Financial services VAT in Bahrain. KSA Transfer Pricing regulations. Tax Disputes Resolution Committees in the UAE. Oman Excise Tax Law. Read on for the most recent tax-related developments from across the Gulf Cooperation Council (GCC).
Guidance on VAT treatment of financial services
Following the publication of the VAT Financial Services Guide by the National Bureau for Revenue (tax authority in Bahrain), all three of the GCC countries that have introduced VAT have now published guidance on the VAT treatment of financial services in their respective jurisdictions. The definition of financial services and the scope of the VAT exemption are not entirely the same in all three countries. It is important for businesses to understand the differences in treatment across the respective countries in order to minimize inadvertent VAT leakage. Read more.
Saudi Arabia (KSA)
1. Issuance of Transfer Pricing regulations
The deadline for many companies to file the first disclosure of related party transactions to the tax authority (the General Authority of Zakat and Tax or GAZT) is 30 April 2019 pursuant to the Transfer Pricing (TP) regulations issued in February 2019. The regulations mainly set out the affected parties, documentation and reporting requirements, and the acceptable TP methods. They apply to controlled transactions (between related parties) to which taxpayers are a party during the fiscal year ending 31 December 2018 onwards. Read more.
2. Publication of draft law on C-Zones
The GAZT has also released a draft of the Special Cloud Computing & Informational Technology Zone Law. Under the Law, one or more Special Cloud Computing Services & Electronic Zones (C-Zones) shall be created in the KSA. The draft clarifies the treatment of C-Zone activities and the position of C-Zone entities for income tax purposes, particularly in the application of Double Tax Treaties. Businesses can submit feedback on the draft law via firstname.lastname@example.org.
United Arab Emirates (UAE)
1. Guidance on VAT refund scheme for foreign businesses
The UAE Federal Tax Authority (FTA) has issued detailed guidance on the conditions and procedures for foreign businesses (i.e. non-residents) to claim a refund of UAE VAT. Only companies that are located in a country that is on the approved list and that has a VAT system can claim a refund. Read more.
2. Tax Disputes Resolution Committees in Dubai and Sharjah
Following a ministerial resolution, Tax Disputes Resolution Committees have been put in place for the emirates of Sharjah and Dubai. The Sharjah Committee has jurisdiction to handle objections from taxpayers registered in all the emirates except for Dubai and Abu Dhabi, whilst the Dubai Committee has jurisdiction to consider objections from taxpayers registered in Dubai. A committee has yet to be formed for taxpayers registered in Abu Dhabi. Read more.
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