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Manufacturing Sector to Benefit From the Recent FDI Update – 100% Foreign Ownership
  • Newsletter, U.A.E

Manufacturing Sector to Benefit From the Recent FDI Update – 100% Foreign Ownership

As per the recent FDI law update, 100% foreign ownership is allowed in mainland companies in certain sectors of the economy. The resolution allows 122 economic activities in which FDI is permitted. This list includes economic activities across various sectors including agriculture, manufacturing and services (including healthcare, hospitality, construction, education, among others). This move aims to strengthen the UAE’s commitment to become the preferred foreign investment destination in the region.

The UAE government is making every effort to raise the industrial sector’s contribution to the GDP and foster economic growth by working towards building a sustainable and diversified economy. In fact, the country is all set to achieve its mission – UAE Vision 2021 and UAE Centennial 2071 – a long-term government plan spanning over five decades. The recent FDI regulations will further boost this plan.

It is worth noting that the UAE’s economy still stands strong despite the recent crude oil price fluctuations and global slowdown caused due to COVID-19 pandemic. Besides, the country’s economy is heading towards major diversification and focusing on building a future based on non-oil sectors.

While companies are facing a bigger challenge of addressing supply chain issues and additional manufacturing locations, UAE also focuses on achieving advanced technology outputs in order to transform its business models.

UAE enjoys the advantage of its strategic location on the new Southern Silk Road between Asia, Europe and Africa. Besides, it also ranks high in all the five areas of manufacturing environment viz, infrastructure and innovation, energy and transportation, policies and regulations, workforce quality and unrestricted adaption of automobile and Artificial Intelligence facilities. The favourable economic environment results in increased productivity which in turn helps develop transformative technologies helpful for developments in the fields of Artificial Intelligence, Advanced Innovation, Fourth Industrial Resolution, etc.

With the global crises, there are uncertainties regarding economic growth. During such times, UAE is focusing on finishing its infrastructure and strategic projects which were kept on hold for a long time. This is further set to boost investment in the region. The manufacturing sector is largely benefitting from this move. Manufacturing sectors are given special attention as they help achieve these projects in all economic sectors such as medicine, aviation, renewable and nuclear energy, military, aluminium, plastic, food, engineering, robotics, space, biotechnology, artificial intelligence, self-propelled vehicles, etc.

For businesses setup in UAE, this new FDI law update will prove to be very fruitful. If you are looking for company formation in Dubai, you may consider reaching IMC Group.

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For Foreign and Non-Resident Indian Visitors relaxed Residency Rules in Wake of COVID-19 Pandemic
  • India, Newsletter

For Foreign and Non-Resident Indian Visitors relaxed Residency Rules in Wake of COVID-19 Pandemic

As per the Income Tax Act, 1961 Section 6 provides for the residential status of the individual based on the stay during the financial year that commences from April to March every year. This year due to the hardship created by the Coronavirus pandemic, foreign nationals and non-resident Indian visitors who have come to India for business, employment, or personal reasons have been unable to leave and return home.  As a result, the CBDT (Central Board of Direct Taxes) has relaxed residency rules under Section 6 of the Act vide Circular No. 11/2020 dated May 8th, so that visitors who are compelled to stay will not have to change their non-residential status.  Residency rules have been relaxed as follows:

  • For those individuals who haven’t been able to leave the country on or before March 31st and have been quarantined as a result of the COVID-19 pandemic after March 1st and evacuated on or before March 31st
  • For those individuals who haven’t been able to leave the country on or before March 31st from the date of quarantine until their departure (or March 31st as may be the case) or has evacuated India on or before March 31st


The CBDT’s clarification will provide relief for individuals who were about to exceed the threshold for non-resident status/RNOR (Resident but Not Ordinarily Resident) because of being quarantined in India during the financial year of 2019-20.  Currently, there is no relief being provided for an extended stay during the 2020-21 fiscal year.  However, the CBDT is aware of the issue and is reassuring individuals that they will be provided with relaxed residency rules. The Organization for Economic Corporation and Development (OECD) has given guidelines to encourage countries to adopt coordinated measures adopted by Ireland, UK and Australia.

Consequently, relief will be provided to those individuals who were visiting India and were unable to leave because of the COVID-19 lockdown.  Individuals should have the proper documentation and be able to demonstrate that they were forced to stay in India because of the lockdown.  Furthermore, the OECD (Organization for Economic Co-operation and Development) has recommended that tax authorities shouldn’t change an individual’s residential status of senior executives and main functionaries of the companies, based on these circumstances.

Additionally, the circular did not provide relaxation in regard to any ‘permanent establishment’ (PE) of the company that are staying under the lockdown or forced extension of the stay period.

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Mitigating the Developmental and Economic Impact of COVID-19 with new VAT Incentives in Saudi Arabia
  • Newsletter, Saudi Arabia

Mitigating the Developmental and Economic Impact of COVID-19 with new VAT Incentives in Saudi Arabia

In order to mitigate the developmental and economic impact of the Coronavirus on the Saudi Arabian private sector, the General Authority of Zakat and Tax (GAZT) recently launched a number of incentives that will provide support for taxpayers and stimulate the economy.  These General Authority of Zakat and Tax incentives in Saudi Arabia fall in line with:

  • The International Monetary Fund recommendations for global tax authorities
  • Ministry of Finance resolution announcements
  • Royal Decree No. 45089 dated March 18th, 2020

The scope of these incentives applies to companies doing Business in Saudi Arabia and that failed to meet their registration obligations and enables them to register for VAT.  Here is a quick recap of the provided incentives related to the VAT as it gives the taxpayers a chance to get relief from penalties.

As the opportunity is time bound till end of June, experts recommend that the companies and taxpayers look over the past tax returns and disclose all of the errors or omissions under this window of opportunity. The following is a summary of these incentives as they relate to the VAT:

  • Eligibility and timeframe – benefits are extended to all registered taxpayers as well as those that are required to register according to KSA VAT legislations (includes non-residents who are required to pay VAT in Saudi Arabia. In addition to this, any VAT registration as well as return amendments made between March 18th and June 30th, 2020 will be eligible for benefits.
  • Late registrations – for resident and non-resident entries that should have been registered prior to the original date of March 18th, NO penalties will be imposed from 18th March to 20th June 2020 and this holds valid for non-resident taxpayers.
  • Returns and voluntary disclosures – VAT returns that were due prior to March 18th can be filed up until June 30th without incurring penalties. Taxpayers are allowed to make amendments to previously submitted returns up until June 30th without incurring penalties.  Furthermore, that can apply for an installment plan and make payments during the incentive period.  Previously audited GAZT returns can also be amended while those returns that are undergoing an audit can be amended by contacting the GAZT directly.

It should also be noted that there are limitations that will apply where these incentives are concerned.  For example, any additional taxes or penalties that were imposed prior to the date of the initiative will not be cancelled.  Additionally, any requests for tax refunds due to VAT returns amendments will no longer be accepted.  They will be processed as per the current KSA VAT Legislation. For additional information or to learn if these new VAT incentives apply to you, contact a VAT consultant in Saudi Arabia.

Thus, to claim benefits under this new scheme, all previous liabilities need to be cleared before 1st July 2020. Thus, it is time to review the previous and current VAT position to keep your tax returns in order and smoothen the process.

If your company is looking for professional assistance with VAT and tax filing procedures, contact Intuit Management Consultancy (IMC Group). With years in the

Industry, we offer business set up solutions, tax advisory, international tax structuring, bookkeeping and VAT. Call us today and let us help you.

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Deadlines for reporting Economic Substance have been extended for Businesses in Bahrain
  • Bahrain, Newsletter

Deadlines for reporting Economic Substance have been extended for Businesses in Bahrain

It goes without saying that the economic impact of the Coronavirus pandemic has been felt on a global scale.  Consequently, this has created a number of unprecedented challenges for hundreds, if not thousands of businesses in Bahrain and throughout the Middle East.  Various Middle Eastern tax authorities have taken supportive measures to benefit the different business sectors by extending compliance deadlines.  According to experts, the following is a summary of these measures concerning the Bahrain business sector.

As of March 29th, of this year, the Bahrain MOICT (Ministry of Industry, Commerce, and Tourism) has confirmed an economic substance reporting deadline extension in response to the Coronavirus pandemic.  Businesses with a fiscal year that ended on December 31st, 2019 will have until June 30th, 2020 to file their notifications and relative reports with the MOICT.  The original deadline date was March 31st.  Hopefully, this measure will benefit the different Bahrain businesses that have been impacted by this global pandemic.

Additionally, measures regarding economic substance regulation notifications have also been adopted by the following:

  • ADGM and DIFC of the UAE
  • DSO and RAKICC of Ras Al Khaimah
  • Kingdom of Saudi Arabia
  • Nation of Qatar

 

The media hasn’t addressed any other specific matters at this time, including deadlines for the filing of appeals and objections. To know more about the recent information on this subject, contact Intuit Management Consultancy (IMC Group). With years in the industry, we have assisted a myriad of companies with tax advisory services, business setup solutions, corporate advisory services, global mobility, bookkeeping and accounting among other services. Call us today.

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Corporate Tax Relief for Oman Businesses impacted by COVID-19
  • Newsletter, Oman

Corporate Tax Relief for Oman Businesses impacted by COVID-19

As of March 31st, 2020, tax authorities are now providing tax relief for corporations that are currently doing business in Oman and have been affected by COVID-19 as well as any Government imposed precautionary measures that were put in place to counteract the pandemic in Oman.  These measures include:

  • deferral of filing returns and making tax payments for up to 3 months from the original due date of March 31st
  • exemption from fines and penalties that are related to deferred filings and payments
  • tax deductions for contributions or donations involved for handling the pandemic (must be in accordance with executive regulations and prescribed income tax laws

For example, if you haven’t filed your return or are making tax payments in installments, the deadline has been extended until June 30th from March 31st, the original due date.  Any additional taxes or penalties for filing or paying after the deadline will be waived, provided taxpayers in Oman are able to prove that this was due to the COVID-19 pandemic, including any Government imposed precautionary measures. If you are looking for tax services in Oman, it is best to contact a company that can assist you through the whole process.  

Additional Considerations where Donations, Installment Payments, and Objections to Tax Assessments are concerned

In addition to tax relief that applies to tax returns and tax installment payments, Oman Government authorities have made the following changes:

  • Donations – donations towards measures that will prevent the spread of COVID-19 are fully tax deductible for Oman-based corporations according to Government tax laws and regulations.
  • Installment payments – because of COVID-19, tax installment payments will be approved provided taxpayers can show that the delay has resulted from the pandemic. Any additional taxes that would normally be imposed will be waived.
  • Tax returns and payments: To help corporates file tax returns and payments, it has been changed to 30th June 2020. This leverage has been given considering the COVID- 19 precautionary measures, so there are no additional taxes or penalties that would be applicable.
  • Objections to tax assessments – any objections to corporate tax assessments that are filed after the March 31st due date will be accepted provided taxpayers can show proof that they’ve been adversely affected by the pandemic. Furthermore, any additional taxes or penalties that have been imposed on installments payments will be waived as a result.

For additional information regarding tax relief for corporations that have been negatively impacted by COVID-19, it is recommended that you seek the advice of professional tax services in Oman such as Intuit Management Consultancy (IMC Group).

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Deadlines for Filing Tax Returns and paying Taxes extended in Saudi Arabia during COVID-19 Pandemic
  • Newsletter, Saudi Arabia

Deadlines for Filing Tax Returns and paying Taxes extended in Saudi Arabia during COVID-19 Pandemic

On March 20th, the Saudi Arabian Ministry of Finance published the details of its economic relief measures to benefit businesses that have suffered during the COVID-19 pandemic.  The following is a detailed listing of the measures that apply to taxpayer obligations that fall within the period of March 18th through June 30th:

  • Filing deadlines for all returns including income tax, WHT (withholding tax), VAT, and zakat, are extended for a 3-month period beginning with the original due date. 
  • NO restrictions will be placed on the issuance of tax and zakat certificates that expired during the fiscal year of 2019. 
  • Payments on expatriate levies, extension fees on exit and re-entry visas, government service fees such as municipal fees, and work visa fees will be waived, subject to certain conditions. 
  • Tax payment deadlines including excise tax, income tax, VAT, WHT, and zakat are extended for a 3-month period beginning with the original due date.


Be aware that the Ministry of Finance statement doesn’t address certain issues such as the filing of tax appeals and objections.  The GAZT (General Authority of Zakat and Tax) and the GSTC (General Secretariat for Tax Committees) has issued prior notifications relative to hearings by the Internal Settlement Committee.  Additionally, various appeal committees are suspended pending further notice.

Your business needs the assistance of professionals and that is where Intuit Management Consultancy (IMC Group) steps in. We can assist your business with business set-up, tax consultations, corporate advisory services, international tax structuring, filing taxes, VAT and more. 

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Deadline Updates for United Arab Emirates Economic Substance Regulation Notifications
  • Newsletter, U.A.E

Deadline Updates for United Arab Emirates Economic Substance Regulation Notifications

According to financial experts in United Arab Emirates, Government regulatory authorities have amended or confirmed the filing deadlines for their annual filing notifications in their respective free zones.  Pursuant to current economic substance regulations, these updated notification deadlines apply to the following entities:

Abu Dhabi Global Market (ADGM) – the March 31st notification deadline no longer applies.  Unfortunately, no updated deadline is available at this time.

Dubai International Financial Centre (DIFC) – as with the ADGM, the March 31st notification deadline no longer applies.  Regardless, the DIFC confirmed that filing it during the 2nd quarter of this year is still required.  However, as of this notice, the deadline is yet to be announced.

Dubai Silicon Oasis Authority (DSO) – the deadline for filing the notification was March 31st.

Ras Al Khaimah International Corporate Centre (RAKICC) – the deadline for filing the notification is June 30th.

These economic substance notification deadlines apply to the following businesses:

  • Banks and financial institutions
  • Business or corporate headquarters
  • Businesses that manage investment funds
  • Distribution businesses
  • Holding Companies 
  • Insurance businesses
  • Intellectual property or IP businesses
  • Lease-finance businesses
  • Service centers
  • Shipping business


Regulations are in place to provide definitions of the activities listed above and apply to financial years beginning January 1st, 2019. If you are looking for business consultation or advisory services, contact Intuit Management Consultancy (IMC Group).

Offering the services of experts with in-depth knowledge about global mobility, international tax structuring, VAT and tax filing services in the UAE. Call us today.

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DIFC Foundations now being accepted as Direct Shareholders by JAFZA
  • Newsletter, U.A.E

DIFC Foundations now being accepted as Direct Shareholders by JAFZA

JAFZA (the Jebel Ali Free Zone) has become the most recent Dubai jurisdiction to allow Dubai International Financial Centre (DIFC) Foundations as direct shareholders and/or incorporators in registered entities. This is a big step forward when it comes to business consolidation and growth.

Why is this so important?

The acceptance of these foundations is literally a game-changer when it comes to the structuring of UAE real estate assets.  As one of the largest, most reputable free zones in this region of the world, JAFZA and JAFZA IBC’s (its offshore counterparts) have long been recognized as the go-to option for the registration of real estate holdings in the Dubai region. This marks a new beginning in the real estate sector and shows immense opportunity for growth.

The relationship between DIFC Foundations and JAFZA addresses key concerns of many entrepreneurs and investors such as asset protection and legacy planning.  In the past, these concerns could’ve only been addressed by fully restructuring the legal process involved in the transference of property ownership. By making it seamless and easier to access than before, the interest that has been generated is newsworthy.

JAFZA IBC’s Before
  • Using a sub-vehicle to consolidate; individual share holding
  • No legacy planning strategy
    • assets subject to probate in case of death
    • dilution equates to destruction of value
  • Poor asset protection against creditor attacks, divorce, etc.
  • Poor value – requires double legalization

JAFZA IBC’s After
  • Consolidated under a single planned structure; asset segregation by class
  • Smoother intergenerational succession
  • NO authorities involved
  • NO dilution equates to better income protection
  • NO family disputes
  • Protection against attacks
  • Privacy
  • Increased cost-effectiveness

Additional Considerations

As self-owned entities, DIFC Foundations have a personality that is distinct from that of their founders.  They are compatible with a range of asset classes in the UAE including investment portfolios, real estate, and shares.  Furthermore, they enable business owners and entrepreneurs (as well as their families) to consolidate and maintain control over their investments and other income-generating assets. This shall help bring better financial stability in the market.

At the same time, these individuals are protected against potential risks such as creditor attacks and probate.  Most importantly, Muslims and non-Muslims alike will benefit from their efficacy as a financial tool.  JAFZA’s action coincides with the introduction of a number of economic improvement measures put forth by the DIFC as a response to the COVID-19 pandemic. This includes waiver of all registration fees for the specific scope industries and for the foundations. Thus, business can look forward to optimizing their high value assets with ease.

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VAT Refund for Foreign Businesses in the UAE
  • Newsletter, U.A.E

VAT Refund for Foreign Businesses in the UAE

The Federal Tax Authority (FTA) has introduced a VAT refund scheme in the United Arab Emirates for foreign businesses. With this scheme, all eligible non-United Arab Emirates established businesses will be able to submit the VAT refund requests for the calendar year 2019. However, the refund application needs to be made by 31st August 2020.

Which businesses can claim VAT refund?

Only specific foreign businesses will be eligible for the VAT refund paid on expenses incurred in the UAE. The eligibility criteria are as follows:

  • The business must not have a place of establishment or fixed establishment in the UAE or other GCC implementing state.
  • They are not a taxable person in the UAE (meaning they are neither registered nor required to be registered for VAT purposes).
  • They are not carrying on a regular business or ongoing activities of a business in the UAE; and
  • They must be carrying on a business and are registered as an establishment for VAT overseas.

Other conditions

FTA has further mentioned the minimum claim amount for each VAT refund application which is AED 2,000. This may include a single purchase or multiple purchases. Businesses aiming to claim refund must hold the original tax invoices / receipts of the purchases they would like to reclaim VAT. The same has to be submitted along with the refund application to the FTA

Further, businesses operating out of selected countries are only entitled to a VAT refund scheme. Below is the list of eligible counties:

  • Austria
  • Bahrain
  • Belgium
  • Denmark
  • Finland
  • France
  • Kuwait
  • Iceland
  • Isle of Man
  • Lebanon (in certain situations)
  • Luxembourg
  • Namibia (in certain situations)
  • Netherlands
  • New Zealand
  • Norway
  • Oman
  • Qatar
  • Saudi Arabia
  • South Africa (in certain situations)
  • Sweden
  • UK
  • Zimbabwe
  • Switzerland


If you have incurred VAT in the UAE but your business is not established in the above mentioned countries, you might not be able to recover the VAT under this scheme. However, you can seek help from professional consultants to explore other options to reduce your VAT cost in the future.

IMC Group is a renowned VAT consultant in the UAE. Our VAT experts can assist you through the entire process of applying for a VAT refund and also help you minimise your VAT cost in the future by reviewing your supply chain structure. For more information, you can get in touch with us.

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Indian IT Industry to Invest $3 Million in Bahrain
  • Bahrain, Newsletter

Indian IT Industry to Invest $3 Million in Bahrain

There are seven IT companies that are interested in investing approximately $3.1 million or 210 crore rupees for Bahrain company formation. The monetary investment will help to improve Bahrain’s technology and communication. Bahrain Economic Development Board has approved the seven IT consultants of India to invest in Bahrain’s developmental sectors. The seven Indian IT firms include IT consultants, software developers, and hardware developers. The announcement of investment was made in 2019 through an official statement.

It is needless to say that India is an emerging global power, and this is the reason the Gulf country is keen to collaborate with India. According to the officials, India has been developing its IT sectors, and Bahrain wants to be a strategic partner in the technology domain. In order to make the investment easier, The Central Bank of Bahrain is trying to provide an investment-friendly environment. Once the investment is made, the digital business like data privacy technology, Robo advisory for monitoring the insurance, and regulatory sandbox will thrive.

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