GCC Indirect Tax Weekly Digest

October 14, 2022

UAE developments

FTA to launch new integrated tax platform in November 2022

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has announced that a new integrated tax platform will be launched later this year.

The new platform, called ‘EmaraTax’, will provide online access to a number of FTA services, a simplified and streamlined user experience, and a range of self-help and service request options.

EmaraTax will be integrated with other government entities such as the UAE Central Bank and UAE PASS to leverage data and simplify processes. In addition, a mobile application will be launched after the EmaraTax platform goes live in November 2022.

The FTA stated that in the upcoming weeks, additional information will be released about EmaraTax and how to transition to the new platform.

The EmaraTax platform comes as part of the FTA’s ambition to be a leading digitalised tax administration and contributes to the UAE Digital Government Strategy 2025.

KSA developments

Phase two of the e-invoicing implementation in KSA

E-invoicing was introduced last year in the Kingdom of Saudi Arabia (KSA). Phase one of the implementation, the generation phase, was issued on 4 December 2021. Phase two of the implementation, the integration phase, will go live on 1 January 2023. This phase will require taxpayers to integrate their invoicing systems with the Zakat, Tax and Customs Authority (ZATCA) Fatoora Portal in a number of structured waves.

To deal with phase two and to ensure compliance with the regulations, businesses will require detailed systems and processes in addition to considering other changes.

Given the importance of this update, Deloitte held a webinar on Monday, 5 September 2022 where our tax specialists discussed phase two of the e-invoicing implementation and the steps businesses can take now to ensure compliance with the regulations.

To access the recording of the webinar, please visit this link.

Trading and financing through commodities in KSA

There has been a recent upward trend in the commodities trading and financing market across the Gulf Cooperation Council (GCC) region, including the KSA. As a result, businesses are now developing products and services to cater to the growing need. 

Some of these products are technology focused and have resulted in more complex and fast paced trading involving counter-parties that do not have a presence in the Kingdom.

This has resulted in a range of potential risk areas for commodity market participants including:

  • Value Added Tax (VAT) registration obligations for non-resident traders
  • Overseas VAT registration obligations for KSA traders/financial institutions
  • Input VAT recovery for financial institutions
  • VAT registration for a branch
  • Trading platforms

We have therefore published an article to highlight the potential risk areas for commodity market participants and our key Indirect Tax services offerings available to businesses operating in KSA. 

Oman developments

OTA publishes VAT guide on transactions by or through agents

The Oman Tax Authority (OTA) has published a VAT guide on what they refer to as ‘commercial agencies’, clarifying the OTA’s approach to transactions involving principal and agent. 

This is particularly important for those businesses that supply goods or services through an agent, or act as agent on behalf of another party. The guide sets out the VAT implications of so-called ‘disclosed’ and ‘undisclosed’ agency arrangements – setting out a methodology for analysis as well as transaction flows, focused on which party has the authority (or obligation) to issue tax invoices.

The guide goes into some detail over how the OTA views transactions that qualify as a ‘reimbursement’ or ‘disbursement’ for VAT. The terminology is important: reimbursements are generally treated as supplies subject to VAT at the standard or zero rate, whereas disbursements are normally outside the scope of VAT. This guidance should be reviewed by taxpayers and businesses to ensure that the correct treatments have been adopted – especially transactions involving recharges, cross-charges within a corporate group, cost recoveries and the like. 

The guide is currently available in Arabic here.

Middle East Tax Handbook
All you need to know about the tax landscape in the Middle East

We are pleased to present the 2022 edition of the Deloitte Middle East Tax Handbook – a comprehensive guide to help you keep abreast of the regional tax rates and regimes. 

Digitization of tax, sustainability measures, workforce mobility, other ambiguities on the global tax landscape and the changing local tax environment are fundamentally shifting how the tax function operates. Tax leaders must become strategic advisors while maintaining flawless compliance.

Over the past year, governments in the region have shown their commitment to transform their economies into mature markets aligned with global best practices. Taxpayers in the region are facing this reform during a time of unparalleled pressures of the fast-paced global regulatory changes. 

In order to navigate the changing landscape, businesses need to be resilient in dealing with the immediate impacts, as well as prepare for what is yet to come.

The Deloitte Middle East Tax practice is committed to supporting its clients and business partners in these challenging times. We hope that the Middle East tax handbook will prove useful to businesses who are looking to invest in the region, as well as those who are already present, but are looking to undertake a review of their tax position.

To access the 2022 Deloitte Middle East Tax Handbook, please click here.

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