«Federal Taxes»: entered into force as of October 30

An “amendment” that spares imported goods in “specified regions” a double value-added tax

The Federal Tax Authority stressed the importance of Cabinet Resolution No. (88) of 2021 amending Article (51) of Cabinet Resolution No. (52) of 2017 regarding the executive regulations of Federal Decree-Law No. (8) of 2017 regarding Value Added Tax, which came into force. Implementation from October 30, 2021.

double tax

The authority added in a statement that this amendment avoids the subjection of imported goods in the specified areas to a double value-added tax, and it also provides facilities for non-residents of suppliers of goods in the specified areas, as these goods are treated in certain cases as outside the scope of the tax, and therefore no Leads to the supplier being required to register for tax.

In a general clarification issued by the Council of Ministers regarding the decision of the Council of Ministers to amend Article (51) - related to the specified areas, the authority indicated the tax treatment of goods that are supplied in the specified areas, and the shipping or delivery services associated with them, under the new amendment, within the framework of the “general clarifications” service that The Authority provides it through its website, with the aim of raising the level of tax awareness among business sectors, in order to reach the best rates of tax compliance.

selected areas

It is noteworthy that the designated areas are areas that have been identified by a decision of the Council of Ministers, that meet certain conditions, and a comprehensive list of them is available on the authority's website.

For the purposes of certain supplies and under specific controls, these specified areas are treated as outside the country for the purposes of VAT, and the number of designated areas is currently (27) specified areas.

According to the general clarification issued by the Authority, it is required to treat the supply of goods in the specified region as outside the scope of the value-added tax in the country, that the goods are not consumed in the country, or if they are consumed outside the specified region, it is required to obtain proof that the goods are It was delivered to a place outside the country, or the value added tax was paid when those goods were imported from the specified area into the country.

The service of shipping/delivery of these goods is also outside the scope of VAT in the country, if they are supplied by the supplier of the same goods, according to a number of conditions, including that the supplier is not resident and not registered for VAT in the country.

The general clarification included a detailed explanation and instructions on the implementation of the amendment of Article (51) of the Cabinet Resolution regarding the Executive Regulations of the Federal Decree-Law on Value Added Tax.

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