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DIFC Innovation License for Startups
  • Newsletter, U.A.E

DIFC Innovation License for Startups

Dubai International Financial Centre (DIFC) is the fastest growing financial center in the Middle East and Africa (MENA) region and has been dedicated to the economic excellence of the nation by promoting technological innovation and providing a conducive and enabling environment to the technology and financial services industries.

 

DIFC, acting as the harbinger of economic prosperity in the Middle East, Africa, and South Asia (MEASA) region as the largest financial free zone has recently announced a new license for startups called Innovation License when the DIFC corporate startup license holders under this scheme will join the communities of more than 200 technology companies, 2000 plus firms with more than 25000 professionals.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai originally announced this Innovation license during early 2020 to attract new categories of businesses to the financial center as a key initiative of Dubai Future District with a provision of subsidized commercial licensing option for USD 1500 per annum minimum.

Innovative and creative business entities will be able to grow and expand their business utilizing the legal and regulatory framework of DIFC complemented by world-class intellectual property and data protection rights.

“The new DIFC Innovation License provides an important springboard for future economy pioneers to establish, upscale, and future proof their business within the stable framework of a world-leading global financial center,” added Salmon Jaffery, Chief Business Development Officer, DIFC.

Salmon Jaffery also highlighted, “It is an exciting new offering that we hope will attract technology-led, sector agnostic start-ups that will disrupt the technology and financial sectors. These types of businesses have an important role in shaping the economic future of Dubai, UAE and the region. They will be welcomed by members of DIFC’s ecosystem and become a central part of the new Dubai Future District.”

Officially launched in August 2020, the initiative has already started witnessing new startups and entrepreneurs opt for Innovation license and in the applicable areas of IT infrastructure, Software Development, Internet and cloud migration consultancy, Smart Technology, R&D, and computer consultancy

Besides offering co-working spaces at an affordable rate of USD 500 per month, DIFC provides numerous benefits to Innovation License holders including a registration fee of USD 100, USD 250 data protection fee; securing up to 4 visas when renting flexible desk space, and 50 percent subsidy on additional visas.

IMC is a Dubai-based PRO services company with a team of highly qualified and result-oriented professionals and is well conversant with the local laws and regulations. In addition to rendering our round-the-clock active support in the entire licensing and registration process, we will also help you in identifying the most suitable business activities that can result in a high level of success under this new DIFC Innovation Licensing scheme.

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Global Economy Will Witness Stability and Growth In 2021
  • Newsletter

Global Economy Will Witness Stability and Growth In 2021

2021 will move towards economic prosperity with strong economic and profit growth throughout the year in equities, real estate, and bond markets including particular commodities; Invesco, the Investment management firm, and a global company headquartered in Atlanta with regional offices in 26 countries reports.

“Given the apparent success of vaccine rollouts in the developed world, we believe the global economy will show solid growth in 2021, partly as a function of a rebound from a deep recession, partly due to a gradual release of pent-up demand and also due to financial support, especially in the US. At the same time, we expect major central banks to continue providing generous support,” said Paul Jackson Global Head of Asset Allocation Research of Invesco in a report on 29th March Monday 2021.

Market Experts and strategists from Global Market Strategy Office in the USA are upbeat on the cyclical assets and businesses such as restaurants, hotel chains, airlines, furniture, high-end clothing retailers, and automobile manufacturers as the global economic indicators are trending in the right and upward direction buoyed by positive market sentiment at the backdrop of a huge economic push by most governments, high liquidity, and vaccine rollout.

However, many learned economists and market experts including Invesco cautioned about some unforeseen challenges and narrated some factors that could dampen this economic growth forecast. As also noted by Jackson from Invesco, the five reasons mentioned below can force us to shift our priorities and preferences and make us more defensive in our approaches.

  • Lingering of the covid pandemic with a resurgence in virus infection
  • Disruption in economic recovery triggered by a reduction in government spending, curtailment in economic stimulus, collateral damages, lowering of government support and incentives to businesses and households
  • Rise in inflation forcing central banks towards inflationary measures with increased interest rates
  • Higher bond yields and an unfavorable correlation between equities and bonds
  • The current markets are at a historic high as the hope for economic recovery has already been priced in


“We think the most likely problem is that markets have priced in a lot of recoveries. If we are to remain positive about cyclical assets, we need to become even more aggressive in our assumptions about growth and future spreads/valuation multiples. We are happy to do this, given that we now feel more comfortable about the global recovery, but it has the downside of forcing us to accept that government bond yields will rise more than we previously thought,” Jackson remarked.

The economic growth projections are made on certain assumptions such as stable interest rates and continuation of asset purchase.

Experts from Invesco believe that a positive correlation will be maintained in bond yields and equity prices for economic growth to continue.

Besides, Invesco expects real estate yields to be more attractive compared to other asset classes and will mitigate the risk of higher bond yields.

“Even if cash flows bounce less strongly than for equities, yields are high and we expect them to be stable,” Jackson added.

Energy and industrial metals are considered expensive while Agricultural commodities are cheap and would act as a cushion against rising inflation and interest rate hike.

Europe and the emerging markets are on the list of favorites of Invesco and mostly to gain during global economic recovery and expansion.

Many research institutions including OECD believe that by the end of 2021, more than 80 percent of the global population will develop immunity against the virus mostly contributed by vaccination drives and the economy will grow at a rate of 7 percent and more which would be a big jump.

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  • Newsletter

Managing Your Payroll Outsourcing Services

The secret to a successful business lies in building trust with the stakeholders and meeting them halfway in all business dealings. Payroll outsourcing services is no exception and considering it as your business partner and an extension of your internal HR team can help establish open and honest communication between you two significantly contributing to the business’s performance.

Payroll management is one of the trickiest functions in an organizational and business perspective where accuracy and timeliness are of paramount importance.

Managing payroll is not just about handing over a paycheque to your employee at the end of the month rather consists of a set of administrative functions including employee benefits, taxation, turnover, incentives, etc which are often complex, cumbersome, and stressful.

What is Payroll Outsourcing and How Does it Operate?

Payroll outsourcing involves contracting an external entity to handle payroll tasks. This external provider manages various aspects such as taxes, direct deposits, and routine processes like garnishments and salary calculations. Additionally, they may offer tools for convenient 24/7 access to payroll details for both businesses and employees. Opting for payroll outsourcing enables businesses to streamline operations, cut down on paperwork, and decrease the time HR staff dedicate to payroll duties, ultimately saving both time and money.

Payroll outsourcing services offer multiple benefits and are

  • Saves time
  • Ensures tax remittance correctly and on time
  • Other value-added services
  • Comprehensive reporting with elaborate information
  • Ensures timely compliance of revised regulations of the pension plan, insurance, etc.
  • Saves money
  • Ensures minimum Employee grievances
  • Easy access to the latest technology
  • Ensures Smaller carbon footprints with reduced paperwork
  • Review and Analysis of data for strategic planning

Besides maintaining trustworthy business relationships, efficient management of payroll outsourcing services also includes the following

  • Deciding on the point of contact for payroll service providers within your organization with clearly defined responsibilities can go a long way in bringing success for your payroll outsourcing. There should be someone authorized to have a strategic relationship with the vendor and preferably be someone from the payroll function with one to one relationship with the service provider’s representative responsible for the overall account of your company.
  • Ensuring free and open communication with regularly scheduled meetings is also necessary with the respective point of contact. While the day-to-day contacts meet regularly on a weekly or fortnightly basis to keep a tab on the current payroll issues and immediate action plans, the strategic top-level contacts can meet every month suggesting future improvement programs on customer’s account performance, customer service issues, if any including plans for forthcoming changes to the account. Top management executives should also meet at prescribed intervals usually once in six months for account review meetings focused on the company’s key policy changes, M&A, etc. including new value-added offerings and any technological up-gradation from the payroll outsourcing services.
  • Tracking and Validations of invoices are critical for ensuring financial compliance and business transparency with your vendor. For global payroll vendors, fluctuating exchange rates can significantly change the bill of expenses needing careful monitoring and validation of invoices.
  • Reviewing value-added services from your vendors is important and needs to be reviewed on a scheduled frequency between the top management of two partners. Staffing, training, technological innovations including accounting could be potential areas where your payroll outsourcing services can actively contribute.
  • Conducting periodic performance and focus reviews through Service Level Agreements and Key Performance Indicators are is mandatory to ensure satisfactory compliance with and adherence to documented agreements and performance metrics and necessary corrective and preventive actions required for payroll outsourcing services.
  • Signing a non-disclosure agreement with your payroll vendor is often necessary considering the privacy and confidentiality of payroll data and to safeguard it from being stolen.

FAQs:

What are the advantages and disadvantages of contracting out payroll services?

Among the benefits of outsourcing payroll are time savings, error reduction, enhanced compliance, and access to specialized expertise. However, entrusting sensitive information to a third-party provider means relinquishing some level of direct control.

How does the process of outsourcing payroll function?

When a company entrusts some or all its payroll tasks to an external entity, it’s referred to as payroll outsourcing. Apart from handling payroll processing, comprehensive service providers typically assist with tax filings, ensuring compliance with regulations, maintaining data security, and managing unemployment claims.

Is opting for payroll outsourcing advisable?

Every business decision has advantages and disadvantages, and payroll outsourcing is no exception. Before engaging with a comprehensive payroll service provider, employers should ensure that the vendor can fulfil all their needs and has a dependable track record.
What advantages do payroll outsourcing services offer?
Employers can save time and money by outsourcing their payroll tasks. This frees them from extensive administrative duties, allowing them to concentrate on expanding their business. Moreover, enhanced accuracy can avert expensive fines. Full-service payroll providers with adaptable payment options and self-service applications can also enhance employee contentment.

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  • Newsletter, U.A.E

World Alliance of Inter Financial Centres (WAIFC) Accorded Membership to The Dubai International Financial Center (DIFC)

In March 2021, the WAIFC board unanimously agreed to recognize the DIFC, the leading financial center in the MEASA region as a member of the association, the 4th from the GCC to spearhead the development of digital finance and in the areas of Fintech, Sustainable Finance, and Innovation.

As a non-profit organization located in Brussels and founded in July 2018 in Paris, the WAIFC represents the top nineteen global financial centers across four continents that promote and share best practices in the field of finance with a varied scope of activities and benefit from the collective strength of its members. The alliance as city governments and other financial institutions also facilitates cooperation amongst the group members and interaction with the general public besides developing and promoting their financial Centres.

As a member of WAIFC, DIFC as the highest-ranked financial center in the MEASA region will now collaborate with other leading global financial centers in Tokyo, London, Paris, Frankfurt, Toronto, and in many other countries on global best practices some of which are already entered into memorandums of understanding with DIFC.

DIFC with the vision to drive the future of finance is focused on embracing new and innovative technologies in the field of finance and aims for achieving sustainable economic and social goals including Environmental protection.

“We are very pleased to have DIFC join our association. Dubai is a leading global financial center, and DIFC will undoubtedly bring a valued contribution to our initiatives. We are very much looking forward to working with the colleagues in Dubai,” remarked Jennifer Reynolds, the Chairwoman of the WAIFC.

CEO of DIFC Authority, Arif Amiri highlighted: “DIFC is pleased to be joining the World Alliance of International Financial Centres. The Centre is looking forward to representing Dubai and building partnerships with other members so we can be a collective force for good. Together we can make progress in areas such as FinTech, innovation, sustainable finance, and developing digital economies. We can align our approaches which will allow us to cohesively drive the future of finance.”

Dr. Jochen Biedermann, Managing Director of the WAIFC, added: “DIFC has been an observer to WAIFC since last year, and we are delighted that it will join WAIFC as a full member now. DIFC has had a phenomenal development in less than twenty years from its first steps to one of the world’s leading financial centers. We are very much looking forward to exchanging best practices and learning from each other.”

Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of DIFC with his able leadership taken DIFC to the pinnacle of its performance during 2020 amidst global economic uncertainty caused by the pandemic and elevated the country’s status as a pivotal global economic destination with many businesses reporting exponential growth, including capital markets, asset management, FinTech, professional services, and banking aided by a conducive FinTech and venture capital environments, cost-effective licensing and easy DIFC management startup license, flexible regulation, innovative promotional events, and easy access to funds for start-ups.

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Digital Sky is Overcast with Multi-Clouds Now
  • Newsletter

Digital Sky is Overcast with Multi-Clouds Now

Of late, a multi-cloud strategy has become the leading option for business entities as the survey found an increase in usage of approximately 15 percent between 2019 and 2020 mostly fueled by covid 19 pandemics. Multi-cloud is composed of more than one cloud platform including public, private, and hybrid clouds. Independent of any single cloud platform, a multi-cloud platform offers increased flexibility, reduced cost, enhanced scalability, and many other advantages. There also remain some cons that need to be addressed before switching over to multi-cloud such as increased training needs of personnel, reduced interoperability between applications and services, non-availability of many skilled professionals, increased operational hiccups, logistical complications, etc. However, the benefits far outweigh the cons.

What are the Pros and Cons of a Multi-Cloud Platform?

A quick look into the benefits of multi-cloud platforms often justify its enhanced usage by business entities and the most common benefits are

  • Continuous Availability with little or no possibility of a service break down if one cloud goes down a business can be functional on other deployed clouds
  • Flexibility and freedom of choice of platforms and solutions best suitable for your business needs
  • Empowering customers to negotiate on price with ample visibility on cost and benefits
  • Faster speed and better network performance with service providers having data centers closer to your locations
  • Improved scalability based on business demands and extent of usage
  • Quick innovation due to increased access to a wide range of tools and choosing clouds providing the best sets of services
  • Better prevention of DDoS attacks as data is stored on different platforms
  • Mitigating shadow IT as individual departments have accessibility to solutions as per their needs and without any need to bypass IT department


Though investing in a Multi-Cloud solution is usually a smart and beneficial investment strategy, it also comes with its fair share of challenges as

  • Increased management complexities arising out of vendor-specific monitoring consoles and cloud architectures
  • Increased remuneration and short supply of skilled professionals including architects, developers and testers and, administrators
  • Multiple factors influencing billing and pricing for increased issues with cost analysis and reporting
  • Security issues as a multi-cloud environment are more difficult to secure with several aspects to consider including encryption key, SS/TLS encryption, secrecy management, access controls, etc.
  • Compliance issues as vendors can have non-standard models
  • Complexities in the integration of individual SaaS solutions and reduced interoperability


What are the benefits of Cloud Accounting?

As flexibility is the essence of today’s business, we should be able to manage business operations independently of a central setting. Cloud Accounting and Bookkeeping Services offer us this advantage with several other benefits as mentioned below

  • Ease of accessibility from anywhere and anytime
  • Automated accounting tasks
  • Real-time accounting data with better accuracy
  • Ability to coordinate and collaborate even when physically distanced
  • Improved data security


Strong platform features are indispensable while you choose a remote accounting platform and must-have functions that can enable you to communicate, update and share accounting data, secure information, and manage operations.

Cloud accounting platform Zoho is equipped with tools that enable remote working with several additional features and Zoho Implementation partners can identify, customize, integrate and implement the right set of Zoho tools to effectively address every business needs.

What are Multi-Cloud Models?

Multiple clouds provide strategic services to meet specific business and technical needs and are primarily classed as Software-as-a-service, or SaaS, Infrastructure-as-a-service, or IaaS and Platform-as-a-service, or PaaS.

There are many players in the multi-cloud market segment and deployments can either be a blend of public plus public or public plus private clouds. There can be different models based on business functions running on different platforms such as production running on on-premise infrastructure and development running on a public cloud. In a separate model, a single business function can run simultaneously on a multi-cloud.

What is the Future Outlook of Multi-Cloud Systems?

Multi-cloud environments are going to stay and flourish with time due to cost optimization, operational ease, and increased effectiveness. Cost optimization tools are also coming to the market for analyzing processes to maximize cost savings.

As per global surveys and market research in 2021, the multi-cloud management market is all set to expand at a CAGR of more than 25 percent between 2020 and 2026.

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Saudi Arabia is All Set to Introduce E-Invoicing
  • Newsletter, Saudi Arabia

Saudi Arabia is All Set to Introduce E-Invoicing

A draft resolution detailing the technical and functional implementation guidelines of E-invoicing has been released on 18th March 2021 by Saudi Arabia’s General Authority of Zakat and Tax (GAZT) as an addendum of earlier released regulations published during December last year.

The E-invoicing implementation has been planned in two phases, the first one going live on 4th December 2021 followed by the second phase that would go live on 1st June 2022 GAZT has also announced that all businesses may not be needed to comply with the requirements by 1st June 2022 and the details will be published as a separate resolution afterward.

Unlike a handwritten or scanned invoice, an electronic invoice is generated, stored, and amended in a structured electronic format through an electronic solution that includes all the requirements of a tax invoice. Credit and Debit Notes issued in an Electronic format, as a result of amendments conducted in the Electronic Invoice are called electronic notes and don’t include photocopied or scanned paper notes.

E-invoicing will be used for VAT purposes and will apply to all taxable persons excepting the non-resident taxable persons and any other party issuing tax invoices on behalf of a supplier subject to VAT. Exempt supplies and imports of goods and services subject to Reverse Charge Mechanism (RCM) are excluded from E-invoicing requirements

The contents of an electronic invoice will have all Terms, requirements, and conditions applicable to tax invoices as per Article (53) of the VAT Implementing Regulation. All applicable provisions of tax invoices will apply to Electronic Invoices, including the rules of storage of tax invoices stipulated in the VAT legislation, and specifically, Article (66) of the VAT Implementing Regulation.

For simplified e-invoices and notes, a Quick Response (QR) code of a Base64 format with up to 500 characters must be generated and printed on simplified e-invoices and E-notes. Additionally, controls/mechanisms should be implemented to avoid tampering of the e-invoices.

The e-invoice and E-notes must be issued in XML or PDF format and shall generate a universally unique identifier. For simplified e-invoices and E-notes, businesses will need a cryptographic stamp to be included on the electronic invoices or notes.

The details regarding implementation timelines, targeted groups, and specifications for generation, storage and integration including approved external provider details for E-invoice Generation Solutions will be issued by the GAZT at a later date.

The implementation of Electronic Invoicing will have two phases and will include two specifications

  • Phase one is for the generation and keeping of tax invoices and electronic notes in a structured electronic format issued through an electronic solution that combines all the requirements of tax invoices.
  • Phase two is the Integration of the electronic solution of taxable persons used for generating electronic invoices and notes with the system of GAZT for data sharing.


The Kingdom of Saudi Arabia has planned to introduce e-invoicing as a step towards global best practices aiming for increased compliance with tax obligations, better consumer protection, and fair business competition.

As E- invoicing is made mandatory, businesses that need to issue E-invoices and/or E-notes as per E-invoicing Regulations must make themselves aware of necessary requirements.

All businesses must carry out an initial gap analysis for evaluating if their existing system and technical specifications of E-invoicing complies with the draft resolution requirements.

GAZT also welcomed public comments that can be shared till 17 April 2021 allowing taxpayers and E-invoicing service providers including advisors and other interested parties to comment on the draft resolution.

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Oman VAT Executive Regulation – Important Highlights
  • Newsletter, Oman

Oman VAT Executive Regulation – Important Highlights

On 14th March 2021, the much-awaited Executive Regulations of Value Added Tax (VAT) was issued by the Head of Oman Tax Authority (OTA), His Excellency Saud bin Nasser Al Shukaili vide Ministerial Decision 53/2021. Oman’s Official Gazette no. 1383 published the regulations with guidelines for implementation. The VAT system in Oman will come into force on 6th April 2021 and the Sultanate is going to join the other three GCC member states viz the UAE, Saudi Arabia, and Bahrain to introduce the levy.

VAT is being introduced in Oman keeping in perspective of the county’s ‘Oman Vision 2040’ initiative that stipulates the roadmap to diversify the oil-based economy to non-oil sectors including logistics, manufacturing, and tourism.


Online Registration for VAT

Only those holding a “commercial registration number” (CRN) can register for VAT through the online portal of OTA. The necessary forms and guidelines for registration were provided after OTA decided to implement a staggered registration schedule for those requiring VAT registration.

The schedule is staggered based on the income and businesses with an annual turnover of more than OMR 1 million can apply for VAT registration till the time it goes live. The upcoming registration schedule for income exceeding OMR 500,000 is likely to commence on 1st April and last till 31st May 2021.


Important Highlights of VAT Executive Regulations

The Executive Regulations provide ample clarity on most of the significant areas that were debated, discussed, and exhaustively studied over a long period considering social and economic impacts and clarify the applicability, rules, and procedures of the VAT Law including supplies, supply provisions, administrative matters, and penalties, tax points during transactions, VAT for online services, value assessment of supplies, exemption, and tax adjustments, totally exempted supplies, applicability in special economic zones, customs duty waiver, registration, de-registration, requirements of documentation, tax filing and invoicing, VAT returns, etc.

It is important for businesses to clearly understand the regulations that provide guidelines on the scope and extent of VAT exemptions and zero-rating. Businesses operating in areas that are exempted or zero-rated must be aware of the proper scope and applicability of such exemptions and zero-rating for their business activities and benefit from it.

Companies qualifying for VAT must also know other aspects of how VAT will affect their businesses and accordingly formulate appropriate plans and strategies for VAT compliance from the very first day. Some of the vital regulations are listed below:


Scope and Applicability of VAT


1. VAT Exempt Categories

The Sultanate of Oman has planned to levy VAT at the standard rate of 5 percent on most goods and services. The country, however, has announced some exceptions for essential food items, medical care, education, and financial services which will be exempt from VAT. According to OTA some 94 food items have been kept away from the VAT list including milk, meat, fish, poultry, fresh eggs, vegetables and fruits, coffee and tea, olive oil, sugar, nutritional products for children, bread, bottled drinking water, and salt to name a few.


2. VAT-Zero-Rated Categories

A zero-rated good doesn’t attract VAT owing to its social importance as a necessity. The sale of zero-rated goods is not taxed and credits are given on VAT paid on inputs. Any company engaged in dealing in zero-rated supplies is not included in the mandatory requirement of VAT registration.

Zero-rate or no VAT is imposed in Oman on essential commodities such as education and healthcare.

Businesses related to oil and gas; certain food items; cargo and passengers in global trade, some precious metals like gold, platinum, and silver; some life-saving medicines, medical equipment, and import and export of items can qualify for zero-rated VAT in Oman.


3.VAT-Other Categories

Besides the VAT exempt and zero-rated categories, some other categories classed as essential services also enjoy VAT exemption including financial services, reselling and renting of residential buildings, healthcare services and related goods and services, educational services, local passenger transportation services, import of goods to countries where there is no VAT and any return of imported items, goods, and services for military forces, supplies for no profit and charitable organizations, etc.

Commodities given free of charge such as any sample for business promotions will only attract VAT if the value exceeds either OMR 50 per person or OMR 1,000 in a year collectively and beyond these values, the commodities will be treated as deemed supplies and VAT will be levied on those.


Pre-Registration Input Claim of VAT

Per Executive Regulation Article 73, any input tax incurred before the registration can be claimed within 3 years maximum and article 74 says that the input tax incurred before registration for supplies of services can be claimed within 6 months maximum.

OTA must be informed within 30 days of registration for submitting a claim. For a tax claim valuing more than OMR 50,000 for goods stored as stocks, the audited stock list must be submitted to OTA for a claim.


Compliance of VAT

The Executive Regulations are mandated by the Omani Government stipulating certain compliance requirements which need to be compulsorily adhered to by an individual or company qualifying for VAT as per the regulations. Not complying with the stated compliance requirements may attract penalties as specified under the Executive Regulations.


Tax Invoicing of VAT

The executive regulations mandate the preparation and issuance of proper tax invoices for every single taxable supply including a deemed supply and against receipt of advance. The tax invoice should have all information prescribed by the OTA such as serial no, date of supply and receipt of payments, description and quantity of goods, details of customers and sellers, etc.

There is also a provision for a simplified tax invoice with less information than that in a complete tax invoice and is subject to prior conditional approval of the OTA that is usually received within 15 days from the date of application. A simplified Tax Invoice Format is mentioned in article 147 of the Executive Regulation with mandatory inclusion of the phrase “Simplified Tax Invoice” on it.


Tax Period and Return Filing of VAT

The taxpayers will need to file their returns every quarter starting from 1st January to 31st December of any calendar year. The VAT returns need to be filed online through a government portal and in the format specified by the OTA. The tax return along with the payment of the VAT must be done within 30 days from the end of a specific quarter.


Claim and Refund of VAT

The Executive Regulations demand all VAT claims to be submitted in a prescribed claim application format designed by OTA with specific information of VAT refund claimed, the reason for the refund including the tax period for which the VAT claim applies. All claims of refund must be submitted to the area authority within a maximum of five years from the end of the tax period for which it is due.

The VAT return can be claimed under the following conditions.

  • If an extra VAT amount is paid then the due amount
  • If VAT is paid by a non-resident of Oman
  • If the VAT is paid by a foreign government or military or diplomatic officials
  • If VAT is paid by foreign travelers while purchasing personal goods in Oman and not in commercial quantity and for carrying with them
  • Refunds arising out of changes in the regulations and as announced by the OTA through Executive decisions from time to time

Services under the Reverse Charge Mechanism (RCM) of VAT

As per article 151 of Executive Regulation concerning imported goods or services, the taxpayer is responsible for recording the RCM. Unlike forward charging, a Tax invoice must be issued to self with RCM VAT in his favor if the supplier is a foreign resident and not registered with the OTA for paying the VAT.


Maintaining Records of VAT

The Executive Regulations specify the records to be maintained by the taxpayers including but not limited to the following.

  • Details of day to day transactions in chronological order.
  • Details of Inventory with inventory levels, items name, and types on a regular periodic basis.
  • Details of supplies of imported and exported goods and services.
  • Details of supplies of goods and services from GCC countries.
  • Details of all Customs related transactions.
  • All tax invoices including supporting documents issued by the taxpayers.
  • All tax invoices and supporting documents received by the taxpayers.
  • Records of information for validation of appropriateness of individual tax treatment.


Appeals for Tax Treatment of VAT

The Executive Regulations describe the method for putting an appeal before the OTA and in connection with the tax assessment or adjustment or any decision for VAT registration by the OTA. All appeals to the OTA need to be submitted in the Arabic language.


Penalties for Non-Compliance of VAT Regulations

Penalties amounting to OMR 500 to 5,000 are imposed for certain non-compliance such as

  • Delay in submitting compulsory VAT returns
  • The VAT registration certificate is not displayed properly and not visible to everybody
  • Record keeping, accounting records and books, and necessary documentation are not maintained as per the specified requirements.

Some non-compliance can attract higher penalties and maybe as high as OMR 10,000 which are

  • Inappropriate refund claims not supported by authentic records and documents.
  • Non-submission of registration cancellation request when compulsory by the regulations.
  • Incorrect recovery of VAT and knowingly.
  • Inappropriate processing of VAT inclusive goods and services.

Residential Areas Inclusive of VAT

Article 83 of Executive Regulations stipulates that hotel apartments, ungrounded structures, any place providing bed and breakfast, any tourist complex don’t come under the purview of residential buildings and are subject to usual VAT rates under rules of taxable supplies.


Agent of a Company

Article 19 of Executive Regulation makes it mandatory for any company acting as an agent and working in the name and representing the principal, the agent company must notify the Tax Authority about such arrangement by submitting a power of attorney and including this in its regular scope of activity. The details of principal and beneficiary must also be documented on all the records such as invoices and contracts. The agent must mention a disclaimer on all documents that he is performing all activities on behalf of the principal.

Though enough clarifications are provided in the VAT Executive Regulations, there are still areas needing further clarity. However, the articles specified in the Executive Regulations make it clear that the Tax Authority will be strict and vigilant on the actions of the taxable person. Adherence to these regulations is the key essence as evident in each article.

The introduction of VAT will surely help the country in generating an extra revenue stream though businesses dealing with capital goods may find the market and demand slightly subdued initially. As essential items are mostly kept out of the domain of VAT, it will not put much burden on common Omani citizens.

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Singapore Enters into Digital Economy Partnership Act (DEPA) With New Zealand And Chile
  • Newsletter, Singapore

Singapore Enters into Digital Economy Partnership Act (DEPA) With New Zealand And Chile

Singapore’s Digital Economy Partnership Agreement (DEPA) with New Zealand and Chile came into effect on January 7, 2021.

DEPA is a digital-only trade agreement, which aims to establish new ways and collaborations in digital trade issues, promote interoperability of different countries and address new issues caused by digitalization.

First signed in June last year, DEPA is the world’s first of its kind digital trade agreement that establishes a common set of digital trade rules and digital economy collaborations for the removal of digital barriers, fostering a new form of economic engagement especially at a time when many business activities have gone online.

Singapore has been aiming to build on its network of digital cooperation agreements and international frameworks to support businesses and SMEs engaging in cross-border digital trade and e-commerce. Additionally, DEPA will encourage greater cooperation in newly developed areas such as artificial intelligence and provide organizations the capacity to try new technologies across different countries with lower operating costs and better data protection.

Besides this year’s DEPA with New Zealand and Chile, Singapore has also signed DEPA with Australia through the Singapore-Australia Digital Economy Agreement (SADEA), in December 2020. The country is also in exploratory talks with South Korea and the UK to develop a similar bilateral Digital Partnership Agreement.

The Government of Singapore’s DEPA initiatives is in pursuit of further strengthening its footprint as a global leader in technology and e-commerce including the promotion of the country’s extensive free trade agreement (FTA) network for Singapore company formation by foreign investors.

Key Features and Benefits of DEPA

DEPA will establish new and innovative ways to digital trade issues that will help foreign business owners lower the costs of their operations and improve market access with the added advantage for Singapore company incorporation.

Paperless trade

A key feature of DEPA is that it will encourage paperless trade and reduce document transit and cargo clearance time improving business effectiveness.

An exporter in Singapore can easily apply for an e-certificate of origin with an electronic SPS certification for onward transfer to the customs of the destination country.

Paper trades drastically reduce the cost competitiveness and operational efficiency due to the cost of papers and higher waiting time.

Fintech and e-payments

DEPA advocates greater acceptance of payments due to increased interoperability between different payment systems enabling cross-border payments much easier for NBFCs such as fintech firms.

It was in early December last year when Singapore issued its first digital banking license enabling non-bank entities to offer similar services as conventional banks.

Electronic invoicing

DEPA will ensure e-invoices in Singapore are recognized in Chile and New Zealand for shorter invoice processing time, faster payments, and cost savings by embracing similar e-invoicing standards.

Pan-European Public Procurement On-Line (PEPPOL) e-invoicing solutions will also be available in Singapore SMEs.

Digital identities

DEPA will enable countries to develop safe and secure mutually recognizable digital identities that can streamline many business processes such as opening a bank account, registering a company, etc.

Partners within DEPA can facilitate initiatives that promote the compatibility of different digital identity regimes. In doing so, procedures such as Know-Your-Client (KYC) checks by banks can be done more efficiently and in any DEPA partner country, since the bank only requires the company’s digital identity. This due diligence process currently can take over three months to complete.

Data innovation and artificial intelligence

Parties in DEPA will allow data to flow freely across borders which, in turn, facilitates a conducive environment for businesses to develop new products and services from data-driven innovations.

This includes the use of AI for which there will be the adoption of an ethical AI governance framework. This will ensure that DEPA partner countries responsibly harness AI.

Furthermore, this digital agreement means businesses can pilot and commercialize their data-driven products and services with overseas counterparts from DEPA, therefore accelerating cross-border innovation.

Personal data protection

DEPA will ensure greater personal data protection during the transfer of data across borders by developing mechanisms based on international frameworks.

Business organizations in Singapore can now opt for Asia Pacific Economic Cooperation Cross Border Privacy Rules (APEC CBPR) certification and once certified, can demonstrate the company’s strong data protection and security policies consistent with the APEC Privacy norms.

Besides, the CBPR certified companies can exchange data with other certified companies in Singapore’s DEA network, as well as with other regimes which are already certified as per APEC CBPR System.

DEPA will build trust in digital systems facilitating opportunities for participation in the digital economy and promoting the adoption of AI governance framework and responsibly utilizing AI.

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India Enters into Defence and Trade Agreements with Mauritius and Extends 100 Million USD Credit
  • India, Newsletter

India Enters into Defence and Trade Agreements with Mauritius and Extends 100 Million USD Credit

In a significant development and approved by the union cabinet, India recently entered into a USD 100 million Defence Line of Credit agreement with Mauritius, the first such pact with an African country as a part of the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) also called Foreign Trade Agreement (FTA)during a visit by External Affairs Minister S. Jaishankar during his visit to Mauritius.

“Privileged to witness along with Prime Minister Pravind Kumar Jugnauth the signing of Comprehensive Economic Cooperation and Partnership Agreement, India’s first such agreement with an African country. This will help focus on post-pandemic economic recovery and enable business expansion and greater investments,” Mr. Jaishankar said to the media after signing the agreement.

The new framework under the CECPA will allow India a greater entry for Indian goods into the African continent especially for several items including surgical equipment, medicine, and textile products.

A limited agreement by nature, CECPA will cover trade in Goods, Trade in Services, Rules of origin, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Financial Services, Customs Procedures, and Cooperation in other areas. This will also include 310 export items for India such as foodstuff and beverages, agricultural products, base metals and articles, electrical and electronic items, plastics and chemicals, wood, etc.

“Just to illustrate some of the benefits, Mauritius will get preferential access for export of 40,000 tonnes of sugar into India early frame,” highlighted Mr. Jaishankar. Mauritius will also receive preferential access for the export of 7.5 million pieces of apparel in addition to other 615 products such as frozen fish, specialty sugar, biscuits, fresh fruits, juices, mineral water, beer, alcoholic drinks, soaps, bags, medical and surgical equipment.

A $100 million Defence Line of Credit for Mauritius was also announced. This would “enable the procurement of defense assets from India” according to the requirements of the country which was emerging as an important maritime entity in the Indo-Pacific region. “These initiatives underline once again that the security of Mauritius is the security of India; in the prosperity of Mauritius is our prosperity,” Mr. Jaishankar remarked adding that Mauritius would get a Dornier aircraft and an Advanced Light Helicopter Dhruv on a lease that would help strengthen its maritime security capabilities.     

Mr. Jugnauth emphasized that the agreements signed between the two countries would “consolidate the strong ties” between India and Mauritius further and promote foreign direct investment of Mauritius and new Mauritian company formation in India. Notably, during April September 2020, Mauritius ranked 4th in foreign direct investment in India.

The Chagos Archipelago dispute also came up during the discussion, which was an issue of sovereignty and sustainable development before the United Nations. In 2019, India voted for Mauritius at the U.N. General Assembly on this issue. India was amongst the 116 countries that demanded that the U.K. end its “colonial administration” from the archipelago.

“I assured the Prime Minister of India’s steadfast principled support on this issue as has been demonstrated in the past,” noted Mr. Jaishankar.

Me. Jaishankar also reaffirmed India’s medical support to Mauritius in the aftermath of the covid pandemic supported by the recent delivery of 100,000 Covishield vaccines to the African nation. Covid vaccine supply was a “clear and telling demonstration” of the strong bilateral relationship between the two countries, he remarked.

India’s External Affairs Minister also reviewed the status and progress of the India-assisted development projects in Mauritius and invited Mr. Jugnauth for a visit to India.

About business and investment in the services sector, Indian service providers will have access to around 115 sub-sectors from the 11 broad service sectors including computer-related services, research & development, telecommunication, construction, financial, tourism & travel, entertainment, transport, professional services, etc.

India too offered approximately 95 sub-sectors from the 11 broad services sectors, including professional services, R&D, and other business services, and invited Mauritius investors for setting up a company in India.

Both sides have also reached an agreement for an Automatic Trigger Safeguard Mechanism (ATSM) for negotiating on a limited number of highly sensitive products within two years.

India Mauritius bilateral relationship is deep-rooted supported by historic cultural affinities, regular and frequent high-level political interactions, development cooperation, defense and maritime partnership, and people-to-people connection.

Mauritius being an important development partner, India had extended a ‘Special Economic Package’ of USD 353 million to Mauritius in 2016.

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Amendment in Citizenship Law will Attract More Investment and Talent to The United Arab Emirates
  • Newsletter, U.A.E

Amendment in Citizenship Law will Attract More Investment and Talent to The United Arab Emirates (UAE)

The UAE announced on Saturday, January 30 2021 about the amendment of the country’s citizenship laws granting citizenship status to investors and expatriates for the first time, a move that could potentially benefit the UAE with more foreign investment and new business setup in Dubai. Additionally, the move will mean quality human capital for the country.

The Prime Minister of UAE, Sheikh Mohammed bin Rashid Al Maktoum, also the ruler of Dubai, said “the new measures were aimed at attracting skilled professionals and their families to help in the development of the emirates.”

“We adopted law amendments that allow granting the UAE citizenship to investors, specialized talents & professionals including scientists, doctors, engineers, artists, authors, and their families. The new directives aim to attract talents that contribute to our development journey,” he added.

The nomination and approval rights for qualifying the eligibility of such citizenship will lie with the UAE cabinet, local emiri or rulers’ courts, and executive councils of the seven emirates under clear criteria set for each category. The law will allow those qualified and provided with UAE passports to “keep their existing citizenship”, he added.

The changes to the law on nationality and passports, in effect, will allow expatriates to become dual citizens and for the first time in history for any of the Middle East nations. The UAE has also become one of the few countries in West Asia to grant citizenship to expatriates, who form a large chunk of the population in the region.

The UAE alone is home to millions of foreigners, one of the largest concentrations of expatriates in the Middle East and other parts of West Asia. It is believed that this citizenship amendment act along with the recent Abraham Accord and normalization of diplomatic and economic ties with Israel will witness increased FDI pouring into the UAE with many new Dubai company incorporation as well as many new businesses in other parts of the Emirates.

The categories that can qualify to acquire UAE nationality include.

  • Investors
  • Specialists
  • Families, spouses, and children
  • Doctors
  • Scientists
  • Artists
  • Inventors
  • Talents
  • Intellectuals


Granting of citizenship will be through nominations from the courts of rulers and crown princes, executive councils of the seven emirates, and the cabinet and will be based on nominations received from federal entities.

The UAE cabinet declared the changes in line with an order received from President Sheikh Khalifa bin Zayed Al Nahyan to attract and retain individuals with specialized skills and innovative minds.

The amendments laid down certain criteria and conditions to be fulfilled by each of the above categories before granting UAE citizenship.

Doctors and specialists must be specialized in a unique scientific discipline or any other scientific principles that are highly required in the UAE and have acknowledged scientific contributions, studies, and research of scientific value and practical experience of not less than 10 years, in addition to obtaining membership of a reputable organization in his/her field of specialization.

Scientists are required to be active researchers at a university, research center, or in the private sector, with practical experience of not less than 10 years. They should have contributions in their field, such as winning a prestigious award or securing substantial funding for research in the past 10 years. It is also mandatory to obtain a recommendation letter from any recognized scientific institution in the UAE.

Investors must own a property in the UAE

Inventors need to obtain one or more patents approved by the UAE’s ministry of economy or any reputable international body, in addition to a recommendation letter from the Economy Ministry.

Persons with creative talents, such as intellectuals and artists, should be pioneers in culture and arts and winners of one or more international awards. A recommendation letter from related government entities is mandatory as well.

If some expatriates qualify then before acquiring citizenship, the expatriates must swear an oath of allegiance, commit to abide by local laws, and inform authorities in case they acquire or lose any other citizenship.

UAE citizenship offers a range of benefits, including the right to establish or own commercial entities and properties, and any other benefits coming into effect from federal authorities.

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