GCC Indirect Tax Weekly Digest

KSA developments

Saudi Customs announces a “self-correction” initiative on customs declarations for 6-months

The Kingdom of Saudi Arabia (KSA) Customs Authority (Saudi Customs) has announced that it will allow for the “self-correction” of customs declarations for a limited period of time.

In line with Saudi Customs vision to enhance opportunities for Saudi based businesses and increase transparency, the initiative supports the promotion of voluntary disclosures in relation to customs declarations, without exposure to potential penalties.

The announcement indicates that in making a qualifying “self-correction” within the 6-month period starting from January 1st 2020, businesses may make corrections to declarations where there is an error and should not be subject to customs penalties. This will only be applicable when Saudi Customs has neither initiated nor issued a notification for an audit.

Although Saudi Customs’ announcement does not mention a fixed duration for the declaration correction, we expect Saudi Customs would accept corrections made to declarations within the timeframe of the past 5-years.

The error correction may include changes to details such as: value, origin, and the classification of the goods. In the process of making the self-correction, taxpayers should ensure that they have the proper documentation to support and explain the changes.

This approach is to be warmly welcomed and should be of great benefit to importers as it allows them to take a considered look at their current activities to determine whether they are in full compliance. This is especially relevant particularly around the classification and origin of goods, where the typical use of third-party clearing agents can sometimes lead to inaccurate reporting.  We strongly recommend that taxpayers act now to take advantage.

UAE developments

FTA publishes new Cabinet Decision on VAT refunds related to Expo 2020

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has published a new Cabinet Decision relating to Expo 2020 Dubai.

Cabinet Decision No. 1 of 2020 sets out the rules relating to Value Added Tax (VAT) refunds which may be requested by Official Participants of Expo 2020 Dubai in relation to expenses incurred in exhibiting at the event.

Official Participants are defined as countries and intergovernmental organizations which have received and accepted the official invitation from the UAE government to participate in Expo 2020 Dubai in a non-commercial capacity as an exhibitor.

The Cabinet Decision is similar to and cancels Cabinet Decision No. 1 of 2019.

The new Decision appears to expand the scope of eligible expenses to expenses in connection with all operations, services and activities provided for the purpose of participation in Expo 2020 Dubai, whether located within or outside the boundaries of the Expo 2020 site (Article 2(1)(d) of the Decision).

The Decision also details the process for submitting a refund application and the required supporting documentation.

FTA announces online platform for VAT refunds on new residences built by UAE citizens

The FTA has published a press release announcing the introduction of an online platform for VAT refunds relating to new residences built by UAE citizens.

This follows the FTA’s recent publication of an updated version of its New Residences VAT Refund user guide.

The guide details the process whereby UAE nationals may request a VAT refund on certain expenses related to the construction of a new residence in the UAE.

Refunds may be requested via the FTA’s e-Services portal, and the new version of the guide provides details about this process and the required documentation.

The update replaces the previous manual process, whereby a form and supporting documentation were to be submitted by email to the FTA.

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.