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Applying for a VAT (Value-Added Tax) Refund in UAE
  • Newsletter, U.A.E

Applying for a VAT (Value-Added Tax) Refund in UAE

One of the most crucial parts of an effective tax strategy is knowing how to recover the VAT you’ve paid during the past tax year.  Not only is it important to know if you have the right to apply for a VAT refund, you should be aware of the preparations involved so you can obtain it as soon as possible.

What is a VAT Refund?

Under FTA regulations, all registered businesses must submit a VAT return outlining the details of their sales and purchases for the tax period. Input VAT refers to the amount paid to suppliers for purchases or expenses, while Output VAT refers to the amount collected from sales. The input VAT amount can be offset against the output VAT amount.

Due to its complexity, businesses should seek expert advice to claim a VAT refund in the UAE before submitting a VAT refund form.

Timeline for VAT Refunds

When a taxpayer applies for a VAT refund, the Federal Tax Authority (FTA) will review and process the claim within 20 business days from the submission date. The FTA will inform the taxpayer of their decision to accept or reject the claim. If the processing time exceeds the 20-day deadline, the FTA will notify the taxpayer of the extension.

VAT Refund: Helpful Tips

First and foremost, the tax refund file must be complete and fully prepared before you submit it to the tax office. Furthermore, all VAT refund procedures must be compiled correctly to receive your claim amount quickly and without any delays. The more common factors that can result in a delay include:

  • Difficult administrative procedures
  • Incorrect or insufficient documentation
  • Missing deadlines when replying to the Federal Tax Authority
  • Not understanding the indirect tax rules

Keep in mind that delayed or missed refunds and unclaimed tax credits can result in a negative cash flow and “tax leaks”, both of which can increase your costs of doing business and reduce your profitability in the process.

As a relief measure and in response to the COVID-19 (Coronavirus) pandemic, UAE businesses can expect to receive their VAT refunds earlier than usual. A number of tax professionals now believe that the Federal Tax Authority has accelerated the refund process for those businesses that have already submitted their returns.

We are here to help with Your VAT Refund

Our tax agency is registered with the Federal Tax Authority and is comprised of a team of professionals that are dedicated to providing the highest quality service and your satisfaction. We are happy to share our tax refund experience and expertise, especially when it comes to complicated, detailed, and tedious bureaucratic processes. We can assist you with:

Reviewing VAT returns, calculations of refundable VAT, working papers and check documentation for filing refunds

  • Prepare documents and data templates for VAT refund applications as per laws
  • Check for VAT non-compliance for your company
  • Prepare and submit the VAT refund application
  • Look over the VAT refund report on missing documents/points, respond to queries of FTA and re-submit after corrections
  • Manage correspondence and communication with Federal Tax Authority
  • Visit the tax office and handle the finalization of the VAT refunds
With our extensive network of tax professionals and VAT specialists, we can easily assist you in developing and improving the processes that will enable you to reduce administrative costs and the time invested when applying for your refund. We are with you at every step of the way when it is about tax and VAT filing and refunds. To know more about the offered services which are not limited to corporate tax and VAT, please call Intuit Management Consultancy (IMC Group).

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Make in India Boosted by PM Modi’s Rs 20 Lakh Crore Package to Tide Over COVID- 19 Pandemic
  • India, Newsletter

Make in India Boosted by PM Modi’s Rs 20 Lakh Crore Package to Tide Over COVID- 19 Pandemic

Considering the detrimental effect of the COVID-19 pandemic that has led to the lockdown for over 8 weeks, Prime Minister Narendra Modi recently announced a special economic package of Rs. 20 lakh crores. He stressed on the importance of being self-reliant as a road map for successful economic development. He said that after carefully formulating economic support to all sections of the society, it will focus on not just a single industry or business but covers MSMEs, cottage industries and all local businesses.

Announcing the relief package under ‘Atmanirbhar Bharat Abhiyan’, he stressed that it will not only strengthen the Indian supply chain globally but will ensure that land, labor, law and liquidity will boost all economic sections of the businesses and industries including agriculture.

The mega economic package is being seen as a big boost to the businesses and industries that have suffered a setback due to the lockdown imposed to combat the COVID-19 pandemic. There have been many projections about India’s economic growth that it might just be 2% in the current financial year. The PM’s economic package has been unveiled based on similar economic boost given by other countries like Japan and USA. The relief package is built on five pillars – demography, system, economy, demand, and infrastructure.

PM Narendra Modi said that the pandemic has taught the country that being self-reliant is the only way forward. He said being vocal about local products will help businesses flourish again and facilitate the economy.  He was confident that 21st century belonged to India as with new energy and determination, the nation will move forward.  The relief package is about 10% of the Indian GDP and the details were outlined by the Finance Minister, Nirmala Sitharaman. Covering all aspects of the Indian economy, not just the large industries, PSUs but Micro, Small and Medium Enterprises (MSMEs) and agriculture sector were given equal impetus by the allocation of funds. When most countries are dependent on imports, this relief package is all about facilitating the Indian economy and local manufacturing and production.

He quoted the making of PPEs and N95 masks as an example. Though these items were being imported earlier, with the advent of the demand during pandemic, the local production of these items has created a new industrial need. Now, 2 lakh units are being manufactured every day locally. About the pandemic, the PM Narendra Modi was of the view that India needs to learn to live with it while the lockdown bought some time for the government to strengthen the healthcare system.

During the first lockdown, the MSMEs has got impetus from the government to reduce dependence on imports and stress on Make in India. The MSMEs had sought regulations to streamline the prices on various products manufactured by different industries with tax holidays and discounts. They suggested that post- COVID 19, government identifies industries that are heavily dependent on Chinese imports and encourage Make in India for those products.

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Kingdom of Saudi Arabia announces Increase in Value Added Tax
  • Newsletter, Saudi Arabia

Kingdom of Saudi Arabia announces Increase in Value Added Tax

The Saudi Arabian Government recently announced that the VAT or Value Added Tax will be increased from 5% to 15% as of July 1st, 2020.  The increase is one of several measures that have been taken in response to steadily declining government revenues associated with the impact of the Coronavirus on the Saudi Arabian economy.  Reports state that the decline in revenues is attributed to increased healthcare costs, lower oil prices, and reduced economic activity.

How will the VAT increase affect Businesses?

Due to the enhancement of VAT rate, most of the businesses in all industries will be affected in Kingdom of Saudi Arabia (KSA). Additionally, business can expect a higher amount of scrutiny from the General Authority of Zakat and Tax (GAZT) because the VAT has become an important component of the revenue to the state. It is time for businesses to review their costs as even those businesses that are exempt shall be affected.

Whether your sales are fully or partially exempt, you could experience increased costs directly associated with the 10% VAT increase.  Furthermore, the increase will have an impact on all Saudi Arabian industry sectors including the financial, insurance, and real estate sectors.  Although consumers will feel the impact of the VAT increase as well, it remains unknown as to whether or not the lower VAT rate will still apply to foods and utilities in order to mitigate the effects of the increase.

Due to the difference in timing between VAT payments and recovery, businesses can expect the increased tax to impact their cash flow.  Consequently, cash flow planning efforts will have a renewed significance.  Additionally, business owners should review their internal operating processes and systems so as to reflect the higher rate.  In the coming weeks, businesses and consumers can expect to see additional guidance for transitional rules released by the authorities.

The rate increase has affected cash flow of businesses as there has been a difference in the timing of VAT recovery and payments. Thus, the importance of cash flow planning has emerged as a significant aspect of keeping businesses afloat. It is time to take a deeper look at the processes and internal systems of businesses as there is an increased VAT rate.

Additional Considerations

Taxpayers should begin monitoring the impact of the VAT rate increase immediately so they can measure the effect on their cash flow, chain of supply, and daily operations.  As a reminder to taxpayers, the window for making voluntary disclosures without fees or penalties will remain open until June 30th as per last month’s VAT incentive alerts.  This will enable businesses to fully ensure that they are compliant with VAT regulations.

If your company needs assistance for business and corporate advisory consulting or tax advisory services, contact IMC Group.

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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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