GCC Indirect Tax Weekly Digest

Bahrain MOF invites certain businesses to register for VAT

With Value Added Tax (VAT) to be implemented in Bahrain on 1 January 2019, the Bahrain Ministry of Finance (MOF) has contacted specific businesses to determine VAT registration obligations. 

The MOF has emailed a range of businesses with an information request and a corresponding form, to be submitted by 1 November 2018.

We expect that in the coming weeks a full-scale registration process will commence for businesses which exceed the mandatory registration threshold of approximately 37,600 BHD (or USD 100,000) in annual taxable supplies.

There is, as yet, no indication as to the process, or procedures, for those entities that may wish to register voluntarily (threshold likely to be approximately 18,800 BHD (approximately USD 50,000).

UAE tourist VAT refunds from 18 November 2018

The United Arab Emirates (UAE) Federal Tax Authority (FTA) has announced the initial phase of the Tourist Refund Scheme (TRS) will be introduced on 18 November 2018, with a further comprehensive implementation by 15 December 2018.

The TRS allows overseas tourists visiting the UAE to reclaim VAT incurred on eligible purchases made through registered retailers. The FTA stated that tax invoices issued from 18 November 2018 will be eligible for the TRS, which will have over 4,000 participating retailers. 

The four conditions for retailers to take part in the TRS include:

1. The retailer must be registered with the FTA for VAT and have a valid tax registration number (TRN).
2. The supplier’s sales of goods must not be excluded from the TRS, as determined by the FTA.
3. The retailer must submit a request to participate in the TRS, as determined by the FTA.
4. The retailer must meet the financial credit requirements specified by the system operator and be committed to submitting tax returns and paying due tax regularly.

Tourists will need to request a VAT refund from the TRS operator (Planet) directly. Where satisfactory evidence is presented a refund of up to 85% of the VAT paid may be provided. Planet will charge the VAT amount refunded to the retailer, and the retailer will then be able to reduce this amount from the output tax declared in its VAT return. 

For TRS registered operators, it will be essential that they monitor publications from the FTA between now and 18 November 2018 in case a listing of ‘excluded goods’ is published prior to the TRS go-live.

KSA announces establishment of Special Integrated Logistics Zones

The Kingdom of Saudi Arabia (KSA) has, by Royal Decree, announced the establishment of new Special Integrated Logistics Zones, with the first such zone to be situated at King Khalid International Airport.

This is part of an initiative by Government authorities to attract foreign investment to the KSA, and will have direct and indirect tax consequences as a result.

Deloitte Events

Bahrain:
Due to popular demand, we have reached the maximum capacity for our upcoming VAT awareness seminar sessions taking place in Manama, Bahrain, on October 29^th and 30^th 2018.

Dubai:
We are pleased to inform you that we will be hosting an industry awareness seminar on VAT and the Education Sector in the UAE taking place in Dubai on Tuesday November 13^th 2018. During this interactive session, our experts will discuss the key VAT challenges being faced by the education industry. Full event details are available here.

Qatar:
On Monday 12 November, we will be holding our annual Tax Conference in Doha, Qatar. At this exclusive conference, subject matter experts will share their insights into the most discussed topics in domestic and international tax that will affect businesses and their operations in Qatar and the region with a focus on the VAT reform.

The conference will delve into the VAT framework and look further at the detailed consequences of the framework for a Qatar business in its domestic dealings, and its business within the GCC and the wider world. Register your interest here. 

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.