Welcome to the August edition of our tax newsletter, bringing you news on global and regional tax developments.
OECD: Countries bring preferential tax regimes in line with international standards
On 5 august the Organisation for Economic Cooperation and Development (OECD) announced:
Progress continues in combatting harmful tax practices as new outcomes on the review of preferential tax regimes have been approved by the OECD/G20 Inclusive Framework on BEPS, which groups 139 countries and jurisdictions on an equal footing for multilateral negotiation of international tax rules.
According to a related OECD release, the Forum on Harmful Tax Practices in April 2021 accepted new conclusions on 25 regimes as part of the implementation of the BEPS Action 5 minimum standard.
- The Australian offshore banking regime has now been repealed, with grandfathering provided to existing taxpayers within approved timelines.
- The Philippines will repeal its regional operating headquarters regime as of 1 January 2022 (without grandfathering) and is "potentially harmful but not actually harmful" for the time being.
- The United States confirmed its intention to repeal the foreign-derived intangible income (FDII) regime, which has therefore been classified as "in the process of being eliminated.”
- The governments of the Dominican Republic, Gabon, Sint Maarten, and Jordan made commitments for six other regimes that are now "in the process of being amended/eliminated.”
- Trinidad and Tobago was not able to fulfil its commitment to repeal its special economic zone regime within the agreed timelines, and it is now considered "harmful.”
- Two newly introduced regimes—in Hong Kong and Georgia—were concluded as being "not harmful."
- Twelve regimes are under review for the first time (Armenia, Eswatini, Honduras, Lithuania, and Pakistan).
The United Arab Emirates (UAE)
Dubai Customs released Customs Notice no. 13/2021 related to the import of goods between companies via e-commerce channels
This notice applies to commercial companies, including free zone companies and customs warehouses, and will enter into force on 14th November 2021. The Tariff and Origin Department at Dubai Customs is responsible for resolving any disputes concerning implementation.
- Companies wishing to enroll in e-commerce activity must register with Dubai Customs customer registration system without the need to add the activity to their trade license.
- Logistics companies may clear goods on behalf of companies registered under the Dubai Customs customer registration system.
- The import/export of goods for e-commerce purposes must be done by processing the Customs Declaration through Dubai Trade portal in accordance with regular procedures.
- Customs Declarations with value of goods not exceeding AED 30,000 will be exempted from relevant customs service charges.
- Companies are required to obtain necessary approvals from competent authorities for importing restricted goods or goods subject to special procedures.
- Electronic documents and invoices are accepted for customs clearance and the records for the same must be retained for submitting to Dubai Customs upon request.
For more details see the full Customs Alert here.
Kingdom of Saudi Arabia
Saudi Arabia introduces new national rules of origin
Following an announcement by the Ministerial Decision No.3852, new National Rules of Origin (the Rules) have been introduced that determine the conditions to be met for goods imported into Saudi may qualify for GCC preferential treatment based on the GCC Unified Economic Agreement.
The Zakat, Tax and Customs Authority (“ZATCA”) has issued new guidance clarifying the specific conditions that must be met prior to the submission of any request for a customs duties refund in order to verify the Rules of Origin (“RoO”) for commodities imported from GCC countries.
Read the full alert on our website.
The filing period for Economic substance returns for the FY2020 in Bahrain is from 8 August to 12 September 2021
On 10 August 2021, Ministry of Industry Commerce and Tourism (MoICT) issued circular number FAEI/11/MSJ/2021 stating that the filing period for ES returns for the fiscal year end of 2020 will be from 8 August 2021 to 12 September 2021. Entities that fail to comply with the filing period will be subject to the violations and sanctions, which includes suspension of the CR, trader strike off, fines, and referral to public prosecution.