GCC Indirect Tax Weekly Digest

February 3, 2022

UAE developments

Corporate Tax to be introduced in the UAE for financial years starting on or after 1 June 2023

On 31 January 2022, the Ministry of Finance (MoF) announced that the United Arab Emirates (UAE) will introduce a federal Corporate Tax (CT) on business profits that will be effective for financial years starting on or after 1 June 2023.

The UAE Corporate Tax regime has been designed to incorporate best practices globally and minimize the compliance burden on businesses. Corporate Tax will be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with international accounting standards, with minimal exceptions and adjustments.

Whilst the law has not yet been issued, the UAE Federal Tax Authority (FTA) has publicly communicated the key design principle and policy choices of the new regime, which we have summarized in our recent alert.

Tax penalty relief extended to 31 December 2022

The FTA has announced an extension of one year for taxable persons to benefit from the redetermination of administrative penalties, with a new deadline of 31 December 2022.

The relief mechanism potentially provides taxable persons with a 70% reduction in penalties which were applied prior to the changes to the UAE tax penalty regime. For more information about the changes, please refer to Deloitte’s alert.

In order to benefit from the relief, the VAT-registered taxpayer would need to ensure that all tax due and 30% of the total unpaid administrative penalties are settled by 31 December 2022.

Dubai Customs publishes Customs Service Guide 

Dubai Customs has published a Customs Service Guideline which covers various services. The Service Guideline provides details on the service delivery procedure, including the timeframe for the completion of the service, the applicable fees and the required documentation.

Services include (not limited to) the following:

  • Registrations/Licensing (i.e. Request business registration, renewal and amendment).
  • Finance/Refund (i.e. Request duty account, account amendment, refund claim and claim cancellation). 
  • Certificate/Reports (i.e. Request client clearance certificate, landing certificate, no objection for customs broker).
  • Client Programs (i.e. Join accreditation program, authorized economic operator program).
  • Intellectual Properties (i.e. Request trade agency recording and trade marketing). 
  • Customs Clearance (i.e. Submit customs declaration, amendment, cancellation etc.).

For further information please refer to the following Service Guideline.

Maqta Gateway in Abu Dhabi has added Customs Inspection and Clearance services to the Advanced Trade and Logistics Platform

Maqta Gateway, the digital arm of AD Ports Group in Abu Dhabi, has included a new clearance processes for traders to oversee their complete cargo process via ATLP. In line with global requirements and standards, it also improves the relevant processes along with initiatives to promote trade in the Emirate and the UAE. The trade and logistic services include sea, land, air industrial and free zones. 

The processes have been implemented to support the time required of the import and transits. Specifically, simplifying the controls of the work as well as the operational and administrative burdens. The Maqta Gateway has included new services to support the above processes.

The services are as follows:

  • Directly linked to Abu Dhabi Customs;
  • Facilitation of trade in the emirates and worldwide;
  • Streamlines customs procedures; and
  • Digital transformation of trade and logistics in Abu Dhabi.

For further information please refer to the following link.

KSA developments 

ZATCA launches Customs Duty Refund Service

ZATCA has launched a Customs Duty Refund Service on their website which allows an importer of record (“IoR”) in the Kingdom of Saudi Arabia (KSA) to request for Customs duties or insurance fee refund. In order to claim the refund, the beneficiary of the service (all importers) will have the responsibility to provide a completed customs declaration as well as all related documents

ZATCA has provided steps-by-step guidelines for importers to apply for the duty refund. For the step-by-step guideline of the service please refer to the following link.

Bahrain developments 

NBR updates financial services VAT guide with cryptocurrency guidance

The Bahrain National Bureau for Revenue (NBR) has updated its financial services VAT guide to include a section on cryptocurrencies (section 2.9).

The additional guidance covers payment tokens, utility tokens, asset tokens, and hybrid tokens.

Payment tokens are defined as cryptocurrencies such as Bitcoin. The guide states that the exchange of tokens for legal tender or other tokens (and vice versa) are supplies of financial services exempt from VAT. 

Further, the use of tokens to acquire goods or services only represents a means of payment, and does not result in a supply of the token. Further, the supply of goods or services for which payment is made using payment tokens should be treated in the same way as if payment was made in traditional currency, and should follow the same VAT treatment.

The guide also addresses other scenarios arising from the use of cryptocurrencies and the resulting VAT treatment. 

Oman developments

OTA publishes General Guide and Guide for Consumers

The Oman Tax Authority (OTA) has recently issued two more guides in Arabic, to support businesses and consumers with VAT. 

The General Guide sets out the general principles of VAT in Oman, providing an overview of the VAT rules and procedures under the Oman VAT Law and the Executive Regulations. The Guide covers the approach the Tax Authority uses for determining VAT treatment on different types of supplies, and covers a wide range of topics - including VAT registration, scope of VAT, place of supply, tax invoices, input tax recovery, VAT compliance and record-keeping.  

The other Guide is specifically aimed at consumers and amongst other things details practicalities of display of prices by businesses, differences between tax invoices and so-called normal invoices, plus various other aspects like validation of VAT registration numbers. The Guide also sets out on how and when a consumer can raise a complaint regarding VAT issues to the Oman Tax Authority. 

Oman Customs publishes the new Customs Tariff

Oman Customs has published the new Customs Tariff on 1 January 2022 to be in line with the Harmonized System (HS) of the World Customs Organization (WCO). The list has been updated based on items that are exempted from customs duties in the Gulf Cooperation Council (GCC) Common External Tariff (including restricted and prohibited items of various codes). Such products consist of live animals, meat and edible meat, vegetable products, trees and other plants etc. 

For the updated Customs Tariff please refer to the following link.

Kuwait developments

KGAC publishes customs circular No. (3) of 2022 further to the customs circular issued on January 1st 2022 on the implementation of the unified tariff schedule of the GCC countries for the year 2022

The Kuwait General Administration of Customs (“KGAC”) has recently issued customs circular No. (3) of 2022, pursuant to which single-use nicotine cartridges, whether flavored or unflavored, as well as packages of liquids or gels containing nicotine (flavored or unflavored) shall be subject to customs duties at the rate of 100%.

The following table outlines details of the amendments made to Heading No. 2404 of Chapter (24) of the unified customs tariff system for the GCC States:


 HS  Code

Description as per the unified customs tariff for 2022



24 04 12 11

Flavored single-use nicotine cartridges



24 04 12 12

Unflavored single-use nicotine cartridges



24 04 12 13

packages of liquids or gels containing nicotine - flavored



24 04 12 14

packages of liquids or gels containing nicotine - unflavored



Egypt developments 

The Egyptian Customs Authority will stop issuing identification numbers (ACID) for shipments imported by any exporter that does not comply with the new rules, as of 15 February, 2022.

The Egyptian Customs Authority stated the following reason for the above decision:

“There are still some foreign exporters who export to the Arab Republic of Egypt and did not complete their verification process on CargoX platform, which disables them from uploading and sending shipment data and documents to Egyptian importers through the CargoX/NAFEZA, which makes it impossible for the Egyptian importer to start the customs clearance procedures for releasing of goods despite the issuance of identification numbers (ACID) for these shipments, which exposes both the exporter and importer to heavy losses.”

For more information on the new changes please refer to the following link

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.

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