GCC Indirect Tax Weekly Digest

UAE FTA confirms tourist refund scheme system is in final stages

The United Arab Emirates (UAE) Federal Tax Authority (FTA) issued a press release stating that the electronic system to be used for the VAT tourist refund scheme is in the final stages of preparation.

According to the FTA, retailers will need to contract with the system operator to implement the integrated digital system to enable the VAT refund process for their customers.

To qualify for a tax refund under the tourist refund scheme, the FTA has confirmed the following conditions should be met:

• The goods need to have been supplied to the tourist within the UAE;
• The tourist must intend to leave the country with the supplies within 90 days from the date of supply;
• The goods must be exported from the UAE by the tourist within 3 months of the date of supply;
• The goods must have been purchased from a retailer registered in the system, and the purchase process must meet the requirements determined by a decision of the FTA Chairman (including documentation requirements); and
• The goods must not be accepted from refund.

Tourists will submit claims to the system operator directly from designated spaces.

UAE retailers should assess now whether they should seek to register for the scheme. As a first step, please note the requirement that retailers will need to contract with the system operator to implement the integrated digital system to enable the VAT refund process for their customers.

FTA publishes guide on Designated Zones and Public Clarification on entertainment services

The FTA has published a guide on the VAT treatment of Designated Zones, and a Public Clarification on non-recoverable input tax on entertainment services.

The release of the guide on Designated Zones is a significant development as it provides a level of clarity on the application of VAT on transactions with businesses established in Designated Zones. Designated Zones are areas specified by the UAE Cabinet as being outside the state for the purposes of VAT in certain circumstances.

For a summary and analysis of the guide, please refer to Deloitte’s recent alert.

The Public Clarification on entertainment services sets out what the FTA considers to be included in the definition of “entertainment services” in the context of input tax deductibility. 

For a detailed summary, please refer to Deloitte’s recent alert.

KSA GAZT publishes simplified VAT filing guidelines

The Kingdom of Saudi Arabia (KSA) General Authority of Zakat and Tax (GAZT) has published simplified VAT filing guidelines, which provides a general overview of the process of preparing and submitting a VAT return in KSA.

The guide sets out the VAT return process at a basic level, including examples covering a range of industries.

The document may be useful for KSA businesses to raise internal awareness of VAT, and share with employees who may not have a detailed understanding of the VAT return process.

KSA GAZT publishes a guide on invoicing and record keeping requirements

KSA GAZT has published a guide on invoicing and record keeping requirements. The guide provides increased clarity on invoicing requirements with respect to both full and simplified tax invoices, as well as the requirements to keep VAT records in the KSA.

The guide is currently available in Arabic on the GAZT website, and Deloitte is in the process creating an English translation. 

In the meantime, a summary of the key points covered in the guide is included in Deloitte’s alert on the guide.

Please note that this digest is for information purposes only and should not be construed as an 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.