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Financial Reporting Advisory Services
Grant Thornton’s Financial Reporting Advisory Services (FRAS) team supports organisations through a diverse range of accounting and reporting services including transaction accounting, analysis and adoption of new International Financial Reporting Standards, training on new and complex standards, and other related services that enable organizations to achieve greater transparency and navigate through the ever-changing regulatory landscape.
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CFO Advisory Services
Chief Financial Officers (CFOs) and finance teams periodically face difficulties in financial reporting and accounting. To address these issues and challenges GT’s team looks to reduce the periodic uncertainty faced by our clients around difficult reporting and accounting standards and can help overcome these difficulties with our CFO advisory services.
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International Financial Reporting Standards
Capability in International Financial Reporting Standards (IFRS) is one of our core skills. We have access to a full-time team responsible for high quality, consistent application of IFRS throughout the global organisation.
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International Public Sector Accounting Standards
We are equally experienced in the adoption and implementation of International Public Sector Accounting Standards (IPSAS).
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In-Country Value
Grant Thornton is honored to be one of the Certifying Bodies to implement the National In-Country Value (ICV) Program for the Ministry of Industry and Advanced Technology (MoIAT)
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Staff Secondment Services
Finding qualified, skilled professionals for a specific purpose and time period can be a significant challenge for many organisations. We alleviate that challenge with a talent pool of highly motivated and technically trained individuals who have excellent soft skills and the agility to adapt quickly to varied client environments.
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Transformation Advisory
We can help you identify, understand and manage potential risks to safeguard your business and comply with regulatory requirements.
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M&A and Transactions Advisory
We can support you throughout the transaction process – helping achieve the best possible outcome at the point of the transaction and in the longer term.
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Forensics
At Grant Thornton, we have a wealth of knowledge in forensic services and can support you with issues such as dispute resolution, fraud and insurance claims.
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Restructuring
We have an established standard of excellence for Restructuring within the United Arab Emirates with a focus on client success throughout a complex period of the business life cycle.
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Incorporation and Compliance
Grant Thornton assists businesses in setting up and complying with these regulations and acts as adviser for companies to ensure their activities, policies and procedures follow the guidelines specified by respective regulations.
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ICFR
Grant Thornton is a market leader in providing Internal Controls over Financial Reporting (ICFR) services to many well-known entities in UAE.
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Islamic Finance
Grant Thornton's Islamic Financial Services team comprises a global network of professionals with in-depth knowledge of Islamic finance and providing practical, value added assistance to their clients across a range of specialisms and issues.
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Regulatory Compliance
Grant Thornton holds a proven track-record in Regulatory Compliance advisory, our range of services will facilitate robust guidance to help you manage your regulatory risks and affairs, our teams of specialists assist our clients in the following areas:
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Corporate Tax
Our diversified team of corporate tax subject matter experts combines a perfect blend of international experience across several industry sectors, technical expertise, and commercial nuances with a commitment to deliver exceptional value to your business.
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VAT
The VAT team at Grant Thornton is well versed with the VAT Laws applicable across the region and holds valuable experience and professional accreditation in assisting clients across diverse industries to comply with the VAT obligations.
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Transfer Pricing
Grant Thornton UAE assists its clients in providing transfer pricing solutions that are implementable and operational, considering the facts and concerns of its clients.
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International Tax and Tax Due Diligence
Grant Thornton UAE supports multinational groups to optimise their tax structures. We can also assist businesses in analysing existing group transactions and inter-group supplies, as well as advising on potential implications of various taxes to facilitate an efficient Group tax structure.
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Economic Substance Requirements
Economic Substance rules were introduced in the UAE in 2019, requiring UAE businesses that undertake certain ‘Relevant Activities’ to maintain and demonstrate adequate substance.
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Customs and International Trade
The team at Grant Thornton is positioned centrally to assist the businesses with global cross-border tax structuring, planning and compliance needs.
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Excise Tax
We provide Excise Tax related advisory and compliance services to the producer, importer, and the storekeeper of excisable goods
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Business Process Outsourcing Services
Our team at Grant Thornton offers comprehensive and cost effective outsourced solutions, enabling stakeholders and business owners to focus on their core business goals.
Tax Alert - April 2020
12 May 2020Important Update on VAT in KSA
VAT rate to increase to 15% from 1st of July 2020
The Minister of Finance and Acting Minister of Economy and Planning has recently announced an increase in the VAT rate from 5% to 15% effective from 1st July 2020.
The government has also announced a halt on all social allowances beginning in June.
In addition to the above, the KSA government has also taken additional measures to reduce the expenditure by cancelling the Vision Realisation Programs and important projects for the year 2020.
The measures have been taken as a result of the economic shocks due to the pandemic that has led to an increase in unplanned expenses by increased provision for healthcare sector, precautionary measures undertaken to combat the virus and the unprecedented decline in oil demand.
The news can be accessed here
UAE Updates
Indirect Tax
VAT Updates
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VAT Return Filing Date Extended
In light of the COVID-19 pandemic, the Federal Tax Authority (‘FTA’) has issued a directive on an exceptional basis providing an alternative date i.e. 28 May 2020, for the deadline of submitting VAT returns and the payment of VAT due for the tax period ended 31 March 2020.
The deadline pertains only to monthly or quarterly VAT returns for the tax periods that end on 31 March 2020 and does not affect any other tax periods where the deadline for filing VAT returns and settling of payable VAT does not fall in April 2020.
Earlier last month the Dubai Government along with Dubai Customs announced certain measures to support the economy, details of which can be found here
- Public Clarification on Change in the Permitted Use of a Building
In a recent public clarification (‘VATP018’) released by the FTA on change in permitted use of a building wherein it has been clarified that the VAT treatment of a sale of a building (Standard-rated, Zero-rated or exempt) shall be determined independently on the date of supply and not impacted by the subsequent change in the permitted use of the building.
One of multiple examples given in the clarification is where a building was sold as a serviced/ hotel apartment and purchaser subsequently changed the permitted use of the building to residential purposes, the preceding sale of serviced apartment will remain subject to 5% VAT whereas the supply of residential building by the purchaser becomes an exempt supply.
The Clarification can be accessed here
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Real Estate Guide – Updated
The FTA has updated the real estate guide mainly adding details to the following topics:
- Supply of accommodation in labour camps
- Partially completed buildings
- Development of leased bare land
- VAT recovery of repair and maintenance costs
- Management entities
- New process for submission of new residence refund requests
The updated guide can be accessed here.
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Charities Guide – Updated
The FTA has updated the Charities guide mainly adding details to the following topics:
- Deemed supplies
- Designated charities to include criteria for applying to be recognized as Designated Charity.
- VAT recovery by charities which are not designated charities
- Cabinet Decisions relating to designated charities.
The updated guide can be accessed here.
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Press Release – FTA urges all registered businesses to use its official channels and not respond to electronic messages that could be fraudulent
The FTA has warned all registered businesses to not disclose any information to any third party in order to avoid exposure to financial fraud that has become a global phenomenon.
The Authority confirmed that all its communications with registrants in the tax system is made exclusively through its official channels, stressing that it follows the highest standards of security and confidentiality in dealing with registrants’ data. It reiterated that it does not send links to registrants in the tax system requesting data or financial information or accounting, as it has also highlighted in previous statements
The press release can be accessed here.
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FTA launches new service – Tax Clearance Certificate
The FTA has released a new service for obtaining a ‘Clearance Certificate’. The certificate can be requested to confirm the following reasons:
- Change Ownership
- Business Closing
- Below Voluntary Threshold
- Below Mandatory Threshold
The ‘Clearance Certificate' can be accessed on the taxable person’s e-services portal.
Excise Tax
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Excise Tax Return Filing Date Extended
The FTA has decided to extend the tax period for businesses registered for Excise Tax, which commenced on 1/3/2020 for one month on an exceptional basis, to end on 30/4/2020. The tax period shall now cover the months of March 2020 and April 2020, allowing registered businesses sufficient time to fulfil their tax obligations before the deadline.
Excise Tax Registrants must fulfil the following obligations:
- File two separate tax returns, one for March 2020 and one for April 2020, no later than Sunday, 17 May 2020.
- Ensure that the FTA has received the tax payable for the tax period as reported in the March 2020 and April 2020 tax returns no later than Sunday 17 May 2020.
The press release can be accessed here.
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Excise Tax Clearing Company User Guide
The FTA has released a user guide on registering a clearing company for Excise Tax.
Registered Clearing Companies who have a TINCO account may use the Excise Tax Clearing Company (‘TINCE’) registration form to apply for suspension of the Excise Tax due on the Excise Goods that they will import on behalf of the importers.
On successful registration, the Clearing Company will be allowed to suspend Excise Tax on the Excisable goods imported, up to the guarantee amount held by the FTA. The suspended Excise Tax amount will be released once the Excisable goods have been exported.
Other GCC Updates
Bahrain
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Simplified VAT Return Form
The NBR has released a guide on filing simplified VAT Return forms.
The NBR has announced that starting from 2020, VAT payers who have less than BHD 100,000 in total annual supplies and who are not part of a VAT group may request to use the simplified VAT return. The simplified VAT return can be used by monthly, quarterly, or annually filers granted the above two criteria are met.
The guide can be accessed here.
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Registration and Refund Manual for Eligible Persons
The NBR has released a guide to provide an overview of rules and procedures in Bahrain in relation to the Eligible Persons Refund process and guidance to navigate NBR’s online portal and forms for Eligible Persons registration application, filing and obtaining refunds. To determine if you are an Eligible Person, you must assess whether you meet the definition of “Eligible Persons” Eligible Persons are required to register and should submit their registration request to the Ministry of Foreign Affairs.
Every registered Eligible Persons in Bahrain can request refund paid for a given Refund period.
The guide can be accessed here.
KSA Updates
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Tax Amnesty
Due to the impact of COVID-19, many countries across the globe are implementing various reliefs for taxpayers in paying and reporting their taxes, including KSA.
In line with the Royal Order issued with respect to the establishment of incentives and initiatives aimed at mitigating the economic and development impacts of COVID-19 in KSA, the General Authority of Zakat and Tax (“GAZT”) has launched several measures to support the taxpayers, including a “voluntary disclosure initiative”.
The GAZT initiative which was announced on 2 April 2020 will exempt businesses from penalties on the late filing of corporate income tax, withholding tax, value added tax and excise returns that will be declared through voluntary disclosure during the initiative period i.e. from 18 March 2020 to 30 June 2020.
The imposition of penalties for the late payment of instalments and amendment of returns has been suspended until 30 June 2020.
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MLI entered into force in Saudi Arabia
On 1 May 2020, the Organisation for Economic Co-operation and Development (“OECD”) Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”) entered into force in the Kingdom of Saudi Arabia (“KSA”).
Following this effect, 14 KSA Double Tax Treaties (“DTAs”) will be modified as of 1 May 2020 in line with the provisions of the MLI, including Cyprus, France, India, Ireland, Japan, Luxembourg, Malta, Netherlands, Poland, Russia, Singapore, Sweden, Ukraine and the United Kingdom.
Background
On 18 September 2018, KSA signed the MLI underlining its strong commitment to prevent the abuse of tax treaties and Base Erosion and Profit Shifting (“BEPS”) by multinational enterprises.
The MLI allows jurisdictions to integrate results from the OECD/G20 BEPS Project into their existing DTA which addresses aggressive corporate planning strategies used by multinational enterprises to artificially shift profits to low or no tax environments. Measures included in the MLI address hybrid mismatch arrangements (Action 2), treaty abuse (Action 6), strategies to avoid the creation of a "permanent establishment" (Action 7), and dispute resolution (Action 14).
As an MLI signatory, KSA confirmed which of its existing DTAs (“covered DTAs”), it would like to modify and submitted its reservations and notifications in respect of the provisions of the MLI. The MLI will apply to the extent that the treaty partner has adopted the same MLI provision and has also included KSA on its list of covered DTAs.
On 23 January 2020, KSA deposited its instrument of ratification for MLI, including the final list of covered DTAs. Key MLI positions has adopted by KSA include the following:
- Including a new preamble to tax treaties regarding the objective of such treaties and should not be used to create opportunities for non-taxation or reduced taxation through tax evasion or avoidance (Article 6 of MLI)
- Prevention of treaty abuse by applying the “principal purpose test” (Article 7 of the MLI)
- Adopting measures for the mutual agreement procedure (MAP) (Article 16 of MLI)
Next steps
In line with this development, multinational enterprises in KSA should review their existing structures and assess the impact of the provisions of MLI to their business.
How GT can assist:
Connect with Steve Kitching, our Tax Advisory Partner, should you need any assistance with regards to the above changes in VAT and other tax areas.
