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MIDDLE EAST TAX FACTS 2012

CONTENTS

BAHRAIN EGYPT KUWAIT LEBANON OMAN QATAR SAUDI ARABIA U.A.E.

3 11 21 31 34 45 50 59

BAHRAIN TAX FACTS 2012

BDO Public Accountants 10th & 11th Floors GBCORP Tower Bahrain Financial Harbour PO Box. 787 Manama, Kingdom of Bahrain Tel: +973 17 530 077 Fax: +973 17 530 088 Email: info@bdo.bh www.bdo.bh

Bahrain Tax Facts 2012

CONTENTS
05 06 07 08 09 10 Corporate Income Tax Personal Income Tax Social Insurance Withholding Tax Other Duties and Fees Bi-lateral Tax Treaties

Bahrain Tax Facts 2012

Corporate Income Tax


CORPORATE TAX There is no corporate taxation system in Bahrain with the exception of profits arising from the extraction of petrochemical products. Corporate income tax on the profits of companies engaged in the exploration, production or refining of oil and gas in Bahrain is levied at a rate of 46%. Taxable income for oil and gas companies is on net profits, which consist of business income less business expenses. FILING REQUIREMENTS Oil and gas companies are required to file an estimated tax declaration on or before the 15th day of the third month of the tax year. Tax must be paid in 12 monthly installments. CARRY FORWARD LOSSES Taxable losses of oil and gas companies may be carried forward indefinitely. Carry back is not permitted.

Bahrain Tax Facts 2012

Personal Income Tax


There is no personal taxation system for income, capital gains, gifts or inheritances in Bahrain and, furthermore, no requirements to file any form of tax return.

Bahrain Tax Facts 2012

Social Insurance and Other Contributions


SOCIAL INSURANCE Social insurance contributions are payable for Bahrainis at a rate of 18% of basic wages of which 12% is the employer's contribution and 6% is the employee contribution. Unemployment insurance at a rate of 1% is also payable by both Bahrainis and expatriate employees. The base for the calculation of social insurance contributions cannot exceed BD 4,000 per month. In case the salary exceeds BD 4,000 per month, the amount of contribution will be calculated only on BD 4,000. EXPATRIATE EMPLOYEE MONTHLY FEE Each entity that is registered with the Labour Market Regulatory Authority (LMRA) is required to pay 10 Bahraini Dinars for every expatriate employee employed in Bahrain. Due to the current unrest in Bahrain, this fee has been waived by the LMRA until further notice. TRAINING LEVY Organizations with 50 or more employees are liable to pay the training levy at a rate of 4%. The base for the calculation of the training levy is the gross salary of expatriate employees as registered with Social Insurance Organization, but limited to BD 4,000 per month per employee. Training levy applies only on salaries paid to expatriates. END OF SERVICE BENEFIT Expatriate employees at the completion of their employment contract are entitled to an end of service benefit which is calculated on the following basis: Fifteen days salary for every year of service for the first three years of continuous service; One month's salary for every year of service thereafter.

If an employee leaves the services of the employer within 3 years then no end of service benefit is payable to the employee. However if an employee leaves the services after 3 years but less than 5 years, then the number of days entitlement is one-third of the total days calculated based on the above. However if the employer terminates the services of an employee, then full end of service benefit is paid to him, irrespective of the number of years of employment with the employer.

Bahrain Tax Facts 2012

Withholding Tax
There is no withholding of taxes on the repatriation of profits or dividends, royalties, license fees or group charges. However, if the investor operates in other countries in the region, the withholding tax rules in those countries will need to be taken into account in the regional business structure.

Bahrain Tax Facts 2012

Other Duties and Fees


TOURISM LEVY Persons using hotel facilities are normally charged a government levy of 5% and a 15% service charge is generally added to the total bill amount. VALUE ADDED TAX Bahrain has no value added tax. MUNICIPAL TAX Municipal tax is payable by individuals or companies renting property in Bahrain. The rate of the tax varies according to the nature of the property, namely; unfurnished /furnished residential or commercial property. However this is generally 10% of the monthly rental. CUSTOM DUTY There are no customs duties on trade in locally manufactured goods between Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Qatar, Saudi Arabia, Oman and the United Arab Emirates) where the local shareholding is at least 51% and value added in goods produced exceeds 40%. On all other imports, custom duties are levied at a rate of 5%, with the exception of tobacco products (100%), liquor (125%) and duty free of imports of vegetables, fruits, fresh and frozen fish, meat, books, magazine and catalogues. LAND REGISTRATION TAX There is a land registration fee payable to the government on the transfer of real estate property. The fee for Registration of Sales Agreement of property is as follows: From BD1 to BD70,000 - 1.5%, with Discount 1.25%* From BD70,000 to BD120,000 - 2%, with Discount 1.8%* From BD120,000 and above - 3%, with Discount 2.7%*

* Survey and Land Registration Bureau of the Kingdom of Bahrain offers a 10% discount calculated on the total registration fees, if the registration process begins within two month from the execution of the Registration and Sales Agreement.

Bahrain Tax Facts 2012

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Bi-lateral Tax Treaties


Bahrain has signed treaties for the avoidance of double taxation with the following countries: Algeria, Austria, Belarus, Belgium, Brunei, Bulgaria, China, Egypt, France, Iran, Ireland, Jordan, Lebanon, Luxembourg, Malaysia, Morocco, Netherlands, Pakistan, Philippines, Singapore, Sudan, Syria, Thailand, Turkey, Uzbekistan, United Kingdom and Yemen. Note : Some of the above treaties are not yet in force. Bahrain has an inheritance tax treaty with France. In addition, a US-Bahrain Free Trade Agreement (FTA) has been entered into between the two countries. This agreement gives customs duty exemption to all US industrial and agricultural products. Particulars of the Tariff Elimination as explained in the FTA are as follows: The Agreement provides for the elimination of all customs duties on originating goods no later than 10 years following the entry of the FTA into force. The Agreement is comprehensive and covers all tariff lines. When the FTA became effective, 96% of Bahrain industrial and agricultural products gained duty-free access to the United States markets. Tariffs on the remaining products, which are not currently produced in Bahrain, have been phased-out according to the following staging categories: Category A: Immediate duty-free access (96% of industrial and agricultural products). Category B: Duties will be eliminated in 10 equal annual stages (1% of industrial and agricultural products). Category C: Goods that are already duty free and will continue to receive duty-free treatment. Category D: Duties will be eliminated in 5 equal annual stages (3% of industrial and agricultural products). Bahrain is to provide immediate duty-free access on all US industrial and agricultural products, except 80 products on which the duties will be phased-out over 10 years.

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EGYPT TAX FACTS 2012

BDO Egypt Consulting Ltd. 1, Wadi El Nile St., Mohandessin, Giza Cairo. Egypt P.O.Box.: 110/12655 Tel: +202 3303 0701 Fax: +202 3303 2228 www.bdo.com.eg

Egypt Tax Facts 2012

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CONTENTS
13 15 17 18 19 20 Corporate Income Tax Salary Tax Social Insurance Sales Tax Stamp Tax Withholding Tax

Egypt Tax Facts 2012

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Corporate Income Tax


RATES OF CORPORATE TAX In general, the standard rate of corporate tax is 20% applied to the companys taxable profits. Starting the fiscal year 2011, an additional tax rate had been imposed, being 25% on taxable profits in excess of EGP 10 million. THE CORPORATE TAX YEAR The rate of corporate tax is fixed in respect of the corporate tax year or the financial year. The company has the right to choose the date of year-end to issue its annual financial statements, regardless of the calendar year. Each year has to be accounted for separately. The first year is to start from the date of incorporation to the end of the following financial year (long period). DEDUCTIBLE EXPENSES The general rule is that only expenses that are wholly and exclusively incurred in earning the income of the business are deductible. The cost and expenses have to be supported by proper documents. ACCOUNTING METHODS AND BUSINESS PROFITS A companys taxable income is based on its accounting profits, computed according to the Egyptian Accounting Standards, which is, to a great extent, compliant with the International Financial Reporting Standards (IFRS). FILING REQUIREMENTS The corporate tax return must be filed along with all supporting documents (e.g. Audited financial statements), within four months from the accounting year end, e.g. 30 April, for 31 December year end. CARRY FORWARD LOSSES Losses (on a year by year basis) are carried forward for deduction from subsequent profits for up to five years.

Egypt Tax Facts 2012

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Corporate Income Tax


Continued
DIVIDENDS There is no withholding tax on the payment of dividends, whether the recipient is resident or non-resident. PAYMENT TO NON-RESIDENTS The amounts paid to foreign entities against services rendered, are subject to withholding tax at a rate of 20%, even if it is paid to an entity that is resident of a country that has a double tax treaty with Egypt. It is the overseas recipient's responsibility to apply to the Egyptian Tax Authority for refunding the balance between the 20% withheld taxes and the rates on royalties and interest, as per the treaty, should that exist.

Egypt Tax Facts 2012

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Salary Tax
BASIS OF TAXATION The salary tax is the liability of the employee not the employer. However, the employer is responsible to withhold and remit the salary tax on behalf of the employee on a monthly basis. Salary tax is applicable to the following: All earnings due to the employee resulting from his/her work with third parties with or without a contract, periodically or non-periodically, whatever the names, forms or reasons of those earnings, and whether they are for works performed in Egypt or abroad and paid by a source in Egypt, including wages, remunerations, incentives, commissions, grants, overtimes, allowances, shares and portions in profits, as well as the monetary privileges and allowance in kind of all types. Earnings due to the employee from a foreign source for works performed in Egypt. Salaries and remunerations of chairman, members and directors of the boards of directors in the associations of capital in return for their administrative work.

RATES OF SALARY TAX The Taxable employees income is subject to progressive rates as follows: First L.E. 5,000 Between L.E. 5,000 and L.E. 20,000 Between L.E. 20,000 and L.E. 40,000 Between L.E. 40,000 and L.E. 10,000,000 More than L.E. 10,000,000 TAX ON PAYMENT TO NON-RESIDENT Amounts paid to non-residents (staying in Egypt less than 183 days in any 12 months) from any source, are subject to 10% taxes, without any deductions. 0% 10% 15% 20% 25%

Egypt Tax Facts 2012

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Salary Tax
FILING REQUIREMENTS

- Continued

Employers are required to submit a quarter salary tax return to the Tax Authority within one month from the end of each calendar quarter. Taxes are to be withheld monthly and paid to the Tax Authority during the first 15 days of the following month.

BENEFITS-IN-KIND Benefits in kind that are given to the employees shall be determined on basis of the market value. However, the value of the following benefits in kind shall be estimated as follows: Benefits Tax Treatment

The cars expenses (used by 20% of the total car expenses is subject to salary the employee) tax. 20% of the total mobile invoices is subject to the mobile expenses salary tax. The difference between the interest rate 7% and The employees' loans with the employees loan interest (if its less than 7%) interest rate less than 7% is subject to salary tax. The value of the benefit shall be determined on The company's stocks granted the basis of the difference between the market at a value less than the value of the stock on the date it is obtained and market value of the stock. the value reckoned for the workers. Life insurance premium paid The benefit shall be determined at the premiums by the company paid by company. TAX EXEMPTION Personal allowance of L.E. 4,000 pa (over and above the zero-rated L.E. 5,000 of the annual salary). Social insurance subscriptions and Private insurance funds. Life insurance installments and Medical insurance. The following fringe benefits: employees meals, medical care, employees' group transportation, employees' uniform, housing allowed by the employer to the employees related to performing their work. Employees share in profit distribution.

Egypt Tax Facts 2012

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Social Insurance
Social insurance applies to Egyptian nationals in full time employment, unless a social security totalization agreement provides otherwise. Employees pay a portion of their wages through employer withholding, in addition to another portion borne by the employer. SOCIAL INSURANCE RATE The rate of Social Insurance is as follows, showing the employer and employees portions: Amount Basic salary up to L.E. 875/month Monthly amounts in excess of L.E. 875 for other payments such as overtime or representation allowances, up to L.E. 1050 FILING REQUIREMENTS The company has to pay social insurance (employee portion & employer portion) to the Social Insurance Authority within 15 days of the following month. Semi-annual social insurance form 2 has to be submitted in January and July of each year. Employer % 26 24 Employee % 14 11

Egypt Tax Facts 2012

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Sales Tax
The General Sales Tax (GST) in Egypt is to a great extent similar to VAT system in the EEC countries. GST is imposed on: Goods; where the general tax rate is 10% on each invoice. Services; which are subject to sales tax at various rates. There are some services which are not subject to tax such as the training services, professional services, and consultancy services.

TAXES ON INPUT For goods, in most cases, the company can deduct the sales tax paid on inputs from the sales tax on output, and pay the balance monthly, together with a monthly tax return. For services, it is not allowable to deduct the sales tax paid on inputs from the sales tax on output in relation to services. INVOICES DETAILS The following are the details that must be included on customer invoices: Invoice number starting from one. The company address in Egypt Sales tax registration number. Commercial registration number. Corporate tax number. Customer name.

EXPORTED GOODS AND SERVICES Both exported goods and services are subject to sales tax at a rate of zero%. BASIS OF TAXATION The earlier of the following shall be considered as the tax point, and the company has to settle the sales tax accordingly: The date of issuing the invoices. The date of delivery of commodity or rendering the services. The date of payment of the commodity value or the return of services, whether being wholly or partially, or an amount paid on account or settlement of account, or on credit, or any other means of payment.

Egypt Tax Facts 2012

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Stamp Tax
Stamp tax is generally imposed on the following: Documents: a wide range of documents including certificates and declarations, judicial documents, Advertisements, licenses, utility bills. Contracts: all types of contracts Transactions: wide range of transactions such as banking transaction (i.e. loans, deposits, accounts and documents), insurance premiums, transportation Services, lotteries, company registrations, etc.

There are two types of stamp duty rates. The first is a fixed amount that is imposed on documents, contracts, etc. The amount of fixed stamp duty is specified in the legislation and varies according to the document in question. The second is a proportionate rate and this, generally, applies to transactions. The proportionate rate is calculated as a percentage. There are many percentages and amounts paid according to the Stamp Tax Law. However, below are the important items: Amount Contract Certificate Amount Loan Advertising in news papers & TV. FILING REQUIREMENTS There are various date of filing such as: Stamp tax return for advertising has to be submitted during 2 months from the date of publishing of advertisement. The stamp tax on loan has to be settled on quarterly basis L.E 1.00 per page 1.00 per page L.E 0.2% 15%

Egypt Tax Facts 2012

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Withholding Tax on Local Transactions


BASIS OF TAXATION All entities including projects established as free zone companies are obliged to withhold a tax percentage from every amount paid exceeding L.E. 300 on the account of the corporate tax of the vendor. RATES OF WITHHOLDING TAX Transaction Services Construction Supplies Individual professional fees Rate 2% 0.5% 0.5% 5%

FILING REQUIREMENTS Entities are obliged to settle the withholding tax due before end of April, July, October, and January of every year.

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KUWAIT TAX FACTS 2012

BDO Al Nisf & Partners Al Johara Tower, 6th Floor Khaled Ben Al Waleed Street, Sharq P.O. Box 25578, Safat 13116, Kuwait Email: tax@bdo.com.kw Tel: +965 2242 6999 Fax: +965 224o 1666

Kuwait Tax Facts 2012

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CONTENTS
23 Corporate Income Tax 29 Other Taxes

Kuwait Tax Facts 2012

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Corporate Income Tax

RATES OF CORPORATE TAX Tax is levied at a flat rate of 15%. INCOME SUBJECT TO TAX Any income earned from carrying out business or activities in the State of Kuwait, either directly or through an agent, is taxable. An agent is a person or entity authorized by a principal to carry out business or activity on behalf of and for the account of the principal under a binding agreement. Income earned by any entity from the following is deemed to be earned from the State of Kuwait and therefore taxable in Kuwait. i) Income earned from any activities or businesses wholly or partially executed in the State of Kuwait, including income earned from the supply and sale of goods or provision of services whether the contract has been concluded inside Kuwait or abroad. Royalty, franchise, license and similar fees earned from Kuwait. Commissions or fees earned in cash or in kind from representation or brokerage agreements relating to Kuwait. Profit from any industrial or commercial activity in the State of Kuwait. Profit from sale or transfer of assets including sale of shares in a company whose assets are principally formed of immovables in the State of Kuwait (profits from sale of shares listed on the Kuwait Stock Exchange are however not taxable). Income earned from lending of funds in the State of Kuwait. Profit from purchase and sale of goods or property in the State of Kuwait including rights associated with tangible or intangible assets. Income earned from having a permanent office in Kuwait where sale and purchase contracts are concluded including place of work from where activity is carried out or contracts concluded (irrespective of whether such place of work is owned, leased or belongs to a third party). Profit from leasing of any movable or immovable property for use in the State of Kuwait. Profit from rendering of services in Kuwait including fees from administrative, technical or consulting services (irrespective of whether the contract is wholly or partially performed in the State of Kuwait or signed inside Kuwait or abroad).

ii) iii) iv) v)

vi) vii) viii)

ix) x)

Kuwait Tax Facts 2012

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Corporate Income Tax


Continued
Capital gains from trading in securities on the Kuwait Stock Exchange is exempted from tax. Any income earned by individuals (natural persons) is not taxable in Kuwait.

Entities which are fully owned by Kuwaitis are not taxed. Also, entities which are registered in the Gulf Cooperation Council (GCC) countries (comprising of Kuwait, Saudi Arabia, Bahrain, UAE, Oman and Qatar) and fully owned by Kuwaiti / GCC citizens or any corporations which are in turn fully owned by Kuwaiti / GCC citizens are not taxed in practice. A foreign entity with a shareholding in a local Kuwaiti company is required to calculate and pay tax based on its share of profit in the local entity. THE CORPORATE TAX YEAR The taxable period is a year and normally has to be the calendar year. A body corporate may, within three months from the date of signing the contract or the date of commencing the business activity in Kuwait, apply to the Director of the Income Tax Department for permission to submit its first tax return for a period of less than one year (but not less than 7 months) or for an extended period of up to 18 months. It is at the discretion of the Tax Department to grant approval for a tax period which is less than or more than a year. DEDUCTIBLE EXPENSES All expenses directly incurred in carrying out trade or business in Kuwait, subject to the limits specified in the tax law and regulations, are allowed as a deduction in computing taxable profit, provided that the expense claimed as a deduction is: a) b) c) necessary for earning the revenue; real and supported by proper documents; and related to the taxable period.

ACCOUNTING METHODS AND BUSINESS PROFITS A companys taxable income is based on its net profit, computed according to the Kuwait Income Tax Decree of 1955 and related regulations which, inter alia, specify limits on deduction of certain expenses.

Kuwait Tax Facts 2012

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Corporate Income Tax


- Continued
FILING REQUIREMENTS The tax declaration of each taxable period is required to be submitted within 3 months of the end of the taxable period. It is possible to seek extension up to 60 days in filing of the tax declaration. Application for extension of time for filing tax declaration should be submitted on or before the 15th day of the second month following the end of the taxable period. It is at the discretion of the Director of Income Tax to grant an extension. If the Tax Department does not respond to the request for extension in filing tax declaration within 30 days of the application date, it should be assumed that the application is rejected. Taxes have to be paid in four instalments on the 15th day of the 4th, 6th, 9th and 12th month following the end of the tax year. In case extension is granted, tax has to paid fully at the time of filing the tax declaration. Delays in the submission of the tax declaration is subject to tax penalties at the rate of 1% of the tax payable for each 30 days delay or part thereof. Additionally, penalty is charged for any delay in payment of tax, at the rate of 1% of the tax due for each 30 days delay or part thereof. The tax declaration has to be filed together with the following: a) b) c) d) e) f) g) h) i) Report from an auditor registered with the Ministry of Commerce & Industry and approved by the Ministry of Finance Financial statements Trial balance Statement of fixed assets Statement of subcontractors showing name, address, value of work performed during the taxable period, retention held and copy of last payment certificate Inventory statement showing stock quantity and amount Details of contracts in progress showing the income and expenses relating to each contract Copy of last payment certificate issued by project owner For insurance companies, statement showing details of reinsured policies and their terms

TAX INSPECTION AND ASSESSMENT Following the filing of the tax declaration, it is a normal practice for the Income Tax Department to carry out an inspection of body corporates books and records to verify the income and expenses reported in the tax declaration to the supporting documents.

Kuwait Tax Facts 2012

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Corporate Income Tax


- Continued
Based on the findings from the tax inspection, adjustments are normally made to the taxable profit e.g. if expenses are not supported, they are disallowed at the time of the tax inspection. Following the tax inspection, an assessment letter is issued. If additional taxes are assessed, the body corporate has the option of paying the additional taxes (within 30 days of the assessment letter, otherwise a penalty of 1% is levied for every 30 days delay or part thereof in paying the additional tax) or raising an objection within 60 days from the date of the tax assessment letter. If an objection is not raised within 60 days, tax as per the assessment letter becomes final and payable. If an objection is raised but is not satisfactorily resolved within 90 days from the date of the objection letter, the body corporate has the right to have its case heard by an Appeals Committee. Tax appeal has to be filed within 30 days from the date of issue of the Tax Departments letter in response to the tax objection or, in case of no response from the Tax Department, tax appeal has to be filed within 30 days after the end of the 90 days period from the date the objection letter was filed. If the appeal is not filed within the 30 day period, the assessment by the Tax Department becomes final and payable. If the body corporate is not satisfied with the outcome of the Appeals Committee decision, it has the option to refer the case to the concerned courts within 60 days from the date of the tax appeal committees resolution. Otherwise the decision by the tax appeal committee becomes final and any additional tax assessed has to be settled. CARRY FORWARD LOSSES The losses arising in any tax period can be carried forward to be offset against future taxable profits, for a maximum period of three years. Unutilized tax losses cannot be carried forward if a body corporate ceases activities in Kuwait or does not generate any revenue from trade or business in Kuwait or enters liquidation or changes its legal status or merges with another entity. Tax losses cannot be carried back.

Kuwait Tax Facts 2012

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Corporate Income Tax


- Continued
DIVIDENDS There is no withholding tax on the payment of dividends, except for dividends paid by companies listed on the Kuwait Stock Exchange which is subject to a 15% withholding tax. TAX RETENTION Government authorities, ministries, public and private companies, societies, natural persons, contractors and all other bodies/institutions in Kuwait (including foreign entities carrying out trade or business in Kuwait) are required to retain 5% of the total contract value or 5% from each payment made to the contracting party. This retention can be released only on receiving a tax retention release letter from the Tax Department confirming that the retention can be released. Entities that fail to comply with the above or to notify the Tax Department about the subcontractors will not be allowed to claim deduction for the subcontract cost. Additionally, such entities will be liable for paying the tax due of the body corporate that has failed to settle its taxes. A tax retention release letter (tax clearance letter) is issued by the Tax Department in the following cases: a) b) c) if an entity is not subject to tax or is exempted from tax or has incurred a loss; if an entity has settled all due taxes; and if an entity has submitted an approved bank guarantee or any other guarantee acceptable to the Tax Department that guarantees settlement of tax.

DOUBLE TAX TREATIES Kuwait has signed and ratified double taxation treaties with a number of countries. Please contact BDO Kuwait for latest update on countries with whom Kuwait has signed and ratified double tax treaties. TAX HOLIDAY Under the Foreign Direct Investment Law No. 8 of 2001, as amended, a tax holiday up to 10 years may be granted to an entity that is involved in carrying out one or more of the following economic activities and projects: a) b) c) Industries except the projects related to discovering and producing oil and gas. Establishing, operating and managing infrastructure projects such as water, electricity, sewage or communications. Banks, investment companies and exchange companies that the Central Bank of Kuwait has approved to be established.

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Corporate Income Tax


- Continued
d) e) f) g) h) i) j) k) Insurance companies that the Ministry of Commerce and Industry agrees to establish. Information technology and software development. Hospitals and medicines. Road, sea and air transport. Tourism, hotels and entertainment. Culture, mass media and marketing except publishing newspapers, magazines and publishing establishments. Housing projects and areas development except real estate speculation. Real estate investments through the foreign investors sharing in the Kuwaiti public companies as per the provisions of Law no. 20 for 2000.

Kuwait Tax Facts 2012

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Other Taxes
CUSTOMS DUTIES The six Gulf Co-operation Council (GCC) states comprising Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and UAE announced the formation of the Customs Union with effect from 1 January 2003 eliminating customs duties for trade within GCC states as well as removing regulations and procedures which restrict trade within GCC. The Customs Union results in unified customs duties. The GCC states have approved a unified customs tariff of 5% on CIF invoice price subject to certain exceptions. Collection of customs duty takes place at the first point of entry in the GCC. Subsequent movement of goods within the GCC states does not attract duties. A higher tariff is imposed on imports of tobacco and its derivatives. Each GCC member state can continue to impose protective customs duty as per the list approved for each GCC country. If the goods covered by protection are imported first through another GCC state in which protective duty does not apply, then that country will levy only the normal duty of 5% and the final destination country where the protection duty applies, will recover the balance of the duty. A unified list of goods comprising of over 400 items such as basic foodstuffs, personal effects and used household items has been approved by the GCC states to be exempt from customs duties. CONTRIBUTION TO KUWAIT FOUNDATION FOR THE ADVANCEMENT OF SCIENCES Kuwaiti Shareholding Companies (public and closed) are required to pay 1% of their profits after transfer to the statutory reserve and the offset of losses brought forward, to KFAS which supports scientific progress. NATIONAL MANPOWER SUPOORT TAX Under Law No. 19 of 2000 relating to supporting National Manpower and encouragement of National Manpower to work in Non-Government agencies, all shareholding companies listed on the Kuwait Stock Exchange are required to pay a 2.5% annual tax on the net profits.

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Other Taxes
ZAKAT

- Continued

Kuwaiti shareholding companies (public and closed) are required to pay 1% of net profit as Zakat. PERSONAL TAXATION There is currently no tax on personal income of individuals including salary income of employees. PROPERTY TAX There is no property tax in Kuwait. VAT / SALES TAX There is no VAT or sales tax in Kuwait.

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LEBANON TAX FACTS 2012

Lebanon Tax Facts 2012

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CONTENTS

Lebanon Tax Facts 2012

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Due to the fact that Lebanon is changing its tax regulations, this section will be completed in due course.

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OMAN TAX FACTS 2012

BDO Audit Suites 601 & 602 Penthouse, Beach One Bldg. Way No. 2601, Shatti Al Qurum PO Box. 1176, Postal Code 112, Sultanate of Oman Tel: +968 24649020 Fax: +968 24649030

Oman Tax Facts 2012

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CONTENTS
36 40 41 42 43 44 Corporate Income Tax Withholding Tax Personal Income Tax Social Insurance & Other Contributions Other Duties and fees Bi-lateral Tax Treaties

Oman Tax Facts 2012

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Corporate Income Tax


Income tax in the Sultanate of Oman has been in force since 1971 and is governed by the Law of Income Tax on Companies of 1981. In June, 2009, a new tax law was promulgated by Royal Decree 28/2009 which is effective from 1 January, 2010. The new tax law provided clarity on several provisions included in old tax law and eliminated disparity on the tax rates charged to local and non-GCC foreign companies. TAXABLE ENTITIES Taxable entities that are subjected to corporate tax are; Omani proprietorships, Omani companies and permanent establishments (pe). The term pe refers to foreign entities (including persons) carrying out activities in Oman, either directly or through a dependant agent. The new tax law has introduced a 90 days threshold limit of stay in Oman applicable to a period of twelve months for creation of pe for foreign persons engaged in activities of services. Under the new dependant agent pe concept, the activities of a dependant agent could create a pe for the foreign principal in certain cases. TAX RATE AND PAYMENT All taxable entities are subject to tax at rate of 12% on net taxable income over RO 30,000. Oil exploration and production companies are taxed under special rules covered by concessional agreements. Foreign taxes paid abroad can be set off against taxes due on the same income taxable in Oman. There are no advance payment procedures, and tax due should be paid with the provisional return on estimated taxable income and balance with final return. The liability of the payment of tax falls on the owner of the Omani proprietorship or the owner of the pe or an Omani company. Partners of joint ventures shall be jointly liable for the payment due. Any tax due and not paid by the due date shall attract additional amount of 1% per month.

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Corporate Income Tax


Continued
TAX RETURNS It is mandatorily required for all tax payers to register with the tax department within three months from the date of incorporation or assuming pe status. The tax year is the calendar year. Taxable entities are permitted to have a different tax accounting year than the calendar year. Provisional tax returns must be filed within three months from the end of the tax accounting year and final returns within six months. In respect of a foreign person who carries on business in Oman through multiple permanent establishments, a consolidated tax return should be submitted to the tax department. The accounts are required to be prepared in accordance with International Accounting Standards. TAX EXEMPTIONS Companies and establishments established with the fundamental purpose of industry, mining, agriculture, fishing, farming, agriculture, higher education institutions, schools and colleges and hospitals are exempt from income tax for a period of five years from the date of commencing production. The period of exemption may be extended provided that such extension does not exceed a further five years. Shipping companies registered in Oman are exempt from tax and foreign shipping companies carrying on business in Oman through authorized agent are tax exempted from the date of commencement of business on condition that reciprocal treatment is granted. Income realized by foreign airlines companies carrying out their activities in Oman through a established firm is exempt from tax. Dividends received against investment in equity, shares, portions or stocks in the capital of any other company established in the Sultanate of Oman. Profit made on sale of securities listed on Muscat Stock Exchange is fully exempt from tax. Income earned by joint investment accounts/mutual funds registered in Oman under the Capital Market Laws, or established overseas for dealing in shares and securities listed on Muscat Securities Market is exempt from tax.

Oman Tax Facts 2012

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Corporate Income Tax


Continued
DEDUCTIBLE EXPENSES Expenses are deductible if they are incurred wholly and exclusively for the purpose of generation of gross income. Any expenses if determined by the tax department as excessive to the related income will be disallowed to the extent of amount deemed to be excessive. Special rules apply to allowances, such as depreciation, bad debts, donations, shareholders/proprietors/directors remuneration, rent, interest, head-office overhead allocated to branches and agents/sponsorship fees. Provisions of any nature, whether specific or general, are not allowed as deductions for tax purposes. The tax department takes the view that a deduction will only be allowed when the expense is actually incurred. It is the normal practice that transactions entered directly or indirectly with related parties are closely scrutinized by the Secretariat General and adjustments are made in the computation of taxable income. ASSESSMENT All the tax returns submitted are subject to assessment within 5 years from the end of the tax year during which the final return is submitted. The Secretariat General can issue an assessment in the name of tax payer responsible for deduction and remittance in the event withholding tax which is due has not been paid within the due date. OBJECTION AND APPEALS The tax payer can make an objection against an assessment to the Secretary General of Taxation, within 45 days from the date of serving the assessment order. The assesses can also make an appeal to the Tax Committee against the decision of the Secretary General of Taxation Affairs within 45 days of notification of the decision issued by the Secretary General of Taxation. The assesses may also file a tax case before any court concerned to appeal against the decision issued by the Tax Committee.

Oman Tax Facts 2012

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Corporate Income Tax


Continued
CARRY FORWARD AND SET OFF OF LOSSES The new tax law requires that when a foreign entity carries on businesses through more than one pe, the loss of any of those pe for any tax year is allowed to carry forward only after being reduced by the taxable income for that tax year of other pe owned by that foreign entity. Losses are allowed to be carry forward for a maximum period of five years and are offset against future profits, except the losses relating to the first 5 years of exemption period are allowed to carry forward indefinitely until fully utilized.

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Withholding Tax
Withholding tax is a tax charged on certain specified payments accruing or arising in Oman to foreign companies which do not have a pe or such income does not constitute a part of the gross income of that pe. The specified payments are, a) Royalties (Include rental of equipment), b) Consideration for research and development, c) Consideration for the use of or right to use computer software, d) Management fees. Royalties referred above are defined as (1) consideration for the use or right to use of (a) intellectual or proprietary right either for artistic, literary or scientific work, including computer software, cinematograph films, or films or tapes or discs or any other media used for radio or television broadcasting, (b) patent, trademarks, drawings, model and secret process or formula, (c) industrial, commercial or scientific equipment, (2) consideration for information concerning industrial, commercial or scientific experience, (3) consideration for granting rights to work mineral or other sources of natural wealth. The taxpayer who has paid or credited any of the specified payments is responsible to deduct 10% tax from the gross amount paid or credited and the remittance should be made to the Secretariat General not later than 14 days from the end of the month following the month in which that amount is paid or credited, whichever is earlier. Delay in remittance in withholding tax to the tax department shall attract 1% additional tax per month of the tax due.

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Personal Income Tax


There is no personal taxation system for income, capital gains, gifts or inheritances in Oman and, furthermore, no requirements to file any form of tax return.

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Social Insurance and Other Contributions


SOCIAL INSURANCE Omani employees are protected by Social Security Law. Employers are required to register all Omani employees with the Public Authority for Social Insurance (PASI) and make monthly contribution of 10.5% of basic salary along with 6.5% contribution by employees (deducted from Omani employees salary). END OF SERVICE BENEFIT Expatriate employees at the completion of their employment contract are entitled to an end of service benefit which is calculated on the following basis: Fifteen days basic salary for every year of service for the first three years of continuous service; One month's basic salary for every year of service thereafter.

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Other Duties and Fees


CUSTOM DUTY Import of goods which originates from Non GCC countries are subject to a custom duty of 5% of import value. Equipment imported by companies for short duration or for the duration of the project are subject to import the equipment by paying the custom duty as deposit and are entitled to obtain refund after re-exporting the relevant equipment. OTHER TAXES/DUTIES Municipal tax is levied @ 5% on hotel income, 3% on property rents, 10% on leisure and cinema income and 2% on electricity bills exceeding RO 50 per month. Tourism levy of 4% and service charge of 8% are also charged on hotel income. A sewerage tax of 10% on water consumption is levied on houses using the drainage system. VALUE ADDED TAX Oman has no value added tax.

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Bi-lateral Tax Treaties


Oman has signed treaties for the avoidance of double taxation with the following countries. Algeria, Bangladesh, Belarus, Belgium, Brunei Darussalam, Canada, China, Croatia, Egypt, France, Germany, India, Iran, Italy, Kazakhstan, Lebanon, Malta, Mauritius, Moldova, Morocco, Netherlands, Pakistan, Russia, Seychelles, Singapore, South Africa, South Korea, Sudan, Syria, Thailand, Tunisia, Turkey, United Kingdom, Uzbekistan, Vietnam, Yemen. Note: Some of the above treaties are have not been ratified or not yet in force. Oman has also entered into treaties with several countries with respect to the avoidance of double taxation on income generated from international air transport.

45

QATAR TAX FACTS 2012

Gavin Brown Partner BDO Qatar 1st Floor, Tornado Tower PO Box 24139, Doha State of Qatar Tel: +974 44999 530 Fax: +974 44999 533 Email: gavin.brown@bdo.com.qa

Qatar Tax Facts 2012

46

CONTENTS
47 Registration with Tax Authorities 48 Corporate Income Tax 49 Withholding Tax on International Transactions

Qatar Tax Facts 2012

47

Registration with Tax Authorities


REGISTRATION In order to comply with the provisions of the tax law, all resident companies (Business with Permanent Establishments) are required to register with Qatar Public Revenues and Taxes Department (PRTD) within thirty days from the commencement of the activity; and to obtain a tax card (which will essentially be an ID card for tax purposes). A financial penalty amounting to QR 5,000 shall be imposed in the case of failure to register with the tax department on time. In registering companies for tax and subsequently issuing them with a tax card, the PRTD will require certain information from the taxpayer. PROCEDURES Every tax payer carrying on an activity in the State of Qatar shall submit an application from the date of effectively of the tax law for tax payers carrying on activity at that date in accordance with the limits, conditions and procedures provided for in the executive regulations of the tax law. REQUIREMENTS The process will require: gathering all relevant information required from the tax department; drafting and submission of the application to the department; liaising with the department and ensuring that all enquiries are answered promptly; and following-up with the department until the issue of the tax card.

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Corporate Income Tax


RATES OF CORPORATE TAX In general, the standard rate of corporate tax is 10% flat rate applied to the companys net taxable profits starting from the beginning of January 2010. THE CORPORATE TAX YEAR The rate of corporate tax is fixed in respect of the corporate tax year or the financial year. The company has the right to choose the date of year-end to issue its annual financial statements, regardless of the calendar year. Each year has to be accounted for separately. The first year is to start from the date of incorporation to the end of the following financial year (the financial period should not exceed 18 months). DEDUCTIBLE EXPENSES The general rule is that only expenses that are wholly and exclusively incurred in earning the income of the business are deductible. The cost and expenses have to be supported by proper documents. ACCOUNTING METHODS AND BUSINESS PROFITS A companys taxable income is based on its accounting profits, computed according to the International Financial Reporting Standards. FILING REQUIREMENTS The corporate tax return must be filed along with all supporting documents (e.g. Audited financial statements), within four months from the accounting year end, e.g. 30 April, for 31 December year-end. CARRY FORWARD LOSSES Losses are carried forward for deduction from subsequent profits for up to five years. DIVIDENDS There is no withholding tax on the payment of dividends, whether the recipient is resident or non-resident.

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Withholding Tax on International Transactions


BASIS OF TAXATION The new tax law has been applied from the beginning of year 2010 and it introduced a requirement to operate withholding tax on certain payments to foreign companies which are not resident or do not have a Permanent Establishment in Qatar. The obligation to deduct withholding tax applies to all businesses operating in Qatar regardless of whether they are 100% Qatari owned or partly foreign owned. (There is no exemption) RATES OF WITHHOLDING TAX Under the new law, businesses in Qatar must deduct withholding tax at the rate of 5% on payments of royalties and technical fees, and at the rate of 7% on payments of managerial, consultancy fees, directors fees, attendance fees and any other payments to non-residents for services carried out wholly or partly in Qatar. Payments for a pure supply of goods are not subject to withholding tax however if there is a service element involved, this portion would be subject to withholding tax. FILING REQUIREMENTS Businesses which deduct withholding tax from payments made to non-residents are required to remit this to the Tax Department by the 14th day of the month following the month in which the payment was made. Detailed letter will need to be provided to the tax department along with the payment and the payer will also need to issue a receipt to each of the parties from whom it deducted the withholding tax. Failure to deduct the withholding tax and remit it to the tax department by the specified date will result in a penalty for the entity equal to the amount of the withholding tax. This is in addition to payment of the withholding tax itself.

50

SAUDI ARABIA TAX FACTS 2012

BDO Dr. Mohamed Al-Amri & Co. P.O.Box.: 8736, Riyadh 11492 Tel: +966 1 278 0608 Fax: +966 1 278 2883 Email: info@alamri.com www.alamri.com

Saudi Arabia Tax Facts 2012

51

CONTENTS
52 53 56 57 58 Zakat Income Tax Withholding tax Other Taxes Social Insurance

Saudi Arabia Tax Facts 2012

52

Zakat
RATES OF ZAKAT Zakat is a religious tax, levied on Saudi nationals, wholly Saudi-owned companies and the Saudi shareholders share of profits of companies with foreign participation, in accordance with Islamic law "SHARIA". For this purpose, GCC nationals and companies are treated as Saudis. Zakat is payable annually on the higher of Adjusted Net Income or Zakat base (which is calculated in general on the net worth). The rate of Zakat is 2.5%. ZAKAT YEAR The rate of Zakat is fixed in respect of the corporate financial year. DEDUCTIBLE EXPENSES The general rule is that all actual expenses are deductible for Zakat calculation purposes. The cost and expenses have to be supported by proper documents. ACCOUNTING METHODS AND BUSINESS PROFITS Zakat is payable annually on the Zakat payer's total capital resources and income, excluding amounts invested in fixed assets. The rate of Zakat is 2.5%. FILING REQUIREMENTS Zakat return must be filed within 120 days from the accounting year end, e.g. 30 April, for 31 December year end. CARRY FORWARD LOSSES Where Zakat is calculated on the Zakat Base (net worth), losses are carried forward as part of the equity. Where Zakat is calculated on net Zakat adjusted income no offsetting of losses are allowed.

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Income Tax
REGISTRATION In the Kingdom of Saudi Arabia every person subject to tax shall register with the Department of Zakat and Income Tax before the end of its first fiscal year. RATES OF INCOME TAX A 20% income tax rate is applicable to the taxable income of non-Saudi individuals in business, companies registered in Saudi Arabia, and non-resident individuals and companies carrying business activities through a permanent place of business in the Kingdom. Income includes all income, profits, gains of any type and of any form of payment resulted from carrying out activity, including capital gains and any incidental income. A Natural Gas Investment Tax (NGIT) is applicable on any person, natural or corporate, Saudi or non-Saudi, taxable income derived from exploration, production, collection, treatment, transportation, processing and fractionation of natural gas, natural gas liquids and gas condensates. The NGIT rate for any taxable year is determined based on the internal rate of return on the cumulative annual cash flows of the taxpayer from the natural gas investment activities. Based on the NGIT rates table, the NGIT rate can range from a minimum of 30% for an internal rate of return of 8% to a maximum of 85% for internal rates of return of 20% and above. A tax rate of 85% is applicable to the taxable income from oil or other hydrocarbon production activity in the Kingdom. EXEMPT INCOME The following income types are exempt from income tax: a) capital gains realized from disposal of securities traded in the Stock Market in the Kingdom in accordance with controls specified in the By-law. b) gains on the disposal of property other than assets used in the activity. THE CORPORATE TAX YEAR The rate of corporate tax is fixed in respect of the corporate tax year or the financial year. The company has the right to choose the date of year-end to issue its annual financial statements, regardless of the calendar year. Each year has to be accounted for separately. The first and last year should be a short period unless otherwise is agreed with the tax authority.

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Income Tax
DEDUCTIBLE EXPENSES

- Continued

The general rule is that only expenses that are wholly and exclusively incurred in earning the income of the business are deductible. The cost and expenses have to be supported by proper documents. CAPITAL GAIN Capital gain derived from disposal of fixed and traded assets, or from disposal of shares in a resident company is subject to tax at 20%. The following incomes are exempt from income tax: (a) Capital gains realized from disposal of securities traded in the Stock Market in the Kingdom in accordance with controls specified in the By-law. (b) gains on the disposal of property other than assets used in the activity. ACCOUNTING METHODS AND BUSINESS PROFITS A companys taxable income is based on its accounting profits, computed according to the Saudi Accounting Standards, which is, to a great extent, compliant with the International Financial Reporting Standards (IFRS). Certain adjustments are required to be made to the accounting profit to arrive at taxable income. FILING REQUIREMENTS The corporate tax return must be filed along with all supporting documents (e.g. Audited financial statements), within 120 days from the accounting year end, e.g. 30 April, for 31 December year end. Partners in a partnership and professionals must submit their tax return within 60 days from the accounting year end.

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Income Tax

- Continued

CARRY FORWARD AND OFFSET OF LOSSES Losses are allowed to be offset equal to 25% of tax adjusted net income for the year. Losses can be carried forward indefinitely. In case of a change of fifty percent (50%) or more in the ownership or control of a company, the share of a non-Saudi may not be deducted in losses incurred prior to the change in taxable years following the change. Rules for Advance Payment of taxation Tax has to be paid in advance where previous year tax obligation is SR 2 million or more. In such case advance tax will be 25% of previous year tax obligation and has to be paid prior to the last date of sixth, ninth and twelfth month. DZIT has the power to reduce the amount of advance tax where the income for the year drops by 30%.

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Withholding Tax
Payments made to non-residents by a resident or a permanent establishment of a non resident, that are from a source in the Kingdom, are subject to withholding tax. Depending upon the nature of payment, the payer is required to withhold the tax at the following rates:
Tax Rate % Management fees Royalties, payments to head office or related parties for services Dividends, loan charges, insurance/reinsurance premiums, rental (lease), technical and consulting services, air tickets, air freight, shipping, and international telecommunication services Other payments Not to exceed 20 15

5 15

Technical and consulting services are deemed to be from a Saudi source even if they were performed outside the country. The person withholding the tax, irrespective of whether or not he is a taxpayer under the tax law, is required to register with the DZIT, and pay the tax so withheld within 10 days after the end of the month in which such payments are made. The payer is also required to issue a certificate to the payee stating the amount of payment and the tax withheld. At the end of each tax year, the payer is required to submit the names, addresses and other details of the payees to the DZIT no later than 120 days of the end of the fiscal year, and not later than 60 days of the end of the fiscal year for partnerships. Withholding tax is payable upon payment or deemed payment (clearance or settlement of accounts). The date of settlement is considered to be the date of payment unless the settlement is between related parties in which case it is the date of book entry. A delay penalty of 1% of the amount of unpaid withholding tax is applicable for each 30 days of delay from the due date of the tax till such time the tax is paid.

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Other Taxes
At present the following taxes are not imposed in the Kingdom: Personal tax on employee's remuneration Value-added tax Withholding tax of local transactions Estate and gift taxes

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Social Insurance
Social insurance in the Kingdom is administered by the General Organization for Social Insurance. Employers are required to make contribution for Saudi employees who are required to contribute the same percentage of their salary in respect of social insurance. In addition, employers are required to contribute 2% of the basic salary of both Saudi and non-Saudi employees to cover the job hazards risk. Certain categories of employees such as certain government employees, armed forces and diplomatic personnel, domestic servants etc are exempt from social insurance contributions SOCIAL INSURANCE RATE The rate of Social Insurance is as follows, showing the employer and employees portions: Amount Gross salary of Saudi employees (including benefits in kind) Basic salary of both Saudi and nonSaudi employees Employer % 9 2 Employee % 9 -

59

U.A.E. TAX FACTS 2012

BDO Chartered Accountants & Advisors Suite 305, Al Futtaim Tower Al Maktoum Street, Deira P.O. Box- 1961, Dubai Tel: +971 4-222 2869/ 228 5077 Fax: +971 4-227 4867/2270151 Email: priyesh.kapadia@bdo.ae

U.A.E. Tax Facts 2012

60

CONTENTS
61 62 63 64 65 66 67 68 Corporate Income Tax Salary Tax Social Insurance Sales Tax & Indirect Taxes Stamp Tax Withholding Tax on Local Transactions Capital Gain Tax Tax Treaties

U.A.E. Tax Facts 2012

61

Corporate Income Tax


RATES OF CORPORATE TAX There are decrees issued by each Emirate covering corporate tax and levying up to 55% based on the income slabs, but their enforcement has been limited to foreign banks and foreign oil companies only and there is no corporate tax for other entities registered in UAE, Further, entities registered in the Free Zone are exempted from tax for 25- 50 years as concession that is renewable. Foreign banks have been paying a 20% tax on net profits of each of their branches in the UAE and for foreign oil companies the amount of tax paid by an oil company is based on a rate agreed in an individual concession between the oil company and the respective Emirate.

THE CORPORATE TAX YEAR There is no corporate tax for other entities registered in UAE. Hence, there is no tax related filing obligations for the companies registered in the UAE other then foreign banks & oil companies. DEDUCTIBLE EXPENSES The general rule is that only expenses that are wholly and exclusively incurred in earning the income of the business are deductible. The cost and expenses have to be supported by proper documents. However as there is no corporate tax in the UAE, the significance of deductable expanses is limited. ACCOUNTING METHODS AND BUSINESS PROFITS There are no Local Accounting Standards in place and to a great extent the International Accounting Standard (IAS & International Financial Reporting Standards (IFRS) are being followed in the UAE. FILING REQUIREMENTS There is no tax related filing obligations for the entities registered in the UAE other then foreign banks & oil companies. DIVIDENDS There is no withholding tax on the payment of dividends. PAYMENT TO NON-RESIDENTS Since there are no withholding taxes in the UAE and there are no restrictions in transferring funds into or outside the UAE or payment to non-residents.

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Salary Tax
TAXATION

Individuals are not taxed in the United Arab Emirates; hence there are no taxes on salary income or personal income.

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Social Insurance
Dubai does not have obligatory state or employer-contribution insurance schemes. Nationals are automatically provided with extensive state help, including medical care, sickness and maternity cover, child care, pensions, unemployment benefit and in some instances housing and disability benefits. Foreign workers have access to medical facilities, but too little else. Private medical insurance is recommended for most foreigners.
PENSIONS

There are no state pension schemes in UAE for foreign expatriates. There are pension schemes for UAE nationals, which are covered under Law No 2 of 2000. The law defines salary for each of sector of entity. Contributions must be deducted from the salary. The contribution total is 26% comprised as follows: From the employee - 5% From the employer - 15% From Government - 6% The employer is responsible for collecting its and its employees contributions and remitting them to the pension fund. The Government pays its contribution as a separate issue directly to the pension fund. Central Auditing Bureau - for auditing Governmental bodies and public sector entities Central Bank of Egypt - for bank audits Egyptian Financial Supervisory Authority - for public quoted companies, and all non-banking financial institutions.

The services we provide include: - - Statutory audits - - Special purpose audits - - Internal audits - Internal control review

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Sales Tax & Indirect Taxes


There are no Sales taxes or VAT (Value Added Tax) in the UAE, but individual Emirates may charge levies certain services such as those provided in the hospitality industry.
Municipal taxes are charged in some of the Emirates. In Dubai a 10% municipal tax is charged on hotel revenues and entertainment. In all the Emirates, except Abu Dhabi, Income from renting commercial premises is taxed at a rate of 10%, from renting residential premises at a rate of 5%. Abu Dhabi does not levy a municipality tax on rented premises, but landlords are required to pay certain annual license fees.

TAXES ON INPUT For goods, There are no Sales taxes or VAT (Value Added Tax) in the UAE,

therefore there is applicability of taxes on inputs (Goods).

For services, There are no Sales taxes or VAT (Value Added Tax) in the UAE, therefore there is applicability of taxes on inputs (Services). INVOICES DETAILS

There is no specification with regards to Invoice formats; however the standard documentation will apply for invoices for import & export purposes.
EXPORTED & IMPORTED GOODS

Customs duty is levied at 5% on imports & exports of majority of products except tobacco & alcoholic beverages which are subject to duty at higher rates.
BASIS OF TAXATION

It is not applicable in the UAE.

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Stamp Tax
There is no stamp duty. However, there are various fixed transaction charges for processing of visa, work permit, notarization, vehicle registration and other services from Government departments
FILING REQUIREMENTS

As stamp duty is not applicable in the UAE, therefore there is no filing requirement of the same.

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Withholding Tax on Local Transactions


TAXATION

There are no withholding taxes in the UAE


WITHHOLDING TAX Dividends Interest Royalties Branch Remittance Tax FILING REQUIREMENTS Nil Nil Nil Nil

There are no filling requirements.

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Capital Gain Tax


TAXATION

There are no capital gain taxes in the UAE.


FILING REQUIREMENTS

There are no filling requirements.

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Tax Treaties
The UAE is a leading country with regards to agreements to avoid double taxation. These agreements bring about a positive impact on investment promotion, economic cooperation and trade between the UAE and other countries. The UAE has an extensive and growing list of double tax treaties, which are currently more than 50 countries.

The BDO network in Middle East countries:

BAHRAIN EGYPT KUWAIT LEBANON OMAN QATAR - SAUDI ARABIA U.A.E.

BDO Middle East Firms are independent firms registered in respective countries. The term partner is used to refer to our members and employees with an equivalent standing and qualification to one of our affiliated undertakings. BDO Middle East firms are members of BDO International Limited, a UK company limited by guarantee, and forms part of the International BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO member firms Copyright 2011 BDO International All rights reserved www.bdointernational.com