VAT in the Middle East: What’s the latest?
VAT in the Middle East is relatively new compared to the more mature regimes of Europe, meaning updates, improvements and rule changes are still common as authorities seek to achieve a fair, robust and effective system.
As we head into Q2, we’ve taken a look at some of the looming deadlines and regulatory amendments set to impact on businesses trading in the region in the coming months.
Businesses trading in Saudi Arabia must take urgent action to ensure they will comply with new e-invoicing regulations due to come into effect on 4th December 2021.
The General Authority of Zakat & Tax has this week invited e-invoicing solution providers to register with the country, as well as publishing a set of technical specifications covering everything from security standards to data requirements.
Is your business ready? If not, you’ll need to consider not only e-invoicing software, but also tax processing to ensure the figures on your invoices are accurate. Experts believe the arrival of e-invoicing will lead to fewer opportunities for tax fraud so it’s worth making sure your workflows – whether manual or automated – are in top shape.
Meanwhile, an amnesty on tax penalties for non-compliance is ongoing. Businesses have until 31st May to confess to acts of inaccurate tax reporting in exchange for a 75% waiver of penalties.
We’re just weeks away from VAT in Oman going live and the Oman Tax Authority has issued an important reminder for businesses in the category of OMR 1 million+ to register for the tax. Businesses with annual supplies of between OMR 500,000 and OMR 1 million can also now apply for registration, with those companies due to implement VAT on 1st July.
Businesses in Bahrain must now report on tax on a country-by-country basis, making it crucial to have processes in place that allow for the accurate and efficient determination and application of local tax rates and regulations in every nation in which a company trades.
The Central Bank of Bahrain has advised that the Ministry of Industry, Commerce and Tourism will soon determine the form and method for submitting the country-specific reports.
United Arab Emirates
The UAE’s Federal Tax Authority has released a VAT public clarification on the bad debt adjustment rules. Certain conditions – such as suppliers having to notify customers once a debt has been written off – have been introduced to help businesses recover unpaid VAT on bad debt. The notification can be made by email, letter or post must contain certain information, including the invoice number, date of invoice and the amount being written off.