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TaxFlash
4 August 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
  • National Bureau for Revenue (NBR) representatives continue to work with teams from the Ministry of Industry and Commerce (MoIC), inspecting shops and commercial establishments to check VAT is being applied correctly.
  • According to ministerial order 106 of 2018, any MOIC-regulated entity that carried out a ‘relevant activity’ in Bahrain in FY2021 should have submitted an economic substance (ES) return using the NBR’s international tax information exchange system (ITIES) portal by 31 March 2022. We understand that the deadline has been extended to mid-August 2022 although an official circular is yet to be published by the MoIC. For support with completing and submitting your ES return, contact Keypoint’s tax team.
  • The NBR is hosting a virtual workshop on 29 August 2022 to discuss VAT basic concepts and filing process.
  • Bahrain customs clearance department recently participated in the national workshop presented by the world trade organization.
Saudi Arabia 
  • The Zakat, Tax and Customs Authority (ZATCA) seeks to achieve the goals of the 2030 vision through the competencies program.
  • ZATCA held a workshop on "National Rules of Origin" in cooperation with the Riyadh Chamber of Commerce on 2 August 2022. 
  • ZATCA is hosting virtual workshops on estimated Zakat calculations on 8 August 2022 and on 10 August 2022.
  • ZATCA shared the various training paths offered on the competencies program.
UAE
Oman
  • The Oman tax authority (OTA) has announced the opening of a new branch in Dhofar Governorate.
Kuwait, Qatar and beyond the GCC
  • No updates this week.
 Technical tip | Bahrain
Economic substance updates

As highlighted in our previous TaxFlashes, Bahrain’s Ministry of Industry, Commerce (MoIC) set the deadline for economic substance (ES) return submissions for financial year 2021 as 31 March 2022.

All MoIC-regulated entities that carried out a relevant activity - see below - in FY2021 are required to register on the National Bureau for Revenue’s (NBR’s) international tax information exchange system (ITIES) portal and be authorised before filing an ES return. The ITIES portal has undergone significant modifications, including:

  • Distribution, headquarter, holding, leasing, shipping and intellectual property activities have been segmented in accordance with ministerial order 106 of 2018 (MO 106).
  • All entities performing (or listing) a relevant activity must meet substance tests. Equity holding companies and businesses with operations only in Bahrain - who were previously exempt - must now provide information (and supporting documents) on management presence, core income generating activities, adequacy of employees and details on controls and records.
  • The number of mandatory fields has increased.

Entities that carried out a ‘relevant activity’ in FY2021 but that did not file an ES return using the ITIES portal by 31 March 2022 may receive a CR violation or suspension, be fined or even be struck off.

However, we understand there is informal communication from the MOIC that the ES filing deadline has been extended to mid-August 2022. Given that there is no official communication from the MOIC on the extended deadline, we strongly recommend any outstanding ES returns are filed as soon as possible.

For support with completing and submitting your ES return(s), please contact abhinaya.thirumalai@keypoint.com or alaa.thamer@keypoint.com

Accurate activity codes are both a legal requirement and a sensible business decision. If you wish to discuss updating your commercial registration, please contact sawsan.mohammed@keypoint.com.

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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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