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TaxFlash
18 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
  • 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 National Bureau for Revenue (NBR) has updated its excise goods list.
  • The NBR has released statistics for Q2 2022.
  • The NBR has provided information on the Prime Minister’s Fellowship Program.
  • The NBR has issued infographics on the display of VAT registration certificates and simplified tax invoices.
  • The NBR will be hosting a virtual workshop on VAT implementation awareness on 29 August 2022.
Saudi Arabia 
  • The Ministry of Municipal and Rural Affairs and Housing and the Zakat, Tax and Customs Authority (ZATCA) have signed two memoranda of cooperation.
  • ZATCA recently thwarted an attempt to smuggle more than 1.1 million narcotic pills into the kingdom.
  • ZATCA has issued infographics on the conditions for verifying the origin of GCC goods.
  • The last day of registration for the binaa alkafaat programme is 18 August 2022 (today).
  • ZATCA has announced a virtual workshop on zakat treatments of investments on 28 September 2022.
UAE
Oman
Qatar, Kuwait and beyond the GCC
  • No updates this week.
 Technical tip | Saudi Arabia and Bahrain
Related party transactions

Related party transactions have always been an area of interest to tax authorities globally. To ensure related businesses do not try to underpay tax, tax authorities often devise special rules for related party transactions.
 
Both Saudi Arabia’s tax authority, the Zakat, Tax and Customs Authority (ZATCA), and Bahrain’s National Bureau for Revenue (NBR) have emphasised that where a supply is made between related parties, tax must be accounted for at the fair market value, rather than the consideration paid, under certain circumstances. The tax authority can request evidence to verify the correct amount of VAT has been paid.
 
Taxpayers should review any transactions carried out with related parties to ensure they have complied fully with the rules.
 
To further discuss the VAT implications of related party transactions, please contact our Keypoint 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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