GCC Indirect Tax Weekly Digest

Bahrain publishes VAT Executive Regulations in Arabic

The long awaited Value Added Tax (VAT) Regulations (the Regulations) have been published in Bahrain. The only official version is currently in Arabic.

The Regulations provide the implementing guidelines for the Bahrain VAT Law, Decree-Law No. 48 of 2018 on Value Added Tax, which was published in October. The VAT Law refers extensively to the Regulations.

The VAT Law and Regulations will take effect on 1 January 2019, from which date VAT will be implemented in Bahrain.

For more information about the compliance obligations businesses will face and the action they must take, please refer to the Deloitte’s alert regarding the publication of the Regulations which was circulated separately.

Deloitte is currently in the process of producing an unofficial English translation of the Regulations, and this will be circulated once available.

KSA VAT registration deadline this week

The Kingdom of Saudi Arabia (KSA) General Authority of Zakat and Tax (GAZT) has issued a press release calling on businesses which have annual revenues exceeding SAR 375,000 to register for VAT before 20 December 2018.

GAZT further mentioned that failure to submit the VAT registration application by this date will result in fines and penalties, and the suspension of several government services.

According to Article 79(9) of the VAT Implementing Regulations of KSA, businesses whose annual supplies exceed the mandatory registration threshold of SAR 375,000 but do not exceed SAR 1,000,000 are not obligated to register for VAT until 1 January 2019.

Businesses affected are reminded that VAT registration applications must be submitted to GAZT by 20 December 2018.

UAE VAT Tourist Refund Scheme now fully implemented

The United Arab Emirates (UAE) Value Added Tax (VAT) Tourist Refund Scheme (TRS) is now fully implemented, with Phase 2 coming into effect on 16 December 2018 as per Federal Tax Authority (FTA) Decision No. (2) of 2018 On Tax Refunds for Tourists Scheme.

The TRS allows overseas tourists visiting the UAE to reclaim VAT incurred on eligible purchases made through registered retailers, and came into effect on 18 November 2018.

Until now, refunds could only be validated on departure from Abu Dhabi, Dubai, and Sharjah International Airports.

With the full implementation, refunds can be validated at the following airports, seaports, and land borders, as per the FTA’s guide to tax-free shopping:

Airports

• Abu Dhabi Airport
     o Common area between all terminals

• Dubai Airport
     o Terminal 1, 2, 3, and 3 Business

• Sharjah Airport
• Al Maktoum Airport
• Al Ain Airport
• Ras Al Khaimah Airport

Seaports

• Port Zayed Abu Dhabi
• Port Rashid – Dubai

Land borders

• Al Ghuwaifat – at the border with Saudi Arabia
• Al Ain – at the border with Oman
• Hatta – at the border with Oman

Qatar Excise Law Announced

According to a press release (which may not be accessible from certain locations) issued by the Qatari Ministry of Finance, Qatar introduces a new “selective tax” (Excise Tax) on certain health-damaging goods including 100% tax on tobacco and derivatives, as well as on energy drinks and 50% tax on sugary drinks. The planned introduction date is in the beginning of 2019, the underlying legislation is yet to be published in the Official Gazette.

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.