Abu Dhabi’s Economic Development Department has announced it has increased the fines for entities using bogus economic licences. The fines have been increased to 50,000 AED and violators will be blacklisted. The announcement follows the Department intensifying its monitoring of compliance with the regulatory regime.
We are still awaiting the official publication of the Decree-Law and are still monitoring this legislative development with our Publishing Partners, SADER Legal Publishing.
In other developments in this area, the UAE’s Federal Tax Authority board have approved changes to the UAE tax system, including new procedures to adopt a selective tax system in October and VAT in January 2018. The board went on to approve the proposed fees and fines in line with the Authority's remit as laid out in Federal Decree-Law No. 13/2016. Finally they approved the penalties to be applied for breaches of Federal Law No. 7/2017 and Federal Decree-Law No. 8/2017. The Minister of State for Financial Affairs said work on issuing executive regulations to these laws to provide specific details about their implementation is underway.
Dubai’s Financial Services Authority has signed an agreement with Hong Kong’s Securities and Futures Commission to establish a framework for cooperating in FinTech innovation. The agreement was signed for the Authority by its Chief Executive, Ian Johnston and for the Commission by its Chief Executive, Ashley Alder. Under the agreement, both Authorities will share information on FinTech developments and innovations in their respective markets. Both regulators will also refer innovative firms to the other’s markets and provide them with regulatory guidance.
Bahrain’s Chamber of Commerce and Industry has announced it is postponing the implementation of Bahrain Edict No 130/2016, which would have come into force next month, until March 2018. It follows a series of meetings between the Industry, Commerce and Tourism Ministry and the Chamber about the proposed increase. The meeting between the Ministry and the Chamber followed directives from HRH Prime Minister Prince Khalifa bin Salman Al Khalifa.
This week the UAE’s President has issued the Federal VAT Decree-Law (Federal Decree-Law No. 8/2017) so we focus on this tax development in this issue. We have requested this Law as a priority from our Publishing Partners, SADER Legal Publishing. We will keep you updated as and when this Law is Gazetted and when it is available on our service.
From 1 January 2018, the 5% tax will be imposed on the import and supply of goods and services at each stage of production and distribution. It includes what is considered a supply and specifies the goods and services which will be zero-rated as well as the exceptions. The tax imposed will be the responsibility of a Taxable Person who makes taxable supplies or what is considered to be a supply or on import.
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.
