Our Middle East Tax Newsletter aims to provide you with regular updates, insights and practical guidance on the tax implications of doing business in the region.
In this issue, we provide a roundup of the current status of Value Added Tax (VAT) and the most recent tax related developments across the Gulf Cooperation Council (GCC), as well as their implications on the financial position of businesses.
Recent developments in the labour laws of the United Arab Emirates (UAE), Saudi Arabia and Bahrain have been issued to bridge the gender pay gap between men and women. The updates have been in relation to: (i) prohibiting discrimination, whether in pay or otherwise, between male and female employees who carry out the same job in the UAE, Saudi Arabia and Bahrain; (ii) introducing paternity leave in the UAE; and (iii) granting female workers in Saudi Arabia further rights in the workplace (including working in hazardous workplaces and at night).
On 14 October 2020, the UAE Federal Supreme Court passed its judgment on an appeal filed by the UAE Federal Tax Authority (FTA) in relation to the Court of Appeal’s judgment concerning the imposition of penalties resulting from a voluntary disclosure. The case was handled by a UAE local law firm on behalf one of the UAE’s largest financial institutions.
On 29 August 2020, the United Arab Emirates (“UAE“) Government’s Emirates New Agency (Wakalat Anba’a al Emarat, or ‘WAM’) publicly announced that H.H. Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, issued Federal Decree Law No. 4 of 2020, abolishing Federal Decree Law No. 15 of 1972 Concerning the Arab League Boycott of Israel (the “UAE Israeli Boycott Law“) (the “UAE Israeli Boycott Repeal Law“). The UAE Israeli Boycott Repeal Law follows the announcement of the historic peace agreement between the UAE and Israel (known as the “UAE-Israel Abraham Accords” – Treaty of Peace, Diplomatic Relations and Full Normalization between the UAE and the State of Israel) on 13 August 2020 issued jointly by H.H. Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu. Officially signed on 15 September 2020 , the UAE-Israel Abraham Accords (available in full here) outlines a number of areas of intended cooperation, and the establishment of full diplomatic ties in exchange for Israel’s suspension of further annexation of Palestinian territories, between the two states under Article 5 and supplemented in its Annex. This includes: (1) finance and investment; (2) civil aviation; (3) visas and consular services; (4) innovation, trade and economic relations; (5) healthcare; (6) science, technology and peaceful uses of outer-space; (7) tourism, culture and sport; (8) energy; (9) environment; (10) education; (11) maritime arrangements; (12) telecommunications and post; (13) agriculture and food security; (14) water; and (15) legal cooperation.
In brief On 29 August 2020, the United Arab Emirates (UAE) Government’s Emirates New Agency (Wakalat Anba’a al Emarat, or…
On 29 August 2020, the UAE Government’s Emirates New Agency (Wakalat Anba’a al Emarat, or ‘WAM’) publicly announced that H.H. Sheikh Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates (UAE), issued Federal Decree Law No. 4 of 2020 (the UAE Israeli Boycott Repeal Law), abolishing Federal Decree Law No. 15 of 1972 Concerning the Arab League Boycott of Israel (the Israel Boycott Law). The UAE Israeli Boycott Repeal Law follows the announcement of the historic peace agreement between the UAE and Israel (also known as the UAE-Israel Abraham Accord) on 13 August 2020, issued jointly by H.H. Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu. Under the UAE-Israel Abraham Accord, the two states agreed to establish full diplomatic relations in exchange for Israel’s suspension of further annexation of Palestinian territories.
The horrific explosion that recently took place at the port of the city of Beirut is a tragedy for its people. The possible casues of the explosion has brought to mind the cases of maritime fraud that many observers overlook. In recent years, the shipping and maritime trade industry has witnessed a sharp increase not only in the number of fraud cases but also in the diversity and sophistication of fraud. Fraudsters are becoming more creative in laying out and executing their plans, including using modern technology such as computer hacking while also preserving some tried and tested traditional methods, such as document fraud. Ship owners are also finding themselves under pressure to earn new business and, to that end, many of them ignore exercising due diligence when dealing with new business partners. While ports are adopting new technologies this too has the potential to enable new certain types of fraud (such as automating container operations).
The Abu Dhabi Court of First Instance recently dismissed an appeal filed by the Federal Tax Authority (FTA) against fines and penalties imposed by the FTA against a UAE company, a Dubai based beverage distributor, in connection with excise taxes. Baker McKenzie Habib Al Mulla represented the company. The court also ordered that the FTA repay the full amount of the penalties to the company. The Tax Dispute Resolution Committee had previously ordered the reduction of tax penalties levied on the company from the amount of AED 20.8 million to AED 8.8 million. The FTA appealed to the Court of First Instance against that decision. Baker McKenzie Habib Al Mulla had also represented the company at the Tax Dispute Resolution Committee, and the company counter appealed that no penalties were legally due. The Court of First Instance rejected the FTA’s appeal against the decision of the Tax Disputes Resolution Committee, and allowed the company’s appeal that no penalties should be due.
In brief On 25 May 2020, His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince…
In September 2018, the UAE issued the Foreign Direct Investment Law (FDI Law) to open up the UAE mainland market to foreign investors in certain sectors of the economy. This was followed by the announcement on July 2019 of the relaxation of foreign ownership restrictions for 122 business activities, specifically in the…