Arabia

Saudi Arabia introduces new national rules of origin

The Saudi Minister of Finance and Chairman of the Zakat, Tax and Customs Authority (ZATCA) approved Ministerial Decision No.3852, which introduces the new national rules of origin (the rules) that determine the conditions to be met for goods imported into Saudi to qualify for GCC preferential treatment based on the GCC Unified Economic Agreement. The rules have come into effect on 2 July 2021, the date of their publication in the official gazette.

For more details, see the full KPMG tax flash here

Oman

Tax Treaty between Oman and Qatar to be Signed

The Shura Council of Oman (Majlis Al-shura) authorized the signing of an income and capital tax treaty with Qatar on 14 July 2021. The Qatari Cabinet reportedly approved the signing of an income tax treaty with Oman on 28 April 2021. The treaty will be the first of its kind between the two countries and must be signed and ratified before entering into force.

For more details, click here.

Oman suspends Country-by-Country (CbC) report filing requirement until further notice

On 7 July 2021, the Oman Tax Authority (OTA) announced the suspension of the requirement to file a CbC report with the OTA until further notice.

Subsequently, the OTA issued an alert on 14 July 2021 clarifying that the above suspension is applicable only to those qualifying Multinational Enterprise (MNE) Groups with an Ultimate Parent Entity (UPE) resident outside Oman. Qualifying MNE Groups’ with an Oman-based UPE are still required to file the CbC report in Oman for the reporting fiscal year 2020 on or before 31 December 2021.

Further, the alert explicitly clarified that the CbC notification requirement for Reporting Fiscal Year 2021 continues to remain applicable for all covered tax resident entities in Oman and is due for submission on or before 31 December 2021. 

For more details, see the full KPMG tax flashes here and here.

Get in touch

Abdulaziz Alnaim

Acting Head of Tax, Saudi Arabia

E: aalnaim@kpmg.com

Stuart Cioccarelli

Head of Tax, Lower Gulf 

E: scioccarelli@kpmg.com