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GCC Indirect Tax Weekly Digest
October 27, 2022
Amendments to the UAE VAT Law
The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published amendments to Federal Decree Law No. 8 of 2017 on Value Added Tax (the VAT Law).
The amendments are wide-ranging and impact 25 articles of the Law. This includes a notable amendment to the statute of limitation rules for Value Added Tax (VAT).
Based on the amended law, provided the FTA issues an audit notification before the end of the 5 year statute of limitation period, it will have a further 4 years to complete the audit into that period.
As the amended law makes it clear that a voluntary disclosure (VD) cannot be submitted to correct an error more than 5 years after the end of the tax period, taxpayers should focus any review on the earliest tax periods and ensure VDs are submitted if required, as the periods may remain open for audit beyond the time that errors can be corrected by the taxpayer.
Deloitte will shortly be publishing a separate comprehensive alert on the amendments to the UAE VAT Law.
VAT Refunds for Real Estate Developers
On 3 October 2022, the Board of Directors of the Zakat, Tax, and Customs Authority (ZATCA) issued Decision No. 04-08-22 providing guidance on how eligible persons under the Licensed Real Estate Developer (LRED) Scheme can obtain VAT refunds. This follows a previous update that was issued on 19 June 2022.
ZATCA has confirmed that VAT refunds can now be requested for eligible expenses incurred by LREDs. These expenses must have been incurred on or after the later of 4 October 2020 or the date the developer meets the key qualification requirements as an LRED.
The VAT refund application must be submitted to ZATCA through a quarterly or annual claim with respect to the year 2022. This is to be filed no later than 30 June 2023.
Developers who meet the criteria as LREDs but have not been able to obtain LRED status may also apply for tax refunds. They must demonstrate that their failure to obtain LRED status was for reasons beyond their control and in such cases the reclaims require ZATCA’s approval.
This is a helpful clarification which should facilitate securing legacy VAT refunds under the LRED regime and support developers who have not been able to secure an LRED status. Developers should action as a priority to meet the required deadline.
Oman VAT Executive Regulations amended
The Oman Tax Authority (OTA) has issued Decision No. 456 of 2022, amending the Oman Value Added Tax (VAT) Executive Regulations (Executive Regulations).
The Ministerial Decision was published in Arabic in the Official Gazette No. 1463 dated 16 October 2022 and is effective from 17 October 2022.
The amendments relate to the following topics;
- Time limit for issuing tax invoices;
- Electronic invoicing;
- Extension of exemption of financial services provided to non-financial institutions;
- Recovery of input VAT – documentation requirements;
- Clarification on refund by specified persons (e.g., foreign diplomats, international organizations, and the like); and
- Place of supply for provision of telecommunication services.
For a detailed overview of the amendments, please refer to Deloitte’s recent alert.
VAT checklist requirement for “large” and certain other taxpayers
We understand that the OTA has made it mandatory for all “large” taxpayers and certain others to submit completed “taxpayer checklists” together with VAT returns.
The OTA defines which taxpayers are “large” or otherwise are required to submit the checklists. It appears that businesses who are required to comply are not allowed to proceed with filing VAT returns without including a completed checklist and relevant documents.
The current VAT taxpayer checklist covers:
- 78 questions to be answered on transactions undertaken by the taxpayer during the tax period;
- Specific questions for each box of the VAT return;
- Transaction level information to be submitted on transactions, in prescribed formats; and
- Invoice copy of the 7 highest value transactions covering, output VAT, input VAT, reverse charge invoices, imports of goods, debit and credit notes.
KSA Tax Conference
We are pleased to invite you to attend our forthcoming KSA tax conference taking place in Al Khobar, Riyadh and Jeddah on Sunday 13, Monday 14 and Wednesday, 16 November 2022 respectively.
The topics that will be discussed include:
- Income tax, Zakat and Withholding Tax updates
- Dispute resolution and litigation
- BEPS Action Item (including Pillars 1 and 2) implementation update and the impact on KSA businesses
- Transfer Pricing developments and audits
- VAT, e-invoicing and Real Estate Transaction Tax
- Customs and Global Trade update with a focus on the roll out and implementation of the Authorized Economic Operator programme
- Business Digitization
To launch this event, please plan to join us for a light breakfast and networking from 8:30 am with our opening session beginning at 9:00 am and the main program concluding at 5:00 pm. You can also send us your list of questions ahead of the conference that we can tackle during our Q&A sessions.
The fee for attending the event is SR 1,500 plus 15% VAT and includes the training, materials and meals. The venue details will be communicated in the confirmation email. To register for the conference, please use the following link.
We look forward to having you at the conference.
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.