Welcome to this month's edition of Gulf Tax Insights, where we bring you the latest updates on tax matters from the Gulf region.
As we draw closer to 1 June 2023, the Ministry of Finance is releasing a flurry of Cabinet and Ministerial Decisions in preparation for the implementation of the new Corporate Income Tax Regime in the United Arab Emirates (UAE).
While we eagerly await a Cabinet Decision clarifying the meaning of "Qualifying Income", several important decisions have been published in recent weeks, shedding light on various topics such as Transfer Pricing Documentation, Applicable Accounting Standards and Methods, Taxation of Non-Residents, and Retaining/Ceasing of Exempt Status.
A Ministerial Decision was also released confirming which entities will be required to prepare and maintain audited financial statements (Ministerial Decision No. 82 of 2023). The decision states that the following businesses will need to comply with this requirement:
- Taxable persons with a revenue exceeding AED50 million; and
- Qualifying Free Zone Persons.
This is a significant development as many free zone companies were previously not required to prepare and maintain audited financial statements.
Furthermore, on 12 May 2023, the UAE Ministry of Finance published an Explanatory Guide providing valuable insights into the Corporate Income Tax law (CIT law). This guide offers an article-by-article commentary, offering timely clarifications on key concepts and definitions under the CIT law. To help you stay informed, we have summarized the most significant highlights of the document in our article on the Explanatory Guide.
In Saudi Arabia, the tax amnesty initiative, which was extended for an additional six-month period in November 2022, is set to expire on 31 May 2023. Taxpayers looking to benefit from a penalty waiver under the amnesty scheme must register, file any outstanding tax returns, and settle their taxes before the deadline. Additionally, the Saudi government recently announced the establishment of four new Special Economic Zones (SEZs) across various regions of the Kingdom. These SEZs will offer a range of tax and non-tax incentives to companies operating within their boundaries.
We hope you find this newsletter informative and insightful. Should you have any questions regarding these new tax developments in the region, please don't hesitate to reach out to us.
Happy reading!
