GCC Tax Flash News – January 2025

United Arab Emirates (UAE)

• The Federal Tax Authority (‘FTA’) started sending notifications to the Corporate Tax registrants to review their obligation for VAT registration to ensure compliance and avoid potential penalties.
• Sharjah’s Consultative Council (SCC) approved a bill on extractive and non-extractive natural resources corporate tax for regulating imposition of tax on the Companies operating in the extraction, use of natural resources and other related activities.
• Activation of option to change the legal entity type from resident to non-resident foreign business activated on EmaraTax portal.

• Public Clarification (vide no. VATP039) issued on Crypto Mining activity clarifying certain aspects related to definition, taxability and input tax credit on such activities
• Cabinet Decision no. (127) of 2024 extended the scope of domestic reverse charge mechanism to include precious metals and stones
• New functionality introduced to check the status of service requests raised by a registered person on EmaraTax portal
• FTA urged the Tax registered persons to update their tax records before 31 March 2025 to ensure compliance and avoid penalties

• Ministerial Decision issued for amending the Excise Tax regulations and providing clarity on HSN code applicable on e-smoking device and liquids used therein

• Newly registered companies with Dubai Multi-Commodity Centre (DMCC) required to adopt the suffix “FZCO” (or “FZ Branch” for branch establishments) instead of “DMCC”

Kingdom of Saudi Arabia (KSA)

• The Zakat, Tax and Customs Authority (‘ZATCA’) issued VAT guide addressing various issues related to VAT assessments, amendments of VAT returns and objection to ZATCA’s decision

• Amendments related to deductions criteria (i.e., deduction formula and equations etc.) under Zakat Executive Regulations proposed concerning real estate projects under construction as well as off plan projects

• ZATCA published guidelines for WHT application under DTA with practical insights and applications

• ZATCA published a guide addressing tax treatment on transactions related to Build, Own, Operate, and Transfer (‘BOOT’) contracts. It clarified the tax treatment on property ownership transfer and effective possession by an operator to the beneficiary and certain other aspects

Kingdom of Saudi Arabia (KSA)

• Last date for applying for the Domestic Minimum Top-up Tax (DMTT) registration for the relevant entities of MNE Group was 30 January 2025
• Two guides published for in-scope entities for DMTT, registration requirements and DMTT registration

• Oman and Bahrain’s Shura Council approved DTAs with Hong Kong and the UAE

• VAT guides issued on Simplified VAT return form, VAT return filing and VAT deregistration
• Key changes related to VAT treatment of rental spaces for retail and promotional stands introduced

• The Ministry of Industry and Commerce (‘MoIC’) of Bahrain issued decision outlining terms and conditions for the firms and professionals providing tax consulting service in the Kingdom
• Timeshare Law introduced aiming to regulate timeshare activities

• A year after the move unanimously rejected by the Shura Council, the MPs have once again unanimously approved a two per cent tax on each expat remittance. If the Shura Council rejects it for a second time, then a joint session of the National Assembly will take on this for vote

Sultanate of Oman

• The State Council and the Majlis A’Shura Council of Oman approved the draft law on personal income tax

• The Oman Tax Authority urged the importers of soft drinks, energy drinks and other Excise products to implement the third phase of Digital Tax Stamp

State of Kuwait

• The Civil Code of the Decree-Law No. 67 of 1980 amended to extend the statute of limitations for tax-related claims from 5 years to 10 years

State of Qatar

• The General Tax Authority announced major changes in Corporate Tax return filing requirements for Qatari/ GCC Tax-Exempt liberal professionals effective from the tax year 2024 onwards

Organization for Economic Co-operation and Development (“OECD”)

• The OECD released guidance on:
  • List of jurisdictions which have a qualified IIR and Safe Harbour QDMTT based on transitional self-certification mechanism
  • Neutralisation of Tax benefits provided by the Governments beyond the grace period
  • Updates on GloBE Information Return