GCC Indirect Tax Weekly Digest

UAE developments

FTA publishes VAT Administrative Exceptions user guide and application form

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published a user guide on VAT Administrative Exceptions, and a corresponding application form.

Administrative Exceptions are the mechanism by which the FTA may provide registrants with concessions/exceptions allowed by the UAE VAT legislation, depending on the registrant’s circumstances and eligibility.

These potential exceptions are limited to:

• Tax invoices;
• Tax credit notes;
• Length of tax period;
• Stagger; and
• Extension of time for the export of goods.

Businesses that obtain Administrative Exceptions may be able to streamline VAT processes and increase efficiency, as well as decrease the risk of non-compliance.

KSA developments

Impacted taxpayers to register for Excise Tax in respect of sweetened beverages

Following from the announcement that Excise Tax will apply on sweetened beverages in the Kingdom of Saudi Arabia (KSA) from 1 December 2019, impacted taxpayers can register for Excise Tax online. 

Although Excise Tax is not due to apply on these products until 1 December 2019, it is recommend that the registration process is initiated as soon as possible in order to avoid any delays or complications.

Importers of cigarette products able to apply for Tax Stamps

As per the KSA Tax Stamp timeline, importers of cigarette products in KSA may apply for Tax Stamps to apply to the packaging of their products.

From 23 August 2019, no cigarette products without a Tax Stamp will be allowed to be imported into KSA, and from 18 November 2019, no cigarettes can be sold anywhere in KSA unless they carry a Tax Stamp.

The Tax Stamp system is intended to monitor Excise Tax compliance and to combat the illicit trade of designated excise goods.

The KSA General Authority of Zakat and Tax (GAZT) has indicated that initially, Tax Stamps will apply to cigarette products, then to other tobacco products (such as shisha tobacco), and then to excisable soft drinks and energy drinks. GAZT will announce the timeline for Tax Stamps to apply to all specified excise goods before the end of 2020.

Oman developments

Excise Tax implementation update: Transitional return due and change of rate on alcohol

Excise Tax went live in Oman on 15 June 2019, and according to the official Decision by the Minister, the rates of Excise on products are carbonated drinks at 50%, and tobacco, energy drinks, pork and alcohol were set at 100%.

However, rumors in the market place, which have now been confirmed by SGT staff, are that the rate on alcohol will be 50% of the retail sales price for a period of at least six months.

The officials have stated this is to combat smuggling and to monitor the impact on the market. This has not been confirmed by any official announcement and we understand that there may not be forthcoming in the immediate future.

Further, transition returns are due from taxpayers who held a stock of any Excise Goods on the day before the Excise Tax Law was implemented as well as the payment of the Excise Tax due by Sunday 30 June 2019 later this week.

Currently the format of the return has not been released. SGT have also indicated that any business having trouble paying excise amounts due by 30 June 2019 may be able to agree payment terms.

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.