AURIFER MIDDLE EAST TAX

G C C TA X U P D AT E W E B I N A R

Dubai (UAE)
18 January 2021
Agenda
1. Economic Substance Regulations 5. Customs updates

2. Transfer Pricing updates 6. Other updates

3. Direct and International tax 7. Looking forward to 2021

4. VAT Updates in the GCC

‣ KSA VAT Updates
‣ UAE VAT Updates
‣ Bahrain VAT Updates
‣ Oman VAT Updates
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E C O N O M I C S U B S TA N C E R E G U L AT I O N S
Economic substance
regulations
BAH and the UAE were removed from the
EU's blacklist in 2019.

REASON FOR INTRODUCTION

UAE and BAH in OECD’s list of Uncooperative Tax Havens

BEPS Action 5 - UAE and BAH are IF members

UAE and BAH put on EU blacklist of non-cooperative jurisdictions

To resolve issues identified by EU Code of Conduct Group (COGC) in areas of tax

! transparency

E C O N O M I C S U B S TA N C E R E G U L AT I O N S
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 Economic substance
regulations

ESR IN UAE AND BAHRAIN

2018 2019 2020 2021
UAE issued ESR Regulations on 30 Postponement of 31 Dec deadline
Bahrain issued ESR
April 2019 and Guidance on the to January 31 2021 for re-
Resolution - enters into UAE cancels previous law and issues
application of the Regulations on 11 submission of notification and
effect on 1 January 2019. Cabinet Resolution No. 57 of 2020.

September 2019. submission of report for FY 2019 in

UAE.
UAE issues guidance on ESR in
Decision No. 100 of 2020.
Bahrain and UAE removed from EU
blacklist in 2019. Filing deadlines for FY 2020 due in
Bahrain and UAE.

First filing deadline for UAE in June

2020 for notification.

First filing deadline for Bahrain on

31 March 2020.
First filing deadline for UAE for FY
2019 set to Dec 2020 for
resubmission of notification and
E C O N O M I C S U B S TA N C E R E G U L AT I O N S
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submission of report.
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Economic substance
Notification resubmission
regulations and report submission for
FY 2019

UAE REPORTING DEADINES

Financial Year Ending Notification Deadline Report Deadline
31 Dec 2019 31 Dec 2020 31 Jan 2021 31 Dec 2020 31 Jan 2021
31 Jan 2020 31 Dec 2020 31 Jan 2021 31 Jan 2021
28 Feb 2020 31 Dec 2020 31 Jan 2021 28 Feb 2021
31 Mar 2020 31 Dec 2020 31 Jan 2021 31 Mar 2021
30 Apr 2020 31 Dec 2020 31 Jan 2021 30 Apr 2021
31 May 2020 31 Dec 2020 31 Jan 2021 31 May 2021
30 June 2020 31 Dec 2020 31 Jan 2021 30 June 2021
31 Jul 2020 31 Jan 2021 31 Jul 2021
31 Aug 2020 28 Feb 2021 31 Aug 2021
30 Sep 2020 31 Mar 2021 30 Sep 2021
E C O N O M I C S U B S TA N C E R E G U L AT I O N S
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Economic substance
regulations Unknown what drove
amendments

CHANGES IN UAE RESPONSE - NEW LAW

Same spirit, different process
• Rip and replace ESR Laws
• Spirit conserved (9 Relevant Activities, CIGA, …)
• No transitional provisions for old law
• Important process impacts - The Federal Tax Authority ("FTA") has
become the authority overseeing compliance and control with the ESR;
• Diminished power Regulatory Authorities
• Includes CbCr definitions…
• New definition of a "Licensee"
E C O N O M I C S U B S TA N C E R E G U L AT I O N S
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Economic substance
regulations Unknown what drove
amendments

CHANGES IN UAE RESPONSE - NEW LAW

Same spirit, different process (contd.)
• Includes new definitions of relevant activities (Distribution and service
centers and High-rsik IP Business)
• More extensive exceptions to the scope of the ESR (exemptions);
• Different treatment of branches (of both UAE and foreign businesses);
• Notifications/reports to be submitted through the electronic portal;
• Resubmission of notifications submitted for 2019;
• Penalty framework is replaced
E C O N O M I C S U B S TA N C E R E G U L AT I O N S
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Economic substance
regulations

COMPLIANCE REQUIREMENTS
UAE Bahrain
• An entity carrying out a relevant activity deriving income • An entity carrying out a relevant activity and
Entities in unless exempt
deriving income
scope • Representative office (service center), distributors
(distribution center) may be in scope of ESR
• Entities falling in scope must notify within 6 months from • Entities falling in scope must perform the
the end of financial year
economic substance test

Reporting • Perform the economic substance test if applicable

• File ESR report before the end of 3 months from
Obligations • ESR report, if applicable, before the end of 12 months the financial year-end

from the financial year-end

• Report to be submitted to MOICT (for non financial
• Notification and report via MOF portal entities)
• Not submitting notification: AED 20,000
• Sanctions include: warnings, suspension of CR,
Penalties • Not meeting EST or incorrect info: AED 50,000
striking trader from CR, financial penalties,
• Not meeting EST (consecutive FY): AED 400,000 criminal prosecution
E C O N O M I C S U B S TA N C E R E G U L AT I O N S
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TRANSFER PRICING UPDATES
Recent
Developments

CBCR AND TP DOCUMENTATION

Countries UAE KSA Oman Qatar* Bahrain Kuwait

General TP rules to comply with

arm’s-length principle

Mandatory TP documentation
requirements
(local file and master file)
Local TP documentation
recommended
(no legal requirement)

Country-by-country report

T R A N S F E R P R I C I N G U P D AT E S
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Recent
Developments *As per the updated TP guide published by
GAZT in KSA

CBCR FILING IN THE GCC

Country Deadlines Comments
• Resubmission notification by UPE by 31 December 2020 for Reporting year
2019

UAE First CbC reporting in UAE

• CbCR by UPE before 31 December 2020 for Reporting year 2019

• Notification by UPE by 31 December 2020 for Reporting year 2020

Bahrain • No filing yet Expected soon
• Notification by UPE/SPE/Const ent. In CIT/Zakat return (April 2020 for Notifications and reports to
KSA Reporting year 2019)
be submitted through the
• CbCR by UPE/SPE before 30 December 2020 for Reporting year 2019 AEOI Portal*
Kuwait • No filing yet

Oman
• Notification by UPE/SPE/Const ent. by 31 December 2020 for Reporting year
First notification in Oman
2020 (extended to 30 April 2021)

Qatar • CbCR by UPE before 31 December 2020 for Reporting year 2019

Temporary measure
• Notification by UPE by 31 December 2020 for Reporting year 2020

T R A N S F E R P R I C I N G U P D AT E S
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Recent
Developments

KSA TRANSFER PRICING GUIDE UPDATED

• Added definitions of ‘Authorised OECD approach’, ‘De Facto Ownership of
Intangibles’, and ‘Group’
• When control is established on one or more level-> rebuttable presumption
that effective control exists. Taxpayer can rebut the presumption
• For selecting comparables, information on uncontrolled transactions
within a similar industry and market comparable to KSA must be obtained
• Upon GAZT's request, documentation must be provided by 30 calendar
days

T R A N S F E R P R I C I N G U P D AT E S
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DIRECT AND INTERNATIONAL TAX
Recent
Developments

KSA TAX AMNESTY

• COVID-19 fiscal stimulus initiatives
• KSA Tax amnesty regime ran from 18 March 2020 until 31 December 2020
(extended 2 times)
• Covered taxes - CIT, WHT, VAT and Excise Tax
• Temporary waiver of penalties
• Taxes due must be paid or an instalment plan must be requested
• Voluntary disclosure / outstanding declarations must be submitted before
the deadline

D I R E C T A N D I N T E R N AT I O N A L TA X
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Recent
Developments

AMENDMENT OF CORPORATE INCOME TAX BY-LAWS

Concept of "indirect ownership"

Previous provisions New Provision

(before January 2020) (with retroactive effect)

• Income Tax Law shall be applied on:

• The definition of Indirect ownership is no

• Resident capital companies in respect of
longer limited to the second level.
the shares directly or indirectly owned by
• Look through treatment
non- GCC nationals.

• Indirect ownership means ownership up to

the second level.

D I R E C T A N D I N T E R N AT I O N A L TA X
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 non-GCC
non-GCC

Recent national national

Developments
AMENDMENT OF KSA CIT BY-LAW
50% 50%

Example: HoldCo 2 Second level

• Before amendment: in principle subject to Zakat

(although scrutinized by GAZT), as the KSA OpCo
is indirectly held by a GCC company HoldCo 1 First level

• After amendment: subject to CIT, as UBOs are non-

GCC nationals
OpCo

D I R E C T A N D I N T E R N AT I O N A L TA X
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Recent
Developments
KSA CAPITAL GAINS TAX RESTRUCTURING CIRCULAR
Disposal of shares or assets by a Resident Taxpayer

Are subject to capital gains tax:

• Disposal of immovable property;

• Disposal of shares, stock or partnership in a resident company;
• Disposal of operating assets.

D I R E C T A N D I N T E R N AT I O N A L TA X
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Recent
Developments *Regardless whether the ultimate
owners remain the same

KSA CAPITAL GAINS TAX RESTRUCTURING CIRCULAR

Special cases:

• Stock dividends or stock split => date of initial acquisition of shares will
determine whether gains are taxed (before or after July 30, 2004)

• Gains arising from a merger

‣ Mergers generally do not involve disposal of shares and therefore do not
trigger a taxable event
‣ Some mergers may involve the disposal of assets and shares

D I R E C T A N D I N T E R N AT I O N A L TA X
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Recent
Developments
KSA CAPITAL GAINS TAX RESTRUCTURING CIRCULAR

Example - indirect disposal by non-resident

Special cases:
HoldCo B HoldCo C
• Internal corporate restructuring:
‣ Companies are part of the same group 100%

‣ Companies residing in KSA HoldCo A

‣ Two years holding rule
• Transfer by non-resident:
100%

‣ Indirect disposal does not trigger CGT

OpCo

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Recent
Developments

QATAR NEW EXECUTIVE REGULATIONS TO TAX LAW

• Permanent establishment: 6 months (183 days) threshold for service PEs and
construction PEs
• Transfer pricing: new TP documentation requirements
• Interest deduction limitation (3 times debt to equity ratio)
• Changes to scope of Withholding Tax
• Exemption for profits in listed companies does not cover underlying subsidiaries
• 5 years carry forward for losses
• Non-deductible expenses: gross-up, indirect taxes, director fees (except salaries),
foreign agent commission exceeding 3% of total revenue)
• Fixed assets: new tax deprecation rates
D I R E C T A N D I N T E R N AT I O N A L TA X
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Recent
Developments

OMAN AMENDMENTS TO THE INCOME TAX LAW 2020

• Submission of (1) electronic tax return within 4 months

• Residency:
‣ Natural person: 183 days
‣ Legal person: place of incorporation, place of management or headquarter
• Grievance Committee
• Provisions for automatic exchange of information

D I R E C T A N D I N T E R N AT I O N A L TA X
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Recent
Developments

GCC UPDATES WITH RESPECT TO THE MLI

Tax Agreement Deposit of instrument
Country Signature Entry into force
covered of Ratification
KSA 55 18-09-2018 23-01-2020 01-05-2020

Bahrain 44 27-11-2020

UAE 114 27-06-2018 29-05-2019 01-09-2019

Kuwait 45 07-06-2017

Qatar 76 04-12-2018 23-12-2019 01-04-2020

Oman 35 26-11-2019 07-07-2020 01-11-2020

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V AT U P D AT E S I N T H E G C C
K S A V AT U P D AT E S
KSA Value Added
Tax updates

LEGISLATIVE UPDATES
VAT rate increase • VAT Implementing Regulations updated
• VAT rate increased from 5% to 15% since 1 July 2020 (transitional rules)
Real Estate Transfer Tax •• Transitional rules apply
As from 4 October 2020,tillGAZT
30 June 2021 for
exempted certain
real contracts
estate supplies from VAT
and instead introduced 5% RETT
VAT Refund to real •• 15% VAT still
Ministerial applies1754
Decision to the leasing
issued of property
to allow for commercial
VAT refund purposes.
to developers in
estate developers relation to exempt supplies and effective since 30 November 2020
E-invoicing • All taxpayers required to implement the mandatory E-invoicing within 12
months period starting from 4 December 2020 (details to be released)

V AT U P D AT E S I N T H E G C C
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KSA Value Added
Tax updates

GUIDANCE AND CIRCULARS

Zero-rating export of • GAZT’s circular includes detailed guidance on conditions to zero rate
services services rendered to non-GCC customers

Transfer of going • Transfer of assets may qualify as a TOGC if certain conditions are met
concern

Provisions of collateral • Granting and release of collateral in exchange for loans are not subject to
VAT
• Release of collateral may creates VAT obligations if the borrower defaults
and the collateral ceases to be temporary
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U A E V AT U P D AT E S
UAE Value Added
Tax updates

LEGISLATIVE UPDATES
Zero-rating export of • Amendment made to article 31 (2) of VAT Executive Regulations
services • Scope of zero rated exported services narrowed down
• Condition for considering a recipient “outside of the State” amended
• Suppliers need to know the residency status, location and temporary
physical presence of the recipient while performing export of services
Zero-rating of PPE • Temporary application of VAT at 0% on certain supplies and import of
PPE used for the protection from COVID-19 between 1 September 2020
until 28 February 2021
List of designated • Update to the names of two Designated Zones “Free Zone Area in Al
Zones Qusais” and “Ras Al Khaimah Free Trade Zone”

V AT U P D AT E S I N T H E G C C
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UAE Value Added
Tax updates

GUIDANCE
E-commerce • Clear rules around the RCM and POS for goods
• Location of the customer matters
• No comments on customs regime for small consignments or e-
commerce shipments
• No presumption for marketplaces and undisclosed agents
• Unusual invoicing regime for 'agents'
Refund of VAT Paid • Certificate of entitlement not required for certain categories
Connected with Expo • Authorized person: who can legally bind the office
2020 Dubai • Additional category for claiming VAT refund for Official Participants
New Residences VAT • A refund form to be submitted by UAE Nationals via email along with
Refund User Guide supporting documentation
V AT U P D AT E S I N T H E G C C
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UAE Value Added
Tax updates

UPDATE TO THE GUIDANCE

VAT Real Estate Guide • Accommodation benefit provided by employer (without any charge), which is
not necessary for the employee to perform its role, is not recoverable by the
employer
• Bare land with temporary moveable structures is not a partially completed
building. Therefore, it will continue to be exempt.
• Tax treatment of a registered or unregistered Musataha agreement depends on
its registration and contractual terms
• Floorspace method is available to businesses which deal with supplies (sales
and rental) of commercial and residential properties.

V AT U P D AT E S I N T H E G C C
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UAE Value Added
Tax updates

UPDATE TO THE GUIDANCE

VAT Administrative • New category “alternative evidence to prove export of goods” added
Exceptions Guide
VAT Input Tax • FTA identified some common errors amongst the applications such as:
Apportionment • Calculations of the residual input tax - to be shared in excel along with the
Guide: Special standard method calculation
Methods
• Allocation of expenses clarification - clarify wholly attributable expenses
• Identify deviations from submitted returns - between returns and forms
• Authorized letter to request for special method - should be signed and stamped

VAT Charities Guide • Updated with the list of all cabinet decisions listing the designated charities

V AT U P D AT E S I N T H E G C C
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UAE Value Added
Tax updates

CLARIFICATIONS
Time-frame for • Even if tax invoice is received, the input tax can only be recovered when
recovering Input Tax intention to make payment is also established
• May be subject to internal approval process
Change in the permitted • Any change in the permitted use of a building that occurs after the date
use of a building of supply should be disregarded to determine the tax treatment on the
preceding sale of the building
Supplies advertised as • Businesses are urged not to advertise their supplies as “VAT-Free” during
VAT-Free promotion campaigns, unless they are zero-rated

V AT U P D AT E S I N T H E G C C
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UAE Value Added
Tax updates

CLARIFICATIONS
Owners Associations • OA’s required to deregister for VAT purposes after the publication of
Dubai Law No. 6 of 2019 as may not be making taxable supplies anymore
• OA's responsibilities transferred to Management Entities
VAT registration of Sole • Natural person owning several sole establishments needs to obtain only
Establishments one VAT registration
• VAT registration to be named after the owner
• Value of supplies made by the natural person and all its sole
establishments must be aggregated to assess whether the VAT
registration threshold

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UAE Value Added
Tax updates

OTHER UPDATES
Suspension of RCM on • FTA suspends automatic tax settlement facility on import under RCM for
imports non-payment of dues and penalties
• Suspension can be avoided with payment of outstanding dues
• A bank guarantee value will be set by FTA to reactivate facility
Turnover declaration • Turnover declaration letter required for businesses applying for a VAT
letter registration number
• FTA to calculate the penalties for late registration on the basis of the form

V AT U P D AT E S I N T H E G C C
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B A H R A I N V AT U P D AT E S
Bahrain Value Added
Tax updates

UPDATED GUIDANCE AND CLARIFICATIONS

• Simplified VAT Return
• Changing VAT return filing frequency
Guidelines • Mutual Agreement Procedure
• Oil and gas guide
• Registration & refunds by 'Eligible Persons’
• Retail and wholesale guide
• VAT treatment of obsolete stock
• Economic Activity
• Transfer of Going concern
• Real estate guide (updated)

• Input VAT proportional ratio calculation for FIs

• Warranty repair services
Public Clarifications
• Tax point for loans subject to 6 months deferral
• Place of supply of telecommunications services
V AT U P D AT E S I N T H E G C C
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Bahrain Value Added
Tax updates
Below applies to supplies pre and post VAT
implementation in Bahrain.

WARRANTY REPAIR SERVICES

Transaction VAT Treatment
1. Bahraini dealer has contractual obligation to provide warranty repair services to the
customer
• Out of scope of VAT

2. Reimbursement of the repair costs from the manufacturer (Provided costs were
already included in price of goods and no additional margin was charged)
• Out of scope of VAT

3. Any additional margin charged by dealer to manufacturer • VAT @ 5%

4. Bahraini dealer requests a 3rd party to provide warranty services • VAT @ 5%

• Bahraini dealer must self account for

VAT (if manufacturer is non-Bahraini) /
5. Customer purchases an extended warranty VAT @ 5% (if manufacturer is Bahraini)

• VAT @ 5% to the customer

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Bahrain Value Added
Tax updates

TELECOMMUNICATIONS SERVICES
• NBR amends special place of supply rule via public clarification with effect
from 1 February 2021
• Article 17: ‘use and enjoyment’ rule now aligned with 1988 Melbourne
Agreement
• Place of use and enjoyment = place of residence of customer
• 5 factors to determine place of residence e.g. IP address, country of issue
of SIM card, etc
• Non-Bahraini telecom providers do not need to register for VAT when
providing services to non-Bahraini resident customers
V AT U P D AT E S I N T H E G C C
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O M A N V AT U P D AT E S
Oman Value Added
Tax updates
*Executive Regulations not published yet.

OMANI VAT LAW

• On 12 October 2020, His Majesty Sultan Haitham bin Tarik issued Royal
Decree 121/2020 to implement VAT in Oman
• Law published in Official Gazette on 18 October 2020. Entry into force
April 2021 (after 180 days) - 16 April 2021
• Tax Authority (not Cabinet) to issue Executive Regulations in December
2020*
• VAT registration will open in February 2021 (staggered registration)
• Guidance: FAQ for individuals and businesses, VAT information sheet,
VAT registration -> more guidance expected soon
V AT U P D AT E S I N T H E G C C
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Oman Value Added
Tax updates
*Oman Tax Authority recently published list of 93
food items subject to 0% (resolution No.2/2021)

EVERYTHING IS SUBJECT TO 5%, EXCEPT…

Exemption Zero-rating

Certain food items* (e.g., water, meat, poultry, fish, dairy,

Provision of health care, and associated goods and services
olive oil, baby foods…)
Crude oil, oil derivatives, and natural gas
Provision of education, and associated goods and services

Sea, air, and land means of transportation for commercial

Undeveloped land (Bare land)
purposes, and related goods and services

Local passenger transport Rescue aircrafts, rescue boats and auxiliary ships

Renting or resale of residential property

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CUSTOMS UPDATES
Recent
Developments

INCREASE IN CUSTOMS DUTY RATES

• KSA increased custom duty rates applicable on wide range of goods

by enacting Cabinet Decision No. 559 on 28 April 2020
• Decision affected over 2,000 Tariff lines of KSA Harmonized Tariff
Schedule starting 10 June 2020
• Tariff applicable to these goods increased by a range of 5%-15%

C U S T O M S U P D AT E S
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 Recent
Developments

INCREASE IN CUSTOMS DUTY RATES

• Amongst others, the following goods are subject to the increase:
Items Old Rate (%) New Rate (%)

Foods and beverages 0-5 7-25

Mineral products 5-12 Up to 15
Chemicals 5-12 5.5-15
Textiles/fabrics 5-12 15
Plastics 5 6.5-15
Building Material 5-12 Up to 15
Metal products 5 Up to 20
Machinery 5-12 Up to 15
Motor vehicles and spare parts 5 7
C U S T O M S U P D AT E S
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Recent
Developments

ISRAEL BOYCOTT
• UAE and Bahrain issue decree abolishing Israeli Boycott which lasted
since 1972
• Under the abolished law, the UAE and Bahrain prohibited any physical or
legal person from concluding any agreements with organizations and
persons residing in Israel or its citizens, or persons working for its
account or benefit. It also prohibited the trade of goods
• For Customs and VAT purposes, Israel will be treated as a third country

C U S T O M S U P D AT E S
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Recent
Developments

DUBAI NOTICE ON IMPORTS INTO FREE ZONES

• Dubai Customs issued Notice No.17/2020 clarifying the requirements for
importing goods into Dubai Free Zones. The notice clarifies that there are
two categories of goods: (1) Consumed goods not subject to Customs
Duties; (2) Goods subject to Customs Duties

• The first category includes items consumed within the Free Zone for the
establishment and management of projects and facilities or involved in
the manufacture therein. ( Building equipment, machinery, etc.)

C U S T O M S U P D AT E S
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Recent
Developments

DUBAI NOTICE ON IMPORTS INTO FREE ZONES

• The second category of goods which are subject to Customs Duties
include: (1) Goods sold to the local market, such as foodstuff, etc; (2)
Worn material suitable for sale or use
• The customs regime is unrelated to the VAT regime applicable for
supplies made in Free Zones
• Entities are required to comply with a specific procedure when importing
goods into the Free Zone which fall within the first category

C U S T O M S U P D AT E S
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OTHER UPDATES
Recent
Developments

ULTIMATE BENEFICIAL OWNER(S)

Background

• UAE issued Cabinet Decision No. 58/2020 on Regulation of

Procedures related to UBO’s effective on 28 August 2020
• Aims at setting procedure for uniform reporting and registration of
UBOs of mainland and free zone companies in UAE, except:
‣ Companies registered in the financial free zones e.g. ADGM, DIFC
‣ Companies wholly owned by the Federal or local government
‣ Companies owned by a company listed in a regulated market subject to the
disclosure requirements imposing transparency of its beneficial owners
O T H E R U P D AT E S
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Recent
Developments

ULTIMATE BENEFICIAL OWNER(S)

Background (contd.)
• Any physical person who owns or ultimately controls through direct or indirect
ownership shares at rate of 25% or more, or whoever has right to vote at rate of
25% or more, including retaining ownership or control through other means such
as right of appointment or dismissal most of the Managers
• If no physical person was determined as per (1), the physical person who
exercises control over legal person through other means such as right of
appointment or dismissal of most of Managers
• If no physical person can be determined as per (1) or (2), then physical person
who holds position of person in charge of Senior Management
O T H E R U P D AT E S
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Recent
Developments

UAE: ULTIMATE BENEFICIAL OWNER(S)

Compliance requirements
• First reporting deadline was on 27 October 2020 and was extended by
some Regulatory Authorities like JAFZA and DDA to 31 December 2020
• UBO forms are not uniform and required information vary from one
Regulatory Authority to another
• Companies struggle to comply due to lack of guidance on UBO and
means of submitting the register (e.g. DED)
• Update Register in case of any changes and notify Regulatory Authority
within 15 days from date of change
O T H E R U P D AT E S
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Recent
Developments

UAE: ULTIMATE BENEFICIAL OWNER(S)

Compliance requirements (contd.)

• Maintain and submit UBO Register and supporting documents upon

request of Regulatory Authority
• Also needed at time of renewal of trade licenses or applying for new
license in case of new companies

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Recent
Developments

UAE: ULTIMATE BENEFICIAL OWNER(S)

Sanctions/Penalties for non-compliance

• Regulatory Authorities can:

‣ impose a fine for non-compliance (DAFZA: daily fine between AED 500 to AED 5,000)
‣ may suspend, cancel or refuse to renew the trade license
‣ start proceedings to wind down or de-register the company

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Recent
Developments

CONTRACT REPORTING
• Taxpayers in KSA and Qatar are obliged to notify the tax authorities for
contracts concluded in the country
Requirements Qatar KSA
Persons covered All entities and gov’t bodies All entities and gov’t bodies

Service contracts - QR 200,000 or more

Contract amount threshold SAR 100,000 or more

Supply and service contracts - QR 500,000 ore more

Within 30 days from the date of execution of contract Within 3 months from the date of
Due date for notification
or date of request by the GTA conclusion of contract and amendments;

Within 1 month
Contracting fromjointly
parties cessation
liableof
forcontract
any tax
Penalty for non-compliance QR 10,000
claim or fines due on the contract
O T H E R U P D AT E S
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Recent
Developments

TAX RESIDENCE CERTIFICATE IN THE UAE

• Resident companies and individuals in the UAE who want to avail the benefits from
the double tax agreement between UAE and contracting country can apply for tax
residence certificate
• The Ministry of Finance (“MoF”) in the UAE has migrated its tax residence certificate
application services to Federal Tax Authorities (“FTA”) portal
• Application fees were also amended instead of the hefty AED 10,000 UAE MoF was
charging, it will now charge only 50 AED for the submission and AED 500 for
reviewing the application
• For legal persons not registered with the FTA, the fee for the reviewing the
application is AED 1,750
• For natural persons, the fee is AED 1,000 (instead of AED 2,000) as it was before
O T H E R U P D AT E S
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Recent
Developments

TAX CARD IN OMAN

• The Oman Tax Authorities (“TA”) has issued Decision No. 27/2020,
published in the Official Gazette on 7 June 2020, and further to Royal
Decree (RD) No. 9/2017 and Ministerial Decree (MD) No. 14/2019 that
states that from 1st July 2020 all companies in Oman must apply for an
obtain a tax card
• The application for the new tax card was open effective 1 July 2020
• The tax card serves as an identification number on all correspondences,
invoices, bills and contracts entered into by a taxpayer
• Failure to comply will be subject to fine between OMR 200 to OMR 5,000
O T H E R U P D AT E S
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Recent
Developments

UAE’S NATIONAL ECONOMIC REGISTER

• The UAE has created a National Economic Register (“NER”) in the UAE
• This was driven by the transparency requirements of the FATF and has
also been encouraged with  the introduction of various new disclosure
requirements such as  the Economic Substance Regulations, CbC
Reporting, UBO Register and so on
• Previously unavailable, or with only limited or partial information, the
Ministry of Economy (MOE) has now collected much more information,
even leading to a type of UAE Public Register now
• NER is useful to look up for vendors and their licenses
O T H E R U P D AT E S
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Recent
Developments

DHAREEBA REGISTRATION IN QATAR

Registration requirements

• Introduction of “Dhareeba”, an all-in-one tax platform in Qatar

• Initial registration deadline 30 September 2020 extended until 31 December
2020
• From 1 November 2020 onwards, all taxpayers are required use the new
Dhareeba portal to comply with their tax obligations
• Penalty for late registration
O T H E R U P D AT E S
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Recent
Developments

DHAREEBA REGISTRATION IN QATAR

Dhareeba features
Through Dhareeba, taxpayers are now able to do the following services:
• Tax return filing e.g income tax return, WHT, capital gains tax return filing
• Contract declaration
• Filing of CbCR notification
• Submission of Master file/local file
• Request for Mutual Agreement Procedure
• Request for Tax Residency Certificate
• No objection Certificate (Change of Ownership, Tax Clearance)
O T H E R U P D AT E S
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Recent
Developments

E-INVOICING IN KSA
Background
• GAZT published new regulation that requires all taxable persons resident in
KSA for VAT purposes or who are acting on their behalf to issue an
electronic invoice "E-invoice" for all their taxable supplies
• GAZT granted a 12 months period (starting from 4/12/2021) for all
taxpayers to implement mandatory E-invoicing
• GAZT defined the E-invoice as an invoice issued in electronic and digital
means. Therefore, a scanned or copied paper invoice shall not be
considered as an invoice with an electronic format for the purpose of the
regulation
O T H E R U P D AT E S
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Recent
Developments

E-INVOICING IN KSA
Background (contd.)
• E-invoices and their vast amount of data would be shared directly with GAZT
through a system that links all taxable transactions for validation, reporting,
control, tracking, and audit purposes
• The details and the requirements for the above-mentioned system are expected
to be published by GAZT within a 6 months period
• The regulation also contains some minimum technical specifications for issuing
E-invoices. Thus, any platform hard/software used to issue the E-invoice should
be connected to the internet and to the external application programming
interface to ensure that data is well protected and secured
O T H E R U P D AT E S
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LOOKING FORWARD TO 2021
Important matters
to consider in
2021

2021
• VAT implementation in Oman • Amendments for VAT Laws
• Bahrain CbCR (already signed MCAA) expected
• Kuwait CbCR? • MLI Impact?
• Kuwait VAT? • UBO more compliance follow
• Qatar VAT? up
• More audits in the UAE - more information collected• End of transitional rules in KSA
• FTA audits of ESR returns - time to add substance • Expo 2020 in 2021
• More litigation • No more boycott of Qatar
• More questionnaires for audit and TP
LOOKING FORWARD TO 2021
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Upcoming
events

• GCC Tax Training Program, 25 - 27 January 2021

• Introduction to domestic tax systems in the GCC, 8 February 2021
• Tax Tuesday: Legal & tax challenges of the Defense sector, 16 February
2021
• UAE VAT Return training, 3 March 2021
• KSA Tax filing webinar, 25 March 2021

Check our training catalogue!

UPCOMING EVENTS
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Q&A session

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Get in touch

JBC 4 1804 - Cluster N

Jumeirah Lakes Towers, Dubai
United Arab Emirates
+971 58 263 3018
info@aurifer.tax
www.aurifer.tax

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DISCLAIMER
The contents of this training is for educational purposes only and does not
constitute formal advice.

The training content is intended to provide helpful information and a

comprehensive overview of the current available legislation. While we attempt to
thoroughly address specific topics, the information provided does not cover all
provisions of the legislation nor all guidelines on specific topics issued by the
Tax Authorities. By no means it can replace formal advice provided by a tax
professional.

Aurifer shall not be held liable for any direct or indirect loss or profit of any other
damages, including but not limited to special, incidental, punitive, consequential
or other damages when participants in the training solely rely on the contents of
this training.

In implementing or utilising any part or portion of Aurifer’s training materials,

participants agree to do so at their own discretion and their own risk and to not
hold nor attempt to hold Aurifer liable for any loss, liability, claim, damage and
all legal cost or other expenses arising whatsoever in connection with the use,
misuse or inability to use the materials or learnings.

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