Tax Newsletter – Edition July 2021

This Tax Newsletter is focused on updating about the latest Tax updates in GCC.

UAE: Value Added Tax update on Automotive Sector (VATGAM1)

Federal Tax Authority (FTA) has recently issued a guide on Automotive Sector. This guide provides guidance and information on how VAT affects businesses, which operate within the automotive sector.

The guide mainly covers the following topics with detailed explanations and examples.

• Sales of New Car within UAE as outright sales or under the hire purchase agreement
• Sale of pre-owned cars
• The import-export of cars,
• Leasing of Cars,
• Warranties related to car
• Promotions/Discounts provide on the car or provided with Car
• Auctioneering

FTA has clarified the position on the additional recovery made by the leasing companies other than leasing charges e.g. Salik charges. It has been mentioned in the guide that these are in nature of recharge of cost to the customer and will be subject to value-added tax (vat) at 5%.

____________________________________________________________________

UAE VAT update – Guide for VAT Refund for UAE nationals building New Residences (VATGRH1)

FTA has recently issued a revised guide for VAT Refund for UAE Nationals Building New Residences:

Please refer to key updates made in the guide:

1. Revised Section 2.2 to define ‘residence’: Any building (including villas and townhouses) used primarily as a natural person’s private home, including fixtures and fittings belonging to and enjoyed therewith, which include at least washroom and kitchen facilities in addition to sleeping quarters, is referred to as a “residence.”
2. Revised Section 3 on deadlines for application: The Refund Request must be sent to the Federal Tax Authority (FTA) within one-year i-e; 12 months from the date of completion of the newly built residence which is the earlier of the date:
   • The residence is occupied; or
   • when a competent body in the United Arab Emirates (UAE) certifies it as completed (on receipt of the Building Completion Certificate)
3. Revised Section 4.6 on documents required to be submitted to the verification body
   • Copies of the construction contract (including addendums);
   • Copies of the consultancy agreement (including addendums);
   • Copies of variation orders.
   • Copies of invoices which include returned items; and
   • Copies of credit notes.
   • Lump-sum tax invoices and proof of payments provided by the contractor and the consultant to the owner; and
   • Relevant tax invoices and proof of payments (eg; receipts).
4. Former section-5 which had details of “Processing of the Refund by the Federal Tax Authority” has been deleted and incorporated in Section-4.
5. Federal Tax Authority has updated the Appendices in the latest guide.
   

____________________________________________________________________

Dubai Customs

Notice No. (10/2021)

Dubai Customs has recently issued Notice No. 10/2021 on payment of definitive anti-dumping duties against GCC imports of ceramic flags and paving, hearth, wall, or floor tiles originating in or exported from India and China on 6^th July 2021.

This Notice will come into effect from 1^st July 2021 and mentions the procedures required to be carried out for payment of the duties.

Companies importing ceramic flags and paving, hearth, floor, or wall tiles originating in or exported from India and China must fill in the declaration and undertaking form issued by the customs department and submit this at the time of customs clearance. These duties will be paid through the customs systems.

The company has to specify the amount of the payable antidumping duties by the application of the dumping margins on companies. These duties will be calculated on CIF value percentage which ranges from 23.5% to 106%

Notice No. (12/2021)

Dubai Customs has recently issued Notice No. 12/2021 regarding the imposition of a definitive anti-dumping duty on the GCC imports of plates, sheets, and strips of aluminum alloys originating in or exported from China.

It will be imposed on sheets, plates, and strips of aluminum alloys of a thickness greater than 0.2mm but not exceeding 8mm, which fall under HS codes 76061200 and 76069200.  This excludes products of coated, polished, and heat treatable aluminum alloy along with those used for manufacturing beverage cans and their lids.

Anti-dumping duty will be charged as 33% of the CIF value of imports.

Please note that this article is for information purposes only and should not be taken as advice. It does not cover all aspects of the
topics with which it deals. You should not act upon the contents of this alert without receiving legal advice on your particular circumstances.

If you would like to discuss Tax & VAT services,  please drop us an email at info@inspiretaxconsultancy.com or call us at +(971) 504884714 or +(971) 543353947