Dubai’s Airport Freezone Authority has released a detailed halal industries guide as part of its campaigns to contribute to the Emirate’s aim to become the region’s Islamic economy capital. The guide is the first of its kind. It defines Halal products in different industries and highlights numerous financial investment possibilities for international financiers.
Bahrain’s Ports and Maritime Affairs Department at the Transport and Telecommunications Ministry has informed all companies and commercial enterprises registered in Bahrain they should apply for a licence with the Department within six months. This is line with Bahrain Law No. 9/2017 related to the charter of maritime service licences. The Department said companies which work in managing and operating private and public ports, maritime guiding, maritime shipping agencies, ship agencies and other related services should apply for the licence.
This week the spotlight is on tax developments in the UAE, where the country’s President has issued the excise tax law covering the taxation of tobacco, fizzy and energy drinks. It will be published in the Official Gazette and come into force on 1 October 2017. Excise tax at 100% will be levied on tobacco and energy drinks and 50% on fizzy drinks (excluding carbonated water) under Federal Decree-Law No. 7/2017. The regulations to the Law will come into force by December 2017. The law details the tax’s general rules and procedures. Article 16 of the law says some products liable for excise which are used in the manufacturing process for other goods also subject to excise taxes could get special discounts. More details will be given in the regulations to the law. Under the law products liable for duty which are exported could be exempted from duty, or be liable for a discounted rate.
Elsewhere, according to local newspaper reports, the UAE’s Federal Tax Authority has announced schools and nurseries will be zero-rated for VAT purposes. The Authority added schools and nurseries should therefore not increase their fees next year. Being zero-rated allows companies and institutions to reclaim VAT paid on business costs and services.
The UAE’s Federal Tax Authority has announced online VAT registration for businesses will be introduced next month. It follows the issuing of the Tax Procedure Law (Federal Law No. 7/2017) last month. The Excise Tax and VAT Laws are expected to be issued in the third quarter this year and the relevant regulations will be issued in the fourth quarter.
Bahrain’s King has issued two Laws, including Bahrain Law No. 29/2017 approving the Kingdom’s accession to the Agreement on Third Party Indemnity for Damage Caused by Aircrafts. He also issued Bahrain Law No. 30/2017 approving the Kingdom’s accession to the Agreement on Third Party Indemnity for Damage Caused by Unlawful Acts of Interference which includes Aircrafts. Both Laws will be published in the Official Gazette.
This week the spotlight is on legal and regulatory developments in Qatar, where the Emir has issued a new Law amending the country’s Labour Law and Civil and Commercial Procedures Law. Qatar Law No. 13/2017 amends Qatar Law No. 14/2004 and Qatar Law No. 13/1990. Under the new Law, one or more committees will be set up at the Administrative Development, Labour and Social Affairs Ministry to resolve labour disputes. It will be chaired by a Court of First Instance judge who will be chosen by the Supreme Judiciary Council. Two committee members will be nominated by the Administrative Development, Labour and Social Affairs Minister and one of them will have to have accounting experience.
The Minister will issue a decision to regulate the committee’s work and operations. Its secretariat will be assumed by one or more Ministry employees and this will be stated in the Ministerial Decision. Only the committee will be able to resolve disputes arising from the Law’s implementation or employment contract. It will give a decision on the dispute within three weeks of its first session reviewing it. The committee secretariat will notify both parties in the dispute about the committee’s procedures and decisions through registered correspondence at their residence or business centres, or through other suitable means.
The committee’s decisions will include its rationale, will be binding and will have to be executed immediately. Cases which should be heard and resolved by the committee will not be heard before the courts before they hear them. However, the related courts will continue to see the related cases which were filed before Qatar Law No.13/2017. Before lodging a case with the committee, employees will have to raise concerns with their employer within seven days of being advised of an issue. The complaint will have to be resolved within seven days and if an employee does not receive a response in this time, it will be considered to be rejected. Employees will be able to contact the committee directly where they are dismissed or terminated arbitrarily by an employer and the committee will look into the issue and reach a decision based on the facts.
Qatar’s Communications Regulatory Authority has launched a consultation on its amendments to the 2016 Spam Regulation following its regulatory review. The consultation ends on 1 October 2017. The amended regulation sets out the particular obligations on service providers, and both senders and users of electronic communications for direct marketing in line with Qatar’s regulatory framework. The aim is to align the regulation more closely with the Data Privacy Law published last year and reduce the number of spam complaints, direct marketing and cyber-crime.
Kuwait’s Cabinet has approved the draft laws regarding the GCC unified selective excise tax and VAT. The drafts have been referred to the National Assembly for their consideration. The selective tax will be levied at 100% on tobacco and energy drinks and 50% on soft drinks. The draft bill includes a fine of up to 4000 Dinars for taxpayers who fail to comply with the tax rules. Those who report people who don’t comply will be rewarded. VAT will be introduced across the GCC on 1 January 2018 at 5%.
Weekly Spotlight: Saudi Arabia has announced foreigners will be able to own 100% of construction and engineering businesses
This week the spotlight is on legal and regulatory developments in Saudi Arabia, where the Commerce and Investment Ministry and the General Investment Authority (Sagia), have announced foreigners will be able to own 100% of construction and engineering businesses. It follows a consultation which has recently concluded. Foreigners will be able to own 100% of these businesses so long as they have a 10-year operational track record and have a presence in at least four other countries. Sagia will be able to waive these restrictions if an application is considered to be in the Kingdom’s best interests.
Elsewhere, the Head of Saudi Arabia’s General Authority for Civil Aviation, Abdul Hakim Al-Tamimi has announced all of the Kingdom’s airports will be privatised by December this year. All of the country’s airports will be transferred to the Saudi Civil Aviation Holding Co first. They will then be transferred to the Public Investment Fund (PIF). The privatisation will be carried out in three ways. The first will see an airport transferred to a company like Riyadh’s King Khaled International Airport, where a minority holding was sold and an airport board of directors will then be established which will manage the company. The second is known as operation and maintenance like Jeddah’s King Abdul Aziz International Airport in Jeddah where the Civil Aviation Authority bears the capital cost of establishing the project and shares the income with investors. The third method is through Build, Operate and Transfer, like Madinah’s Prince Mohammed bin Abdul Aziz Airport where employees are an investor’s responsibility. The investors bear the capital cost of the project and share the income with the Authority.
There is still uncertainty surrounding the expected implementation of the new VAT regime. Lexis Middle East Law cuts through the ambiguity with a wide range of practical commentary from leading international and local law firms. Here is a selection of some of the articles that have been recently uploaded:
How VAT legislation will change the business set up models in the UAE
BSA Ahmad Bin Hezeem & Associates
VAT Law-Analysis of VAT implications on corporate group structures
Hadef & Partners
How will VAT impact the UAE Real Estate sector?
Hadef & Partners
VAT–Is your business prepared?
Clyde & Co
VAT and Commercial Contracts
Lexis Middle East Law provides the largest online collection in the world of articles and commentaries on Middle East law, with contributions from hundreds of regional legal experts.