The Kingdom of Saudi Arabia (KSA) Zakat, Tax and Customs Authority (ZATCA) has published a detailed New National Rules of Origin guideline in Arabic.
The new set of National Rules of Origin entered into force on the 2nd of July, 2021 and is expected to be applicable until the entry into force of the GCC Unified Rules of Origin.
The guideline provides a detailed overview of the rules and the conditions that must be met in order for goods to qualify for GCC preferential treatment, including customs duty exemption.
The issuance of the National Rules of Origin by KSA represents a major development in the context of the functioning of the GCC Customs Union. It is critical for importers in KSA and manufacturers/exporters in the rest of the GCC countries to carefully assess their manufacturing activities and associated supply chains against the conditions established.
Conditions for verification of proof of origin
We expect that these assessments will lead to cases where the Rules of Origin may not be met, and consequently the goods shipped to KSA may be subject to customs duty (up to 25% for certain products). In view of this, businesses need to evaluate potential changes in their activities to accommodate the new rules and continue to access KSA on duty free basis.
ZATCA has published a Value Added Tax (VAT) guideline on electronic commerce (e-commerce). The guideline is currently available in Arabic.
The guideline is intended to provide clarity to businesses involved with e-commerce in KSA on the VAT rules applicable to their transactions. This includes determining the VAT treatment, place of supply, and responsibility to account for VAT on e-commerce sales made to customers in KSA.
Businesses involved with e-commerce in KSA should familiarize themselves with the guideline to determine if they are correctly accounting for VAT on their transactions.
ZATCA has published the English version of its Value Added Tax (VAT) guideline on Government Bodies. The guideline was previously published in Arabic.
The guideline is intended to provide Government Bodies with clarifications with respect to the interpretation of Economic Activity for VAT purposes, in addition to the VAT treatment of transactions between persons and such bodies.
In addition, the guideline provides information on the VAT treatment of activities undertaken by these bodies, especially those activities that are subject to VAT, and those that are outside the scope of VAT.
Dubai Customs launched a comprehensive guide for all the services and facilities it provides to enable traders and businesses, which selected Dubai as their preferred investment destination, increase their trade and boost their revenues. The guide will be introduced to the participants and exhibitors of EXPO2020 Dubai.
Dubai Customs has launched and developed an exclusive smart customs channel for EXPO 2020 to help clear shipments in record time, with the Dubai Customs teams working around the clock aided by advanced customs systems including the smart risk engine, pre-arrival online clearance of goods, the B2G channel, the Virtual corridor, AEO program, smart post-clearance audit, iDeclare, among other initiatives.
Dubai Customs released Customs Notice no. 13/2021 related to the import of goods between companies via e-commerce channels. This notice applies to commercial companies, including free zone companies and customs warehouses, and will enter into force on 14th November 2021.
Free zones and customs warehouses involved in e-commerce activities may take advantage of registering with the Dubai Customs customer registration system and avail the benefits stipulated in the aforementioned Customs Notice.
Specifics
The VAT landscape continues to evolve across the Gulf Cooperation Council (GCC). The Sultanate of Oman has recently introduced VAT which came into effect on 16 April 2021. Four out of the six GCC countries have implemented VAT within the first four years since the initial commitment was made between the Gulf Member States signing the GCC VAT Framework Agreement.
To address the growing GCC market need for guidance on Indirect Tax, Deloitte has launched an app entitled “GCC Indirect Tax”, a next generation version of the “VAT in the GCC guide” mobile app. In addition to the wealth of material in the current app, the new version provides the app user with a knowledge base of material, and constant updates of essential Indirect Tax information. It presents a wide range of topics including VAT, Customs and Global Trade, Excise Tax and Tax Technology.
“VAT implementation is only one aspect of the wider Indirect Tax environment in the GCC. Over the past 12 months we have seen the expansion of Excise Tax in the UAE and KSA on additional products, the introduction of a new Real Estate Transaction Tax (RETT) in KSA, the publication of the Excise Tax Executive Regulations in Oman, which was the forerunner to the current VAT implementation, as well as a significant increase in tax authority audit activity and publication of additional guidelines and other pieces of industry and issue-specific guidance” said Mark Junkin, Deloitte Middle East Indirect Tax Leader.
“These trends tell us that effective Indirect Tax management requires businesses to be proactive, rather than reactive to tax changes. There are several things that can be done to ensure that your organization is ready to adapt nimbly to a region where the broad framework of taxation is evolving at a rapid pace. One way to support you in that journey is to ensure you are armed with the latest updates from tax authorities across the region, and that you know who the experts are that can guide you in the next phase of your ta
journey in the GCC region,” concluded Junkin.
The “GCC Indirect Tax" mobile app is easily accessible anywhere using a mobile device where the user will receive instant and live push notifications of any Indirect Tax developments happening throughout the region. The app is available for download in both English and Arabic and will enable users to get in touch with Deloitte’s Indirect Tax experts and gain access to alerts and authorities updates, thought leaderships, events and webinars.
The app is available for download free of charge on the following links:
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.