The Middle East and Africa regions
Customs & global trade challenges and cost savings opportunities
Webcast | 2 February 2021 | 10.00-11.00 am
About the webcast
The Middle East corridor and Africa have recently raised a number of challenges in terms of customs, excise duty, and VAT. On the one hand, the relevant provisions are subject to regular changes and therefore not easy to grasp. On the other, traditionally customs clearance has been widely outsourced to customs agents and 3PL service providers in these regions. For both of these reasons, (multinational) companies with business in these regions are not easily empowered to take these matters into their own hands.
While the in-house management of customs, excise duty, and VAT is not particularly low-hanging fruit to harvest, the effort is clearly worthwhile. Here are a few key updates and changes that require attention from businesses operating in these regions:
- In line with the other members of the Gulf Cooperation Council (UAE, Kuwait, Qatar, Bahrain, and Oman), the Kingdom of Saudi Arabia (KSA) initially agreed on a nationwide value-added tax rate of five percent. KSA raised its VAT rate to 15% on 1 July 2020.
- Saudi Arabia also implemented an increase in customs duty rates for an extensive range of goods as of 20 June 2020.
- In addition, the KSA General Authority of Zakat and Tax (GAZT) has approved an amendment to the excise tax executive regulations that expands the scope of excise taxes to include certain additional products.
- Saudi Customs is the latest customs administration to introduce an Authorized Economic Operator (AEO) program with the aim of modernizing border clearance and supporting the goals of trade facilitation outlined in “Vision 2030”, a national blueprint for the Kingdom of Saudi Arabia to achieve its long-term goals and expectations.
- The VAT system in Oman comes into force in April 2021.
- Under South African VAT law, goods must be exported by a qualifying purchaser (indirect exports) in order to zero-rate export sales. Until recently, the general industry practice has been for the local supplier to be recorded as the exporter of goods on the export declaration. However, a recent interpretation note by the South African Revenue Service (SARS) reveals that the qualifying purchaser must register with SARS as a foreign exporter in order to qualify for zero-rating. This ruling introduces a registration requirement for foreign buyers as well as impacting costs for buyers not willing to register with SARS.
- The Africa Continental Free Trade Area Agreement (AfCFTA Agreement), the largest free trade agreement since the WTO was created, comes into force on 1 January 2021. Once operational, businesses across Africa will be accorded preferential market access for goods and services traded within the African continent. Businesses looking to take full advantage of the benefits accompanying the agreement should evaluate, whether, what, where, and how they trade relative to the AfCFTA Agreement requirements.
- A comprehensive review of the East African Community Common External Tariff is ongoing, with a key change being the introduction of a new upper tax band rate of either 30% or 35%. Currently, there are three duty rates at 0%, 10%, and 25%. The review is expected to complete by mid-2021 and may result in higher import duties for some products, while there may be tax savings for others.
Registration for the webcast on
2 February 2021
What we can do?
We will address implications from the issues listed above as well as related indirect tax risk points in our upcoming webcast, which is held by our Deloitte Middle East & Africa customs, excise duty, and VAT experts:
- Fernand Rutten, Middle East & Africa GTA Leader
- Olebogeng Ramatlhodi, Africa GTA Leader
- Maarten Schreuder, KSA VAT Partner
- Mourad Chatar, TP and GTA Director
- Reshma Sharma, GTA and VAT Senior Manager,
The webcast will be hosted by Michael Schäfer and his Deloitte Germany Global Trade Advisory Team.
For further details of our DME GTA practice and the services we offer, please find attached the Middle East GTA placemat.
Tuesday, 2 February 2021
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Participation is free of charge
For further infoformation please contact Michael Neumann.
We are looking forward to an informative webcast and exchange with you.