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TaxFlash
27 October 2022
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TaxFlash has been designed to keep our clients and contacts up-to-date with relevant tax developments. Please contact the Keypoint tax team if you have any questions about anything covered in this TaxFlash. Click here if you'd like to be added to our mailing list.
Bahrain
  • The Ministry of Industry and Commerce (MoIC) has issued an official letter to MOIC-regulated entities confirming that the deadline for submission of economic substance (ES) returns for FY 2021 is 11 November 2022.
  • Bahrain Customs and the Supreme Council for Women held a virtual meeting to discuss developing Bahraini women as customs clearance experts.
  • The head of Bahrain Customs participated in the 2022 World Customs Organization’s technology conference and exhibition.
  • Bahrain Customs has published infographics on vehicle modifications for travel.
  • The NBR has recently updated its excise goods list.
  • Bahrain’s finance and national economy minister received Greece’s minister of development and investments to discuss bilateral relations between the two countries.
  • The president of Bahrain Customs recently participated in a discussion held by the World Customs Organization with students of the University of the Netherlands.
Saudi Arabia 
  • A team from the Zakat, Tax and Customs Authority (ZATCA) academy met with Bahrain Customs to exchange experiences and discuss ways to enhance cooperation.
  • ZATCA received the 2022 innovation award during an event organized by Saudi Arabia’s Communications and Information Technology Commission (CITC).
  • ZATCA received a group of students from Dar al Uloom University’s faculty of law to explain ZATCA’s initiatives and projects and answer students’ questions about ZATCA.
  • ZATCA’s board held its eighth virtual meeting of 2022 under the chairmanship of the minister of finance.
  • ZATCA participated in the Noura Partners exhibition organised by Princess Nourah bint Abdulrahman University.
  • ZATCA has celebrated the graduation of the fourth batch of its capacity building programme.
  • ZATCA has published a second edition of Zakat collections (in Arabic).
  • ZATCA is hosting virtual workshops (in Arabic) on deposit zones and warehouses (30 October 2022) and transaction pricing (1 November 2022).
  • ZATCA is reminding taxpayers about its ongoing tax amnesty.
  • ZATCA has released a circular on the tax treatment of mortgage insurance portfolios.
UAE
  • The Federal Tax Authority (FTA) has announced that it will start accepting magnati as its new tax liability payment method from 30 October 2022, replacing eDirham.
  • The FTA has issued infographics on the registration of excise goods and time required to register customs clearance companies.
  • The FTA has shared a video on administrative exception decisions and related parties.
  • The FTA delivered an entrepreneurs’ tax awareness workshop on 19 October 2022.
  • The FTA organised a padel tournament for employees to encourage them to develop their physical skills.
  • Dubai Customs met Dubai Municipality to discuss the benefits of its authorised economic operator (AEO) programme.
  • Dubai Customs met officials from the US embassy to discuss tackling counterfeit goods.
Qatar
Oman
  • No updates this week.
Kuwait
  • No updates this week
Beyond the GCC
  • The Organisation for Economic Co-operation and Development (OECD) recently issued guidance on the implementation of country-by-country (CbC) reporting in English and French.

Technical tip | Bahrain

Proportional deduction ratio
 
The default proportional deduction method outlined in Article 59 of Bahrain’s VAT executive regulations uses the value of supplies made during a tax period, indicating that a proportional deduction ratio (PDR) can be calculated simply by using the figures reported in a taxpayer’s VAT return. However, taxable persons making supplies of capital assets or supplies outside Bahrain’s territorial scope will need to undertake certain adjustments to the VAT return’s figures to calculate their PDR. Supplies of capital assets must be reported in VAT returns but their value should be excluded from any ratio calculation. Equally, supplies outside Bahrain’s territorial scope must not be reported in the VAT return but their value can be added to the ratio calculations.

If you have any questions about calculating your business’ PDR, contact a member of Keypoint’s tax team.
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© 2022 KEYPOINT - DISCLAIMER

TaxFlash is intended to provide general updates in relation to tax in the GCC. It is not a substitute for professional advice. You should seek appropriate professional advice from a tax advisor before making any decision relating to your particular circumstances.
 
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