With the aim to further mitigate the economic effects of the COVID-19 outbreak, the Zakat, Tax and Customs Authority (ZATCA) has announced the relaunch of the initiative to waive penalties on certain taxes, including Corporate Income Tax, Withholding Tax (WHT), Value Added Tax (VAT), Real Estate Transaction Tax (RETT), and any errors relating to e-invoicing. The period to apply for the relief started on 1 June 2022 and will end on 30 November 2022.
The penalty Amnesty provides an excellent opportunity for businesses to review their past returns on VAT and other taxes, as well as take corrective action where needed. To ensure compliance and minimize the risk of penalties being imposed by the ZATCA after 30 November 2022, we recommend that businesses start reviewing their VAT returns and other taxes as soon as possible.
We have designed an approach and methodology to support businesses in identifying and correcting errors and issues in their past VAT returns and other taxes. If you have not yet considered a review of these taxes, our advice is to carry out this exercise.
The reviews can be carried out individually or as part of a coordinated program across all taxes and some of the key focus areas can include:
This is an excellent opportunity to be able to deal with any past errors or difficulties in a practical and effective manner.
Deloitte recently held a webinar on the Tax Amnesty, in both English and Arabic, which can be accessed here.
The United Arab Emirates (UAE) Federal Tax Authority (FTA) announced that it has significantly increased the frequency of inspection visits to monitor non-compliance with the tax legislation.
In the first half of 2022, the FTA conducted 9,948 inspection visits across the UAE together with the Ministry of Economy, the Federal Authority for Identity, Citizenship, Customs, and Port Security, and various Economic Development departments across the UAE. The number of visits represents an increase of 104% over the same period in 2021.
The inspections resulted in the seizure and confiscation of approximately 5.5 million units of non-compliant tobacco products, and 1.07 million units of other non-compliant excise goods, with a total tax liability value of the seized goods of AED 130.4 million.
The increased frequency of inspections indicates that as the VAT and Excise Tax systems in the UAE mature, the FTA expects greater compliance from taxpayers and is increasing its focus on inspections and enforcement. As such, businesses should work to ensure that their operations and tax position are in compliance with the UAE tax legislation.
Deloitte can assist your business with preparing for an FTA inspection by conducting a mock audit to simulate the type of review the FTA may conduct.
The review would identify points of non-compliance and provide you with recommended actions to bring your business into compliance with the UAE tax legislation prior to an FTA inspection.
The Auditor Service Department of the Oman Tax Authority (OTA) has launched a “field awareness campaign” to highlight the “importance of correct tax compliance and to raise awareness of VAT requirements for taxpayers, including:
This initiative is part of a wider action plan of the OTA to ensure taxpayers are aware of VAT requirements, taking these requirements seriously and doing what is expected to be compliant.
Expect firmer action in future as this (and other) OTA campaign(s) roll out – in the second year of VAT expect more scrutiny, audits, assessments and penalties.
This digest is for information purposes only and should not be construed as advice. It does not necessarily cover every aspect of the topics with which it deals. You should not act upon the contents of this alert without receiving formal advice on your particular circumstances.