GCC Indirect Tax Weekly Digest
November 24, 2020
FTA publishes VAT Public Clarification on Dubai Owners’ Associations and Management Entities
The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published a Value Added Tax (VAT) Public Clarification on Dubai Owners’ Associations (OAs) and Management Entities (MEs).
VATP022 clarifies the VAT implications of Law No. 6 of 2019 Concerning Ownership of Jointly Owned Real Property in the Emirate of Dubai. As a result of Law No. 6 of 2019, Dubai OAs no longer make taxable supplies and are, therefore, required to deregister for VAT.
On 3 November 2019, all rights and obligations of Dubai OAs were transferred to MEs, and OAs were required to apply for deregistration within 20 business days (by 4 December 2019), with penalties applicable for late deregistration.
The Public Clarification further states that MEs are not considered agents managing a building on behalf of the owners of the units, but instead as the person supplying goods and services to the owners of the units in a Jointly Owned Real Property which are taxable at the standard rate of 5%. The MEs are therefore required to fulfill the relevant VAT compliance and reporting requirements.
Specialist court established in Abu Dhabi for tax evasion and money laundering cases
A new specialist court has been established in Abu Dhabi specialising in money laundering and tax evasion cases. The establishment of the new court comes as part of the Abu Dhabi Judicial Department’s goal of supporting the specialisation of the judicial system, particularly in relation to the complex topics of tax evasion and money laundering.
Article 26 of the FTA’s Federal Law No. (7) of 2017 on Tax Procedures sets out situations which would be considered tax evasion, and involve deliberate non compliance with the tax legislation.
Dubai Customs publishes Notice on procedures for clearance of goods consumed within free zones
Dubai Customs has published Notice No. (17/2020) on procedures for clearance of goods consumed within free zones.
The Notice states that goods used and consumed within free zones for the establishment, operation, and maintenance of projects and facilities functioning therein which enable businesses to carry out their activities or produce goods or services within the free zones will not be subject to customs duty.
Goods which are brought out of the free zone and sold to the local market, or consumed in free zones for reasons other than those mentioned above, will be subject to customs duty.
The Notice includes examples of goods under each scenario, as well as details about the procedures to be completed when consuming goods.
Virtual VAT academy
Deloitte has launched its Oman virtual VAT academy which includes a series of webinars specifically designed to support those in Oman with their VAT implementation journey. Industry specific, technical and practical implementation tips and advice feature in these sessions, being held on a bi-weekly basis. Formal invites with all event particulars will be shared with you imminently.
Additionally, Deloitte has a dedicated team of VAT experts who can help your business navigate this tax reform by ensuring you understand the impact of all requirements, and provide practical, effective implementation support. Get in touch now – once again if you need input please contact Shaishav Udani, A. S. Saicharan or Sunita Taijwani.
We would also like to wish you all well on the occasion of the 50th National Day celebrations and holidays later this week.
This digest is for information purposes only and should not be construed as advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.