GCC Indirect Tax Weekly Digest
June 18, 2019
UAE VAT developments
FTA publishes new Decision on tax invoices and tax credit notes
The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published Decision No. 7 of 2019 on Tax Invoices and Credit Notes.
The new Decision sets out that where a taxable person is required to issue tax invoices and tax credit notes relating to different supplies, the tax invoices and tax credit notes may be included in a single document which clearly displays “Tax Invoice/Tax Credit Note”.
Further, the Decision states that tax invoices and tax credit notes do not need to include the physical address for either the supplier or recipient if the mailing address (i.e. P.O. Box) is included.
The Decision supersedes Decision No. 3 of 2018 on Tax Invoices and Tax Credit Notes and is effective from 1 January 2018.
This is a welcome announcement for businesses, which may allow the streamlining of existing documentation processes.
Self-service kiosks available for TRS refunds
The UAE FTA has announced that self-service kiosks have been introduced at all exit ports included in the Tourist Refund Scheme (TRS), in a move to support tourists in reclaiming eligible VAT efficiently.
The TRS was introduced in 2018 and allows overseas tourists visiting the UAE to recover a percentage of the Value Added Tax (VAT) incurred on eligible purchases made in the UAE.
20 June 2019 registration deadline for businesses with BHD 500k-5m in annual supplies
As per the Bahrain VAT registration phasing and thresholds, businesses making annual supplies between BHD 500,000 and 5 million are required to register for VAT by 20 June 2019.
Businesses with annual supplies are in this range that have not begun the VAT registration process should do so as a matter of urgency, to avoid the risk of significant penalties.
Excise Tax to apply on sweetened beverages from 1 December 2019
The Kingdom of Saudi Arabia (KSA) General Authority of Zakat and Tax (GAZT) has announced that Excise Tax will apply on sweetened beverages from 1 December 2019.
The GAZT Board of Directors previously approved amendments to the Excise Tax implementing regulations to expand the scope of Excise Tax in KSA to include the following:
- Sweetened beverages – 50%
- E-cigarettes – 100%
- Liquid used in e-cigarettes – 100%
According to the GAZT Decision dated 15 May 2019 announcing the amendments, Excise Tax is applicable with immediate effect on e-cigarettes and liquid used in e-cigarettes. The new announcement clarifies the date applicable for sweetened beverages.
Excise Tax implementation update
Please be aware that following on from our updates and alerts, Excise Tax went live last week in Oman on 15thJune.
Transition returns are due from taxpayers who hold a stock of Excise Goods on the day before the Excise Tax Law was implemented. These transition returns are, we understand, due within 15 days - i.e. by 30th June 2019. Payment of the Excise Tax due is also apparently to be settled by 30th June. Business who may have trouble paying should consider what options are available. The Oman Secretariat General for Taxation (SGT) has hinted that payment in installments may be acceptable.
SGT has released, via the import declaration form, the standard price list, although there is no price list for alcoholic products at the time of writing. The standard price list has already been revised twice by SGT; and there may well be further revisions before the end of this month. Any items missing from the list can be added or included for the purpose of the transitional return.
UAE Customs developments
Dubai Customs publishes further information on the Virtual Stock Guarantee
Further to the issuance of its Policy Notice (DCP 46/2019) on the availability of the Virtual Stock Guarantee (VSG) facility, Dubai Customs has published the associated application and declaration forms.
The VSG is a new facility to manage the required customs duty guarantee for qualifying re-exports of goods from Free Zones and Customs Warehouses when using ports of exit throughout the Emirate of Dubai.
To utilize the facility, Customs Warehouse holders and Free Zone companies must file the following application and declaration forms with Dubai Customs:
Customs Warehouse holders:
- Application for Virtual Stock Guarantee Facility for Public and Private Customs Warehouses Registered and Licensed in the Emirates of Dubai
- Declaration and Undertaking for Using Virtual Stock Guarantee Facility (Customs Warehouses
Free Zone companies:
- Application for Virtual Stock Guarantee Facility for Free Zone Companies Registered and Licensed in the Emirates of Dubai
- Declaration and Undertaking for Using Virtual Stock Guarantee Facility (Free Zone Companies)
Dubai Customs publishes Notice announcing the expansion of the Digital Tax Stamps scheme to further tobacco products
On 29 May 2019 Dubai Customs published a Notice on the Implementation of Marking Tobacco and Tobacco Products Scheme (CN7/2019).
In addition to Customs Notice CN5/2019, in respect of the prevention of importation of all types of cigarettes without a digital tax stamp from 1 May 2019, CN7/2019 states that the prevention of importation of all types of hookah molasses (also known as water pipe tobacco or shisha) and e-cigarettes without a digital tax stamp comes into effect as of 1 March 2020.
Importers of hookah molasses and e-cigarettes should be aware of the upcoming requirements and work with the FTA to obtain and apply the digital tax stamps on these product imports prior to 1 March 2020.
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.