Bahrain
Cryptocurrency guidance
Bahrain NBR updated their VAT financial services guide by adding a new section (no. 2.9) regarding the VAT treatment of the cryptocurrency transactions.
Introduction:
Crypto assets are virtual or digital assets or tokens operating on a blockchain platform, protected by cryptography.
There following types of tokens are recognized in Bahrain:
- Payment tokens
- Utility tokens
- Asset tokens
- Hybrid tokens
The exchange of tokens for legal tender or other tokens, and vice versa, are supplies of financial services and then treated as exempt from VAT.
The new section also covers the VAT treatment of all types of tokens recognized in Bahrain.
To access the updated financial services guide, visit.
Saudi Arabia
Oman
New VAT guidelines are published on the Oman Tax Authority website
In February 2022, The Oman Tax Authority published the following VAT guidelines:
- Oil & Gas
- Transportation (In Arabic only)
- Related Persons (In Arabic only)
- Reverse Charge Mechanism (In Arabic only)
Extension of Zero-rated food items list
On 13 March 2022, The Oman Tax Authority published decision no. 89/2022 extending the basic food items list which is subject to VAT at zero rate.
The new zero-rated food items include additional 25 items which will be subject to zero-rate, thus the updated zero-rated food items will include 513 commodities.
You can download the news list of zero-rated food items, here
Also, for your reference you can download the existing list of 488 items, here
United Arab Emirates
UAE introduces corporate tax for financial years starting on or after 1 June 2023
On 31 January 2022, the UAE Ministry of Finance (MoF) announced the introduction of a federal corporate tax (CT) in the UAE that will be effective for financial years starting on, or after, 1 June 2023.
The CT rates are:
- 0% for taxable income up to AED 375,000
- 9% for taxable income above AED 375,000
- Different tax rates for large multinationals that meet specific criteria set with reference to 'Pillar Two' of the OECD Base Erosion and Profit Shifting project
Businesses engaged in the extraction of natural resources will remain subject to Emirate-level corporate taxation and be outside the scope of UAE CT. Information on other UAE CT exemptions and exclusions will be provided in due course.
High-level details on the proposed CT regime are set out by MoF in the press release
A new Corporate page has been included on the FTA website
Updated Voluntary Disclosure user guide
The FTA has published an updated guide of the Voluntary Disclosure.
The updated guide includes new two sections related to the tax groups:
3.3. Voluntary Disclosure for Tax Groups
The new section clarifies that Voluntary Disclosures for tax groups can be submitted by the representative member of the tax group, and other members can only view the submitted disclosures.
3.4. Voluntary Disclosure for Deregistered Tax Groups
The last representative member of a deregistered Tax Group will submit the Voluntary Disclosure and see the tabs for managing the Voluntary Disclosures and Tax Assessments and for making payments for liabilities that may arise after the Tax Group was deregistered.
You can access the new guide, here
The tax penalty relief timeline has been extended to 31 December 2022
On 30 December 2021, a new Cabinet Decision No. 108/2021 was issued regarding the extension of the timeframe for taxpayers to benefit from the 70% redetermination of administrative penalties until 31 December 2022 (The previous deadline was until 28 June 2021)
This relief provides taxpayers a 70% reduction on their penalties which were applied prior to the changes to the UAE tax penalty regime.
New Public Clarification “TAXP004
The FTA published a new Public Clarification “TAXP004” which replaced Public Clarification “TAXP002” on redetermination of administrative penalties levied prior to the effective date of the Cabinet Decision No. 49 of 2021.
The new clarification mentioned that all the following conditions have to be met in order for the VAT-registered taxpayer to benefit from the relief:
1 | The administrative penalties have been imposed before 28 June 2021 as per the Cabinet Decision No. 40 of 2017 |
2 | The administrative penalties have been imposed in full before the effective date of the Decision (28 June 2021) |
3 | The taxable person has undertaken any of the following: |
3.1 | Settling the following amounts by 31 December 2021 |
3.1.1 | All payable tax up to 31 December 2021, regardless of whether such tax was payable before or after 28 June 2021 |
3.1.2 | 30% of the total unsettled administrative penalties referenced above which were imposed before 28 June 2021 |
3.2 | Settling the following amounts by 31 December 2022: |
3.2.1 | All payable tax up to 31 December 2022, regardless of whether such tax was payable before or after 28 June 2021 |
3.2.2 | 30% of the total unsettled administrative penalties referenced above which were imposed before 28 June 2021 |
To access TAXP004, visit
VAT Public Clarification on mobile phones used for business purposes
The FTA published a new VAT Public Clarification on mobile phones, airtime, and data packages made available to employees for business use “VATP028”
VATP028 clarifies that input tax is recoverable only where the employer has a strict policy in place to restrict the use of such Phones, Airtime, and Packages for business purposes only.
Note that backdated policies shall not be accepted and must have already been in place to be considered as recoverable input tax.
To access VATP028, visit
Egypt
New amendments to the VAT Law
On 26th January 2022, new amendments (law no.3 of 2022) were published in the Egyptian official gazette effective 27th January 2022.
Below is a summary of the major amendments introduced to the VAT law no. 67 of 2016:
- Medicines and the relevant production materials, vaccines, blood and its derivatives, and family planning products are exempt from VAT.
- Suspending the payment of the VAT on machinery and equipment imported or purchased from the local market for industrial production use for a period of one year from the date of the customs release or local purchase.
- Agricultural products such as seeds, seeds, seedlings, vegetables, and fruits produced locally are exempt from VAT
- Services provided by the Suez Canal authority for the transiting ships, including the transit fees are exempt from VAT
- Tax refund for foreigners leaving the country for their purchases in case the amount is not less than EGP 1,500 for each invoice
- Introduced a new simplified registration system and the registration for reverse charge purposes.
You can download the new amendments, here
Paper invoices are not accepted for deducting or refunding VAT from January 2022
On 10th March 2021, The Egyptian Tax Authority (ETA) announced that with effect from 1st January 2022, paper invoices will no longer be accepted for deducting or refunding VAT.
The Minister of Finance issued a decision to add a new paragraph to Article 38 of the Executive Regulations for the VAT Law which states that only electronically issued invoices (e-invoices) will be accepted, with the exception of invoices issued before the obligation to implement the e-invoices system and invoices issued by companies that ETA has exempted from e-invoicing.
E-invoicing implementation timeline in Egypt:
You can access the latest announcement from the ETA, here.
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