GCC Indirect Tax Weekly Digest

UAE developments

FTA publishes Decision on maximum cash VAT refunds under Tourist Refund Scheme

The UAE Federal Tax Authority (FTA) has published a Decision on the maximum amount of cash VAT refunds allowed under the Tourist Refund Scheme (TRS).

FTA Decision No. (1) of 2019 sets out that cash VAT refunds under the TRS are limited to a maximum of AED 7,000 per overseas tourist per 24 hours. The Decision is effective from 1 June 2019.

KSA developments

GAZT publishes guide on Tax Ruling requests (Arabic)

The Kingdom of Saudi Arabia (KSA) General Authority of Zakat and Tax (GAZT) has published a Guide on Tax Ruling requests in Arabic.

The guide provides an overview of the process for applying for a Ruling (also known as an “interpretive decision”) from GAZT which is intended to clarify its interpretation of the KSA tax legislation under specific circumstances. This includes the Value Added Tax (VAT) and Income Tax legislation.

GAZT may issue Private Rulings, where a response is provided to the applicant only, or Public Rulings, where an anonymized version of the Ruling may be published and made available as guidance for others.

Helpfully, Ruling requests may be submitted in either English or Arabic, but the GAZT may request a certified translation of any request or supporting documentation in Arabic if it considers this necessary. In order to submit a Ruling however, the taxpayer requesting one must be registered or registrable for VAT purposes in KSA. It should also be noted that Rulings are not binding on the GAZT. One would hope that on the basis that full information/disclosure has been provided, that the expectations of taxpayers can be met in this regard.

The Ruling request process can be complex, as there are significant information and documentation requirements.

Deloitte can assist your business with the preparation and submission of Ruling requests in KSA and we have so far helped many businesses in this area.

Bahrain developments

NBR updates technical FAQ on input tax recovery and related persons

The Bahrain National Bureau for Revenue (NBR) has updated the technical FAQ on its website with additional guidance on input tax recovery on mobile phones and vehicles, and on related persons for VAT purposes.

Mobile phones/vehicles

• If mobile phones or vehicles are available for personal use in addition to business use, input VAT must be allocated between business and personal use.
• Apportionment must be based on actual usage, under written policies and procedures, or under the simplified method.
• Input tax can only be recovered on mobile phone costs if the actual business use of the phone exceeds 50%.
• The simplified method is as follows:
  • Vehicles – fixed input VAT recovery of 40% on all costs.
  • Mobile phones – fixed input VAT recovery of 60% on all costs (subject to 50% actual business use requirement).

Related persons

• Employers and employees are considered related persons for VAT purposes under Article 22 of the Bahrain VAT Law.
• Employers registered for VAT making supplies for consideration to their employees may be required to value the supply at fair market value.
• Where the supply is made for no consideration, the deemed supply provisions would apply.

Oman developments

Excise Tax Transitional Return now available

The Oman Secretariat General for Taxation (SGT) has announced that the Excise Tax Transitional Return is now available and can be accessed on the e-services portal of the SGT website. There is also a guide available on how to complete the return.

All businesses that held any stock of Excisable Goods on transition to the new tax on 15 June 2019 must submit an Excise Tax Transitional Return and pay any Excise Tax due by 15 July 2019.  

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.