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Newsletter, Saudi Arabia

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

May 11, 2020

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 18^th, 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 18^th and June 30^th, 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 18^th March to 20^th June 2020 and this holds valid for non-resident taxpayers.

Returns and voluntary disclosures – VAT returns that were due prior to March 18^th can be filed up until June 30^th without incurring penalties. Taxpayers are allowed to make amendments to previously submitted returns up until June 30^th 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 1^st 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.

Bahrain, Newsletter

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

May 11, 2020

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 29^th, 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 31^st, 2019 will have until June 30^th, 2020 to file their notifications and relative reports with the MOICT. The original deadline date was March 31^st. 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.

Newsletter, Oman

Corporate Tax Relief for Oman Businesses impacted by COVID-19

May 11, 2020

As of March 31^st, 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 31^st
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 30^th from March 31^st, 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 30^th 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 31^st 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).

Newsletter, Saudi Arabia

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

May 11, 2020

On March 20^th, 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 18^th through June 30^th:

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.

Newsletter, U.A.E

Deadline Updates for United Arab Emirates Economic Substance Regulation Notifications

May 11, 2020

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 31^st 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 31^st notification deadline no longer applies. Regardless, the DIFC confirmed that filing it during the 2^nd 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 31^st.

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

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 1^st, 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.

Newsletter, U.A.E

DIFC Foundations now being accepted as Direct Shareholders by JAFZA

April 29, 2020

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.

Newsletter, U.A.E

VAT Refund for Foreign Businesses in the UAE

April 23, 2020

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 31^st 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.

Newsletter

SaaS accounting solutions to help businesses tide over the Coronavirus crisis

April 9, 2020

The world economy is staggering under the pressure of the CoVID-19 pandemic, which has now affected nearly 193 countries and impacted the livelihood of countless people all over the globe.

As social distancing is the norm now, the businesses of all sizes are finding it hard to maintain a smooth run. The situation has impacted global economies, with billions of dollars already been spent and the markets brimming with uncertainty.

Difficult times for the businesses

The firms are presently walking on tightropes, as they need to make sure of the safety of the workforce, as well as keep themselves from faltering in compliance and accounting. CoVID-19 has led to a never seen before the crisis in the businesses. However, good business leaders are the ones who can successfully navigate through these adverse situations.

The silver lining for the businesses

Though for most of the small businesses, it is difficult now to manage the teams, allot work, and oversee compliance and accounting, the firms that have embraced SaaS-based solutions are faring pretty well.

Going for cloud software, for Accounting and Bookkeeping Services, helps the businesses to fight all the unprecedented challenges that can arise. It helps businesses in the communication, delegation, and monitoring of the work, as well as ensuring the safety of the teams working from homes. Thus, cloud-based solutions are the way to help businesses keep up the details of compliance and accounting, in the times of such crisis.

Advantages associated with business accounting software

SaaS, the cloud accounting software, is a helpful tool where the applications get hosted by service providers, and that curbs the issues of maintaining and installing software. Such an automated cloud accounting software can be really advantageous for the companies:

1. Widespread accessibility:

A cloud accounting software is for you if you want access to your bank accounts, view the data, track sales, and inventory from anywhere and at any time. The technology allows you to view your data in real-time and access what you need without any glitches.

2. Work faster and smarter:

Bookkeeping can turn out to be a rather tiring and monotonous job with all the daily dose of invoicing, billing, and so on. When you Outsource Finance and Accounting Services by using an automated cloud accounting software, you not only get relief from doing all of these, but also get the assurance that everything is being taken care of accurately.

3. Easy data backup and storage:

Automated cloud accounting software frees you from those much-known troubles of backing up and storing data. Small businesses can take advantage of low cost but high-quality cloud software solutions, which will not be affected by the fact that the employees are working from their homes.

4. Secured data & privacy:

You get role-based access controls in all cloud accounting software solutions; there is no need for you to worry about privacy or data breaches. Compliance can be made even simpler when AI-enabled tools are added to the mix.

Summing up

Medical emergencies, natural disasters, and economic crises are all situations where a business can be hit without any prior warning and with an upheaval of a large scale. Thus, the need of the hour is to rely on such technologies that can help businesses tide over such situations. If you are yet to adopt on compliance and accounting solutions that are SaaS-based, it is high time for you to start considering it now.

Newsletter, Singapore

Chan Chun Sing announces support packages to help businesses for the next three to six months

April 9, 2020

Mr Chan Chun Sing, the Trade and Industry Minister of Singapore, recently announced that the Government has multiple relief measures planned to be executed to support the workers and businesses in the coming 3-6 months, as the CoVID-19 outbreak continues to threaten the country.

In a recent interview, he mentioned that delivering the necessary support packages is of the utmost priority for now, and the Government is ready to dole out more aids if needed. The Government announced a support package of a whooping S$48 billion last week for shoring up support for the economy, Along with the amount of S$6.4 billion previously mentioned in the budget this year, the Government is known to be earmarking about S$55 billion, or roughly eleven per cent of the GDP

When asked about the number of businesses the supplementary budget of the Government can support and for what duration of time, Mr Chan clearly stated that the exact number of businesses that may go under is difficult to be specified right now, but the Government will make sure to try and make the maximum number of businesses stay afloat.

He further added that the current priority is to put the available budget and schemes to use for helping the businesses and workers manage the next 3-6 months. The Government is ready to launch a couple of schemes that will help businesses with their immediate financial needs.

Mr Chan cited measures like the Job Support Scheme and property tax rebates to help businesses stay afloat.

The massive support package is expected to save many jobs, and help the ones that might get displaced to get rehired to other available roles. Apart from the short term issues, the support package is also expected to address the long term problems of the country. It includes continued efforts for strengthening the abilities of local workers and businesses, like building digital capacities, such that Singapore can be the first one to rise at a time when the recovery is found. Besides, it’s all about reinstating the confidence in the nation’s economy.

Mr Chan said that the depth of the nation’s reserves and the size of the announced package would make the people confident about the ability of the nation to brave the storm, and in fact, it will also be noted keenly by other observers. So, when it comes to an investment decision in the future, the observers will definitely think of Singapore as one of the nations that they can believe in.

It was also noted by him that the workers and businesses would be relieved in knowing the fact that the Government has enough in the national reserves to give out aids.

The Minister also mentioned that supply chains had witnessed serious disruption, And the bigger question is how these businesses can maintain their capabilities and connectivity for the country. He said that the short-term challenge is a loss in the ability of selling, but the bigger concern is the loss in the ability to produce, which indicates the fall of company capabilities.

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Blog

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

Why is this so important?

JAFZA IBC’s Before

JAFZA IBC’s After

Additional Considerations

Which businesses can claim VAT refund?

Other conditions

Difficult times for the businesses

The silver lining for the businesses

Advantages associated with business accounting software

1. Widespread accessibility:

2. Work faster and smarter:

3. Easy data backup and storage:

4. Secured data & privacy:

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