Add a bookmark to get started

As the UAE moves forward with the introduction of the new Corporate Income Tax (CIT) regime, the Federal Tax Authority (FTA) has issued a decision setting specific registration deadlines for businesses. Companies failing to register by these deadlines will face an AED 10,000 penalty.

Additionally, the FTA has provided a helpful clarification for financial institutions on using SWIFT messages for input tax deductions on interbank fees. Our article details the criteria for SWIFT messages to be accepted as valid documentation.

Whilst more decisions and guidance are coming out on the CIT regime in the UAE, there is no lack of tax developments in the other GCC countries, especially in the Kingdom of Saudi Arabia (KSA).

This month’s newsletter feature an article on KSA's approach to taxing outbound software payments. The taxation of outbound payments for the use intellectual property rights, software, and digital services to foreign entities has been a complex issue and an area of contention between taxpayers and the Saudi tax authorities. To address these complexities, the KSA tax authority (ZATCA) released a guideline in January 2024 focusing on the taxation of software payments.

In February 2024, ZATCA provided further guidance on tax incentives for Regional Headquarters (RHQ) under the RHQ Program. These guidelines detail the tax obligations for RHQs in the kingdom, including the requirement to comply with economic substance requirements and transfer pricing regulations. Our article on the RHQ Program explores the criteria for setting up an RHQ and the various tax and non-tax incentives granted to RHQs.

Finally, from an international tax perspective, the GCC member states continue to expand their Double Tax Treaty (DTT) networks with various other jurisdictions. Particularly noteworthy is the signing of two intra-GCC treaties by the UAE with Bahrain and Kuwait, whilst Kuwait and KSA have also expressed interest in signing a DTT. While businesses across the GCC welcome these international tax developments, they represent a natural progression in the ever-evolving GCC tax landscape.

We hope you enjoy this month’s newsletter, and as always, your comments and feedback are highly appreciated.