LexisNexis Middle East

Lexis Middle East Gulf Tax – Winter 2023 Edition

11/12/202311/12/2023
by Tanya Jain

We are excited to introduce the newest edition of Lexis Middle East Gulf Tax. Our complimentary magazine provides valuable insights into the latest tax and financial developments throughout the region.

This issue covers a spectrum of critical topics reshaping the taxation landscape in the GCC region. It delves into the substantial impact of the OECD’s Subject to Tax Rules (STTR) on Gulf countries and examines the recent alterations in Saudi Arabia’s Real Estate Transaction Tax (RETT). The issue spotlights the new VAT reporting and documentary requirements affecting B2B local supplies of electronic devices in the UAE as of October 30, 2023.

FEATURE: CREATING A STTR

Anand Krishnan from KPMG Qatar delves into the implications of the OECD’s Subject to Tax Rules (STTR) within the GCC states. Exploring the impact of these rules on taxpayers in Gulf countries, this feature sheds light on how these regulations align with Pillar Two’s minimum income tax levels for multinational companies.

FEATURE: SHIFTING SANDS OF RETT

Deloitte Middle East experts, Michael Camburn, Manish Bansal, and Maliha Asghar, dissect the recent changes in Saudi Arabia’s Real Estate Transaction Tax (RETT). They discuss regulatory amendments, providing insights into key developments and potential future changes in this domain.

TAX NEWS ROUND-UP

Stay informed about the latest updates in tax treaties and regulations throughout the region.

WHAT’S CHANGED?

Focusing on the new VAT reporting and documentary requirements for B2B local supplies of electronic devices in the UAE effective from October 30, 2023.

PRACTICAL FOCUS: RELATED PARTIES AND CONNECTED PERSONS

Patryk Karczewski, Partner at Amereller offers practical insights into related parties and connected persons concerning taxation.

TAX PROFESSIONAL PROFILE:

Featuring John O’Leary, Group Head of Tax at Ghobash Group, discussing tax challenges within a diversified business strategy.

ANY QUESTIONS?

Mahmoud Abuwasel from Wasel & Wasel provides an analysis of the UAE Federal Supreme Court’s perspective on related company tax liabilities.

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Lexis Middle East Gulf Tax | Winter 2023

Have you read the Lexis® Middle East Gulf Tax – Spring and Summer 2023 editions? Click the links below to access them.

Lexis Middle East Gulf Tax | Autumn 2023

Lexis Middle East Gulf Tax |Spring 2023

Lexis Middle East Gulf Tax | Autumn 2023

News developments

UAE: New Emiratisation Rules Announced

08/12/202308/12/2023
by Tanya Jain

Arabian Business, 30 November 2023: The UAE’s Human Resources and Emiratisation Ministry has announced new Emiratisation rules.

Under the new rules, companies with between 20 and 49 employees in specific sectors have to hire an Emirati worker in 2024 and another in 2025.

From January 2025, an annual financial contribution will be imposed on companies that fail to meet their requirements in 2024. This will equate to 96,000 AED for each Emirati not recruited.

A financial contribution of 108,000 AED will be imposed in January 2026 for 2025.

Companies can pay their contributions in instalments in agreement with the Ministry.

Companies in the information and communications, finance and insurance, real estate, professional and technical activities, administrative and support services, education, healthcare and social work, arts and entertainment, mining and quarrying, transformative industries, construction, wholesale and retail, transportation and warehousing, hospitality and residency services will be affected.

They will have to do so in line with Cabinet Decision No. 33/5W/2023, which will come into force in January 2024.

The companies were selected in line with specific criteria and information, including the quality of their jobs, the extent of their compatibility with Emiratisation goals, geographic locations, growth and other conditions that would attract Emiratis to work in these economic activities and ensure job continuity.

The activities were also chosen because of their rapid growth rate and ability to provide jobs and a suitable work environment.

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News developments

Saudi Arabia: Zakat, Tax and Customs Authority Issues Final Tax Warning

08/12/202308/12/2023
by Tanya Jain

Arabian Business, 3 December 2023: Saudi Arabia’s Zakat, Tax and Customs Authority has issued a tax warning about unpaid taxes.

The Authority had warned businesses to pay unpaid taxes before the end of the year or face being fined.

They have urged affected entities to take advantage of the Cancellation of Fines and Exemption of Financial Penalties Initiative, which ends on 31 December 2023.

Under the Initiative, taxpayers will be exempt from paying fines for late registration, delayed payments, overdue tax return filings, VAT return adjustments and violations of e-invoicing and general VAT provisions.

To be eligible for the Initiative, taxpayers must be registered, file all tax returns with the Authority and settle all outstanding tax returns.

Taxes owed may be paid in instalments if a request is submitted to the Authority by 31 December and outstanding amounts paid within the timeframe specified by the Authority.

Fines for tax evasion and fines paid before the effective date of the Initiative are not eligible.

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News developments

Qatar: Amendments to Law on Combating Use and Trade of Drugs Approved

08/12/202308/12/2023
by Tanya Jain

Qatar Tribune, 30 November 2023: Qatar’s Cabinet has approved amendments to Qatar Law No. 9/1987 on combating drugs and dangerous psychotropic substances and regulating their trade and use.

The Cabinet also approved a draft law to repeal Qatar Law No. 2/1991 on the imposition of fees for issuing certificates issued by the Interior Ministry and its affiliated entities.

In addition, they approved amendments to Qatar Law No. 7/1991 on the imposition of fees for issuing certificates issued by the Defence Ministry.

They have referred it to the Shoura Council to consider.

The Cabinet went on to approve a decision approving a draft law amending Qatar Decision No. 33/2006 on the establishment of the National Committee for Ports Security and an agreement between Qatar and Uzbekistan on the elimination of double taxation with regard to taxes on income and the prevention of tax evasion and avoidance.

Finally, they approved a draft agreement between Qatar and Kuwait on the avoidance of double taxation and the prevention of financial evasion regarding taxes on income and capital.

Additional reporting from Al-Sharq on 29 November 2023. Read full story here.

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News developments

Oman: Telecommunications Regulatory Authority Launches Public Consultation on Postal Services Licences Framework

08/12/202308/12/2023
by Tanya Jain

Shabiba, 28 November 2023: Oman’s Telecommunications Regulatory Authority has launched a public consultation on a postal services licences framework. It ends on 29 December 2023.

The framework aims to create qualitative and value-added investments, in addition to simplifying and facilitating procedures, developing a workforce, and creating a flexible regulatory environment.

It aims to improve the quality of postal services provided and encourage investment in new postal companies.

Read more here.

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News developments

Kuwait: New Residency Law Finalised

08/12/202308/12/2023
by Tanya Jain

Kuwait Times, 2 December 2023: The Kuwaiti government has announced it has finalised a new residency law. It will refer the law to the Interior and Defence Committees of the country’s National Assembly to consider. It is then expected to be approved by the National Assembly by the end of the year.

The law specifies the regulations for foreigners’ entry, deportation, iqama trade and penalties.

It also grants Kuwaiti women married to foreigners the right to sponsor their husbands and children, provided they haven’t obtained nationality under Article 8 of the new law., This provision relates to expatriate women naturalised by marrying Kuwaiti citizens. In addition, it authorises hotels and aparthotels to report the residence of foreigners.

A Ministerial Decision will determine fees for residency permits, renewals and all entry visas.

The law prohibits iqama trade through exploitation and imposes penalties of up to three years in jail and a fine of between 5,000 and 10,000 Dinars on violators. Only the country’s Public Prosecution will be able to issue residency trade pardons.

Domestic worker amendments mean domestic workers will be allowed to have regular residency permits for the duration of their contract period. If a domestic worker’s permit is cancelled when they leave the job, they must leave Kuwait within the specified timeframes unless a new residency is obtained.

To transfer the domestic worker’s permit, the employer must give their approval and the worker cannot stay outside Kuwait for more than four months without permission from the Interior Ministry.

The Interior Minister will be able to deport foreigners, even if they have residency permits, on public interest, general security, public morality or lack of a legal source of income grounds.

Deportation decisions may include dependents and the deportee can be jailed for up to 30 days. This can be extended if required.

The Interior Minister can exempt deported foreigners from fines after they have left Kuwait. Heads of state, members of the diplomatic corps and official employees are exempt from the law. Foreigners will be able to stay for up to three months. This can be extended for up to a year.

Foreigners can also stay in Kuwait for five years, while children of Kuwaiti women and real estate owners can stay for 10 years and investors may be granted residency permits for 15 years.

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News developments

Dubai Financial Services Authority Waives Regulatory Fees for Sustainability-related Debt Security Listings

08/12/202308/12/2023
by Tanya Jain

Dubai’s Financial Services Authority has announced it will waive all regulatory fees for sustainability-related debt security listings in the DIFC throughout 2024.

This fee waiver comes into force immediately and will apply throughout 2024 until 31 December.

The waiver applies to all environmenta;, social and governance-related bonds and Sukuk categorised as green, social, sustainable, sustainability-linked, climate, climate adaptation, climate transition or similar.

It applies to all new and existing issuers who make a relevant application to the Authority.

The waiver was announced by the Authority’s CEO, Ian Johnston at COP28 and has been approved as part of the Authority’s efforts to accelerate the growth of sustainable capital markets in the DIFC.

It published its first set of Guidelines on best practices for listing green bonds and Sukuk in 2018.

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News developments

Abu Dhabi: ADGM Publishes Discussion Paper on IT Risk Management

08/12/202308/12/2023
by Tanya Jain

The Financial Services Regulatory Authority of Abu Dhabi’s Global Market has announced it has issued a Discussion Paper on IT risk management.

The Paper details the initiatives the Authority is taking to improve its supervisory and regulatory regime in terms of IT risk management.

The Authority are introducing comprehensive and holistic IT Risk Management Guidance that consolidates best practices across various IT domains, including guidance for the adoption of algorithm-driven and decentralised infrastructure solutions.

They are also reviewing existing rules relating to IT risk management to incorporate requirements that will strengthen firms’ practices.

In addition, they are requiring firms to report material IT incidents to the Authority in a standardised format within a prescribed timeframe.

Finally, they are making regulatory technologies or RegTech available to firms to navigate the Authority’s rules and guidance relating to IT risk management.

The Authority has issued regulations and rules on IT risk management and controls for specific IT domains or regulated activities that rely heavily on IT. These regulations and rules underline the standards required of authorised firms in maintaining a robust and resilient IT environment as a central part of their business activities.

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News developments

Lexis Middle East Law Alert: Saudi Civil Transactions Law Supplement

06/12/202308/12/2023
by Tanya Jain

Presenting the latest edition of our complimentary law magazine, the Lexis Middle East – Law Alert! The “Saudi Civil Transactions Law Supplement” is a comprehensive guide tailored for legal professionals, providing a deep dive into critical aspects of civil transactions in Saudi Arabia. This supplement encompasses various legal facets, offering insights and analysis crucial for understanding and navigating the intricacies of the Saudi legal landscape.

The supplement comprises diverse sections, each addressing significant components of civil transactions law:

RISKY BUSINESS: Risk Allocation in Contracts

Explores the strategies involved in managing risk within legal frameworks in contractual agreements. Jawahir Al-Subaie from Z&Co. examines pivotal provisions of the new Civil Transactions Law, including their impact on contract formation, termination, limitations of liability, and more.

RIGHT APPROACH TO REAL ESTATE

Focuses on the legal aspects governing real estate transactions under the Civil Transactions Law. Sarah Gonem of Z&Co. provides insights into how this comprehensive legal framework will operate concerning property rights.

DEALING WITH DEBT AND DEBTORS

Discusses navigating debt-related transactions within legal parameters, particularly concerning guarantees and debt resale. Martin Creek of Z&Co. explains the anticipated changes in handling these aspects under the new Civil Transactions Law in Saudi Arabia.

IN HARM’S WAY: Tort Liability

Explores the principles and complexities surrounding tort liability, offering an understanding of civil wrongs and liabilities. Dr. Yazid Almasoud from Z&Co. explains the application of tort liability in Saudi Arabia under the new Civil Transactions Law.

IN-HOUSE PROFILE

Features Chief Legal Officer Ibrahim Bakhurji‘s insights into the National Infrastructure Fund’s role in developing infrastructure and financing solutions. This section provides valuable perspectives on legal strategies within this sector.

CONTRACT WATCH

Analyses settlement agreements, providing legal professionals with a detailed understanding of dispute resolution through contractual arrangements. Contributor Muneerah Alwahbi, Partner at Z&Co., sheds light on the elements involved in these agreements.

2023 LMELA_SaudiCivilTransactionsLaw_Supplementary

Explore the past editions of the Lexis® Middle East Law Alert and stay up-to-date with the latest news! Click the links below for instant access to older editions.

Lexis Middle East Law Alert January-February 2023

Lexis Middle East Law Alert March-April 2023

Lexis Middle East Law Alert_May June 2023

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News developments

Bahrain: Vacant Land Tax Proposed

05/12/202305/12/2023
by Tanya Jain

Gulf Daily News, 4 December 2023: A group of Bahraini MPs has proposed the introduction of a vacant land tax.

Under the proposal, a tax rate of 1% would be imposed on 1,000 square-metre plots of land not urbanised within five years of being purchased.

It would be imposed annually.

If approved, the 2013 Real Estate Registration Law would be amended.

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