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Qatar, Bahrain, Oman, Saudi Arabia, Jordan, Egypt, Lebabon Middle East Tax laws and facts

Qatar, Bahrain, Oman, Saudi Arabia, Jordan, Egypt, Lebabon Middle East Tax laws and facts

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  • 3. 3 BAHRAIN TAX FACTS 2012BDO Public Accountants10th & 11th FloorsGBCORP TowerBahrain Financial HarbourPO Box. 787Manama, Kingdom of BahrainTel: +973 17 530 077Fax: +973 17 530 088Email:
  • 4. Bahrain Tax Facts 2012 4CONTENTS05 Corporate Income Tax06 Personal Income Tax07 Social Insurance08 Withholding Tax09 Other Duties and Fees10 Bi-lateral Tax Treaties
  • 5. Bahrain Tax Facts 2012 5 Corporate Income TaxCORPORATE TAXThere is no corporate taxation system in Bahrain with the exception of profits arisingfrom the extraction of petrochemical products.Corporate income tax on the profits of companies engaged in the exploration,production or refining of oil and gas in Bahrain is levied at a rate of 46%. Taxableincome for oil and gas companies is on net profits, which consist of business income lessbusiness expenses.FILING REQUIREMENTSOil and gas companies are required to file an estimated tax declaration on or before the15th day of the third month of the tax year. Tax must be paid in 12 monthlyinstallments.CARRY FORWARD LOSSESTaxable losses of oil and gas companies may be carried forward indefinitely. Carry backis not permitted.
  • 6. Bahrain Tax Facts 2012 6 Personal Income TaxThere is no personal taxation system for income, capital gains, gifts or inheritances inBahrain and, furthermore, no requirements to file any form of tax return.
  • 7. Bahrain Tax Facts 2012 7 Social Insurance and Other Contributions SOCIAL INSURANCE Social insurance contributions are payable for Bahrainis at a rate of 18% of basic wages of which 12% is the employers contribution and 6% is the employee contribution. Unemployment insurance at a rate of 1% is also payable by both Bahrainis and expatriate employees. The base for the calculation of social insurance contributions cannot exceed BD 4,000 per month. In case the salary exceeds BD 4,000 per month, the amount of contribution will be calculated only on BD 4,000. EXPATRIATE EMPLOYEE MONTHLY FEE Each entity that is registered with the Labour Market Regulatory Authority (LMRA) is required to pay 10 Bahraini Dinars for every expatriate employee employed in Bahrain. Due to the current unrest in Bahrain, this fee has been waived by the LMRA until further notice. TRAINING LEVY Organizations with 50 or more employees are liable to pay the training levy at a rate of 4%. The base for the calculation of the training levy is the gross salary of expatriate employees as registered with Social Insurance Organization, but limited to BD 4,000 per month per employee. Training levy applies only on salaries paid to expatriates. END OF SERVICE BENEFIT Expatriate employees at the completion of their employment contract are entitled to an end of service benefit which is calculated on the following basis:  Fifteen days salary for every year of service for the first three years of continuous service;  One months salary for every year of service thereafter. If an employee leaves the services of the employer within 3 years then no end of service benefit is payable to the employee. However if an employee leaves the services after 3 years but less than 5 years, then the number of days entitlement is one-third of the total days calculated based on the above. However if the employer terminates the services of an employee, then full end of service benefit is paid to him, irrespective of the number of years of employment with the employer.-
  • 8. Bahrain Tax Facts 2012 8 Withholding TaxThere is no withholding of taxes on the repatriation of profits or dividends, royalties,license fees or group charges. However, if the investor operates in other countries inthe region, the withholding tax rules in those countries will need to be taken intoaccount in the regional business structure.
  • 9. Bahrain Tax Facts 2012 9 Other Duties and FeesTOURISM LEVYPersons using hotel facilities are normally charged a government levy of 5% and a 15%service charge is generally added to the total bill amount.VALUE ADDED TAXBahrain has no value added tax.MUNICIPAL TAXMunicipal tax is payable by individuals or companies renting property in Bahrain. Therate of the tax varies according to the nature of the property, namely; unfurnished/furnished residential or commercial property. However this is generally 10% of themonthly rental.CUSTOM DUTYThere are no customs duties on trade in locally manufactured goods between GulfCooperation Council (GCC) countries (Bahrain, Kuwait, Qatar, Saudi Arabia, Oman andthe United Arab Emirates) where the local shareholding is at least 51% and value addedin goods produced exceeds 40%. On all other imports, custom duties are levied at a rateof 5%, with the exception of tobacco products (100%), liquor (125%) and duty free ofimports of vegetables, fruits, fresh and frozen fish, meat, books, magazine andcatalogues.LAND REGISTRATION TAXThere is a land registration fee payable to the government on the transfer of real estateproperty. The fee for Registration of Sales Agreement of property is as follows:  From BD1 to BD70,000 - 1.5%, with Discount 1.25%*  From BD70,000 to BD120,000 - 2%, with Discount 1.8%*  From BD120,000 and above - 3%, with Discount 2.7%** Survey and Land Registration Bureau of the Kingdom of Bahrain offers a 10% discountcalculated on the total registration fees, if the registration process begins within twomonth from the execution of the Registration and Sales Agreement.
  • 10. Bahrain Tax Facts 2012 10 Bi-lateral Tax TreatiesBahrain has signed treaties for the avoidance of double taxation with the followingcountries:Algeria, Austria, Belarus, Belgium, Brunei, Bulgaria, China, Egypt, France, Iran, Ireland,Jordan, Lebanon, Luxembourg, Malaysia, Morocco, Netherlands, Pakistan, Philippines,Singapore, Sudan, Syria, Thailand, Turkey, Uzbekistan, United Kingdom and Yemen.Note : Some of the above treaties are not yet in force.Bahrain has an inheritance tax treaty with France.In addition, a US-Bahrain Free Trade Agreement (FTA) has been entered into betweenthe two countries. This agreement gives customs duty exemption to all US industrialand agricultural products. Particulars of the Tariff Elimination as explained in the FTAare as follows:The Agreement provides for the elimination of all customs duties on originating goodsno later than 10 years following the entry of the FTA into force. The Agreement iscomprehensive and covers all tariff lines. When the FTA became effective, 96% ofBahrain industrial and agricultural products gained duty-free access to the United Statesmarkets. Tariffs on the remaining products, which are not currently produced inBahrain, have been phased-out according to the following staging categories:Category A: Immediate duty-free access (96% of industrial and agricultural products).Category B: Duties will be eliminated in 10 equal annual stages (1% of industrial and agricultural products).Category C: Goods that are already duty free and will continue to receive duty-free treatment.Category D: Duties will be eliminated in 5 equal annual stages (3% of industrial and agricultural products).Bahrain is to provide immediate duty-free access on all US industrial and agriculturalproducts, except 80 products on which the duties will be phased-out over 10 years.
  • 11. 11 EGYPT TAX FACTS 2012BDO Egypt Consulting Ltd.1, Wadi El Nile St.,Mohandessin, GizaCairo. EgyptP.O.Box.: 110/12655Tel: +202 3303 0701Fax: +202 3303
  • 12. Egypt Tax Facts 2012 12CONTENTS13 Corporate Income Tax15 Salary Tax17 Social Insurance18 Sales Tax19 Stamp Tax20 Withholding Tax
  • 13. Egypt Tax Facts 2012 13 Corporate Income TaxRATES OF CORPORATE TAXIn general, the standard rate of corporate tax is 20% applied to the company’s taxable profits.Starting the fiscal year 2011, an additional tax rate had been imposed, being 25% on taxableprofits in excess of EGP 10 million.THE CORPORATE TAX YEARThe rate of corporate tax is fixed in respect of the corporate tax year or the financial year.The company has the right to choose the date of year-end to issue its annual financialstatements, regardless of the calendar year. Each year has to be accounted for separately. Thefirst year is to start from the date of incorporation to the end of the following financial year(long period).DEDUCTIBLE EXPENSESThe general rule is that only expenses that are wholly and exclusively incurred in earning theincome of the business are deductible. The cost and expenses have to be supported by properdocuments.ACCOUNTING METHODS AND BUSINESS PROFITSA company’s taxable income is based on its accounting profits, computed according to theEgyptian Accounting Standards, which is, to a great extent, compliant with the InternationalFinancial Reporting Standards (IFRS).FILING REQUIREMENTSThe corporate tax return must be filed along with all supporting documents (e.g. Auditedfinancial statements), within four months from the accounting year end, e.g. 30 April, for 31December year end.CARRY FORWARD LOSSESLosses (on a year by year basis) are carried forward for deduction from subsequent profits forup to five years.
  • 14. Egypt Tax Facts 2012 14 Corporate Income Tax – ContinuedDIVIDENDSThere is no withholding tax on the payment of dividends, whether the recipient is resident ornon-resident.PAYMENT TO NON-RESIDENTSThe amounts paid to foreign entities against services rendered, are subject to withholding taxat a rate of 20%, even if it is paid to an entity that is resident of a country that has a doubletax treaty with Egypt. It is the overseas recipients responsibility to apply to the Egyptian TaxAuthority for refunding the balance between the 20% withheld taxes and the rates on royaltiesand interest, as per the treaty, should that exist.
  • 15. Egypt Tax Facts 2012 15 Salary TaxBASIS OF TAXATIONThe salary tax is the liability of the employee not the employer. However, the employer isresponsible to withhold and remit the salary tax on behalf of the employee on a monthly basis.Salary tax is applicable to the following:  All earnings due to the employee resulting from his/her work with third parties with or without a contract, periodically or non-periodically, whatever the names, forms or reasons of those earnings, and whether they are for works performed in Egypt or abroad and paid by a source in Egypt, including wages, remunerations, incentives, commissions, grants, overtimes, allowances, shares and portions in profits, as well as the monetary privileges and allowance in kind of all types.  Earnings due to the employee from a foreign source for works performed in Egypt.  Salaries and remunerations of chairman, members and directors of the boards of directors in the associations of capital in return for their administrative work.RATES OF SALARY TAXThe Taxable employee’s income is subject to progressive rates as follows: First L.E. 5,000 0% Between L.E. 5,000 and L.E. 20,000 10% Between L.E. 20,000 and L.E. 40,000 15% Between L.E. 40,000 and L.E. 10,000,000 20% More than L.E. 10,000,000 25%TAX ON PAYMENT TO NON-RESIDENTAmounts paid to non-residents (staying in Egypt less than 183 days in any 12 months) from anysource, are subject to 10% taxes, without any deductions.
  • 16. Egypt Tax Facts 2012 16 Salary Tax - ContinuedFILING REQUIREMENTS  Employers are required to submit a quarter salary tax return to the Tax Authority within one month from the end of each calendar quarter.  Taxes are to be withheld monthly and paid to the Tax Authority during the first 15 days of the following month.BENEFITS-IN-KINDBenefits in kind that are given to the employees shall be determined on basis of the marketvalue. However, the value of the following benefits in kind shall be estimated as follows: Benefits Tax Treatment The cars expenses (used by 20% of the total car expenses is subject to salary the employee) tax. 20% of the total mobile invoices is subject to the mobile expenses salary tax. The difference between the interest rate 7% and The employees loans with the employees’ loan interest (if it’s less than 7%) interest rate less than 7% is subject to salary tax. The value of the benefit shall be determined on The companys stocks granted the basis of the difference between the market at a value less than the value of the stock on the date it is obtained and market value of the stock. the value reckoned for the workers. Life insurance premium paid The benefit shall be determined at the premiums by the company paid by company.TAX EXEMPTION  Personal allowance of L.E. 4,000 pa (over and above the zero-rated L.E. 5,000 of the annual salary).  Social insurance subscriptions and Private insurance funds.  Life insurance installments and Medical insurance.  The following fringe benefits: employees meals, medical care, employees group transportation, employees uniform, housing allowed by the employer to the employees related to performing their work.  Employees share in profit distribution.
  • 17. Egypt Tax Facts 2012 17 Social InsuranceSocial insurance applies to Egyptian nationals in full – time employment, unless a social securitytotalization agreement provides otherwise. Employees pay a portion of their wages throughemployer withholding, in addition to another portion borne by the employer.SOCIAL INSURANCE RATEThe rate of Social Insurance is as follows, showing the employer and employees’ portions: Employer Employee Amount % % Basic salary up to L.E. 875/month 26 14 Monthly amounts in excess of L.E. 875 for other payments such as overtime 24 11 or representation allowances, up to L.E. 1050FILING REQUIREMENTS  The company has to pay social insurance (employee portion & employer portion) to the Social Insurance Authority within 15 days of the following month.  Semi-annual social insurance form 2 has to be submitted in January and July of each year.
  • 18. Egypt Tax Facts 2012 18 Sales TaxThe General Sales Tax (GST) in Egypt is to a great extent similar to VAT system in the EECcountries. GST is imposed on:  Goods; where the general tax rate is 10% on each invoice.  Services; which are subject to sales tax at various rates. There are some services which are not subject to tax such as the training services, professional services, and consultancy services.TAXES ON INPUTFor goods, in most cases, the company can deduct the sales tax paid on inputs from the sales taxon output, and pay the balance monthly, together with a monthly tax return.For services, it is not allowable to deduct the sales tax paid on inputs from the sales tax on outputin relation to services.INVOICES DETAILSThe following are the details that must be included on customer invoices:  Invoice number starting from one.  The company address in Egypt  Sales tax registration number.  Commercial registration number.  Corporate tax number.  Customer name.EXPORTED GOODS AND SERVICESBoth exported goods and services are subject to sales tax at a rate of zero%.BASIS OF TAXATIONThe earlier of the following shall be considered as the tax point, and the company has to settlethe sales tax accordingly:  The date of issuing the invoices.  The date of delivery of commodity or rendering the services.  The date of payment of the commodity value or the return of services, whether being wholly or partially, or an amount paid on account or settlement of account, or on credit, or any other means of payment.
  • 19. Egypt Tax Facts 2012 19 Stamp TaxStamp tax is generally imposed on the following:  Documents: a wide range of documents including certificates and declarations, judicial documents,  Advertisements, licenses, utility bills.  Contracts: all types of contracts  Transactions: wide range of transactions such as banking transaction (i.e. loans, deposits, accounts and documents), insurance premiums, transportation  Services, lotteries, company registrations, etc.There are two types of stamp duty rates. The first is a fixed amount that is imposed ondocuments, contracts, etc. The amount of fixed stamp duty is specified in the legislation andvaries according to the document in question. The second is a proportionate rate and this,generally, applies to transactions. The proportionate rate is calculated as a percentage.There are many percentages and amounts paid according to the Stamp Tax Law. However,below are the important items: Amount L.E Contract 1.00 per page Certificate 1.00 per page Amount L.E Loan 0.2% Advertising in news papers & TV. 15%FILING REQUIREMENTSThere are various date of filing such as:  Stamp tax return for advertising has to be submitted during 2 months from the date of publishing of advertisement.  The stamp tax on loan has to be settled on quarterly basis
  • 20. Egypt Tax Facts 2012 20    Withholding Tax on Local        Transactions   BASIS OF TAXATION All entities including projects established as free zone companies are obliged to withhold a tax percentage from every amount paid exceeding L.E. 300 on the account of the corporate tax of the vendor. RATES OF WITHHOLDING TAX Transaction Rate Services 2% Construction 0.5% Supplies 0.5% Individual professional fees 5% FILING REQUIREMENTS Entities are obliged to settle the withholding tax due before end of April, July, October, and January of every year.
  • 21. 21- KUWAIT TAX FACTS 2012 BDO Al Nisf & Partners Al Johara Tower, 6th Floor Khaled Ben Al Waleed Street, Sharq P.O. Box 25578, Safat 13116, Kuwait Email: Tel: +965 2242 6999 Fax: +965 224o 1666
  • 22. Kuwait Tax Facts 2012 22CONTENTS23 Corporate Income Tax29 Other Taxes
  • 23. Kuwait Tax Facts 2012 23Corporate Income TaxRATES OF CORPORATE TAXTax is levied at a flat rate of 15%.INCOME SUBJECT TO TAXAny income earned from carrying out business or activities in the State of Kuwait, either directly or throughan agent, is taxable. An agent is a person or entity authorized by a principal to carry out business or activityon behalf of and for the account of the principal under a binding agreement.Income earned by any entity from the following is deemed to be earned from the State of Kuwait andtherefore taxable in Kuwait.i) Income earned from any activities or businesses wholly or partially executed in the State of Kuwait, including income earned from the supply and sale of goods or provision of services whether the contract has been concluded inside Kuwait or abroad.ii) Royalty, franchise, license and similar fees earned from Kuwait.iii) Commissions or fees earned in cash or in kind from representation or brokerage agreements relating to Kuwait.iv) Profit from any industrial or commercial activity in the State of Kuwait.v) Profit from sale or transfer of assets including sale of shares in a company whose assets are principally formed of immovables in the State of Kuwait (profits from sale of shares listed on the Kuwait Stock Exchange are however not taxable).vi) Income earned from lending of funds in the State of Kuwait.vii) Profit from purchase and sale of goods or property in the State of Kuwait including rights associated with tangible or intangible assets.viii) Income earned from having a permanent office in Kuwait where sale and purchase contracts are concluded including place of work from where activity is carried out or contracts concluded (irrespective of whether such place of work is owned, leased or belongs to a third party).ix) Profit from leasing of any movable or immovable property for use in the State of Kuwait.x) Profit from rendering of services in Kuwait including fees from administrative, technical or consulting services (irrespective of whether the contract is wholly or partially performed in the State of Kuwait or signed inside Kuwait or abroad).
  • 24. Kuwait Tax Facts 2012 24 Corporate Income Tax - ContinuedCapital gains from trading in securities on the Kuwait Stock Exchange is exempted from tax.Any income earned by individuals (natural persons) is not taxable in Kuwait.Entities which are fully owned by Kuwaitis are not taxed. Also, entities which are registered in the GulfCooperation Council (GCC) countries (comprising of Kuwait, Saudi Arabia, Bahrain, UAE, Oman and Qatar)and fully owned by Kuwaiti / GCC citizens or any corporations which are in turn fully owned by Kuwaiti /GCC citizens are not taxed in practice.A foreign entity with a shareholding in a local Kuwaiti company is required to calculate and pay tax basedon its share of profit in the local entity.THE CORPORATE TAX YEARThe taxable period is a year and normally has to be the calendar year. A body corporate may,within three months from the date of signing the contract or the date of commencing thebusiness activity in Kuwait, apply to the Director of the Income Tax Department for permissionto submit its first tax return for a period of less than one year (but not less than 7 months) or foran extended period of up to 18 months. It is at the discretion of the Tax Department to grantapproval for a tax period which is less than or more than a year.DEDUCTIBLE EXPENSESAll expenses directly incurred in carrying out trade or business in Kuwait, subject to the limits specified inthe tax law and regulations, are allowed as a deduction in computing taxable profit, provided that theexpense claimed as a deduction is:a) necessary for earning the revenue;b) real and supported by proper documents; andc) related to the taxable period.ACCOUNTING METHODS AND BUSINESS PROFITSA company’s taxable income is based on its net profit, computed according to the Kuwait Income TaxDecree of 1955 and related regulations which, inter alia, specify limits on deduction of certain expenses.
  • 25. Kuwait Tax Facts 2012 25 Corporate Income Tax - ContinuedFILING REQUIREMENTSThe tax declaration of each taxable period is required to be submitted within 3½ months ofthe end of the taxable period. It is possible to seek extension up to 60 days in filing of thetax declaration. Application for extension of time for filing tax declaration should besubmitted on or before the 15th day of the second month following the end of the taxableperiod. It is at the discretion of the Director of Income Tax to grant an extension. If the TaxDepartment does not respond to the request for extension in filing tax declaration within 30days of the application date, it should be assumed that the application is rejected.Taxes have to be paid in four instalments on the 15th day of the 4th, 6th, 9th and 12thmonth following the end of the tax year. In case extension is granted, tax has to paid fully atthe time of filing the tax declaration.Delays in the submission of the tax declaration is subject to tax penalties at the rate of 1% ofthe tax payable for each 30 days delay or part thereof. Additionally, penalty is charged forany delay in payment of tax, at the rate of 1% of the tax due for each 30 days delay or partthereof.The tax declaration has to be filed together with the following:a) Report from an auditor registered with the Ministry of Commerce & Industry and approved by the Ministry of Financeb) Financial statementsc) Trial balanced) Statement of fixed assetse) Statement of subcontractors showing name, address, value of work performed during the taxable period, retention held and copy of last payment certificatef) Inventory statement showing stock quantity and amountg) Details of contracts in progress showing the income and expenses relating to each contracth) Copy of last payment certificate issued by project owneri) For insurance companies, statement showing details of reinsured policies and their termsTAX INSPECTION AND ASSESSMENTFollowing the filing of the tax declaration, it is a normal practice for the Income TaxDepartment to carry out an inspection of body corporate’s books and records to verify theincome and expenses reported in the tax declaration to the supporting documents.
  • 26. Kuwait Tax Facts 2012 26 Corporate Income Tax - ContinuedBased on the findings from the tax inspection, adjustments are normally made to the taxableprofit e.g. if expenses are not supported, they are disallowed at the time of the taxinspection. Following the tax inspection, an assessment letter is issued.If additional taxes are assessed, the body corporate has the option of paying the additionaltaxes (within 30 days of the assessment letter, otherwise a penalty of 1% is levied for every 30days delay or part thereof in paying the additional tax) or raising an objection within 60 daysfrom the date of the tax assessment letter.If an objection is not raised within 60 days, tax as per the assessment letter becomes finaland payable. If an objection is raised but is not satisfactorily resolved within 90 days from thedate of the objection letter, the body corporate has the right to have its case heard by anAppeals Committee.Tax appeal has to be filed within 30 days from the date of issue of the Tax Department’sletter in response to the tax objection or, in case of no response from the Tax Department,tax appeal has to be filed within 30 days after the end of the 90 days period from the date theobjection letter was filed.If the appeal is not filed within the 30 day period, the assessment by the Tax Departmentbecomes final and payable. If the body corporate is not satisfied with the outcome of theAppeals Committee decision, it has the option to refer the case to the concerned courtswithin 60 days from the date of the tax appeal committee’s resolution.Otherwise the decision by the tax appeal committee becomes final and any additional taxassessed has to be settled.CARRY FORWARD LOSSESThe losses arising in any tax period can be carried forward to be offset against future taxableprofits, for a maximum period of three years.Unutilized tax losses cannot be carried forward if a body corporate ceases activities in Kuwaitor does not generate any revenue from trade or business in Kuwait or enters liquidation orchanges its legal status or merges with another entity.Tax losses cannot be carried back.
  • 27. Kuwait Tax Facts 2012 27 Corporate Income Tax - ContinuedDIVIDENDSThere is no withholding tax on the payment of dividends, except for dividends paid by companies listedon the Kuwait Stock Exchange which is subject to a 15% withholding tax.TAX RETENTIONGovernment authorities, ministries, public and private companies, societies, natural persons,contractors and all other bodies/institutions in Kuwait (including foreign entities carrying outtrade or business in Kuwait) are required to retain 5% of the total contract value or 5% fromeach payment made to the contracting party. This retention can be released only on receivinga tax retention release letter from the Tax Department confirming that the retention can bereleased. Entities that fail to comply with the above or to notify the Tax Department aboutthe subcontractors will not be allowed to claim deduction for the subcontract cost.Additionally, such entities will be liable for paying the tax due of the body corporate that hasfailed to settle its taxes.A tax retention release letter (tax clearance letter) is issued by the Tax Department in thefollowing cases: a) if an entity is not subject to tax or is exempted from tax or has incurred a loss; b) if an entity has settled all due taxes; and c) if an entity has submitted an approved bank guarantee or any other guarantee acceptable to the Tax Department that guarantees settlement of tax.DOUBLE TAX TREATIESKuwait has signed and ratified double taxation treaties with a number of countries. Pleasecontact BDO Kuwait for latest update on countries with whom Kuwait has signed and ratifieddouble tax treaties.TAX HOLIDAYUnder the Foreign Direct Investment Law No. 8 of 2001, as amended, a tax holiday up to 10years may be granted to an entity that is involved in carrying out one or more of the followingeconomic activities and projects: a) Industries except the projects related to discovering and producing oil and gas. b) Establishing, operating and managing infrastructure projects such as water, electricity, sewage or communications. c) Banks, investment companies and exchange companies that the Central Bank of Kuwait has approved to be established.
  • 28. Kuwait Tax Facts 2012 28Corporate Income Tax- Continuedd) Insurance companies that the Ministry of Commerce and Industry agrees to establish.e) Information technology and software development.f) Hospitals and medicines.g) Road, sea and air transport.h) Tourism, hotels and entertainment.i) Culture, mass media and marketing except publishing newspapers, magazines and publishing establishments.j) Housing projects and areas development except real estate speculation.k) Real estate investments through the foreign investor’s sharing in the Kuwaiti public companies as per the provisions of Law no. 20 for 2000.
  • 29. Kuwait Tax Facts 2012 29 Other TaxesCUSTOMS DUTIESThe six Gulf Co-operation Council (GCC) states comprising Saudi Arabia, Kuwait,Bahrain, Qatar, Oman and UAE announced the formation of the Customs Union witheffect from 1 January 2003 eliminating customs duties for trade within GCC states aswell as removing regulations and procedures which restrict trade within GCC. TheCustoms Union results in unified customs duties.The GCC states have approved a unified customs tariff of 5% on CIF invoice pricesubject to certain exceptions. Collection of customs duty takes place at the first pointof entry in the GCC. Subsequent movement of goods within the GCC states does notattract duties. A higher tariff is imposed on imports of tobacco and its derivatives.Each GCC member state can continue to impose protective customs duty as per thelist approved for each GCC country. If the goods covered by protection are importedfirst through another GCC state in which protective duty does not apply, then thatcountry will levy only the normal duty of 5% and the final destination country wherethe protection duty applies, will recover the balance of the duty.A unified list of goods comprising of over 400 items such as basic foodstuffs, personaleffects and used household items has been approved by the GCC states to be exemptfrom customs duties.CONTRIBUTION TO KUWAIT FOUNDATION FOR THE ADVANCEMENT OF SCIENCESKuwaiti Shareholding Companies (public and closed) are required to pay 1% of theirprofits after transfer to the statutory reserve and the offset of losses brought forward,to KFAS which supports scientific progress.NATIONAL MANPOWER SUPOORT TAXUnder Law No. 19 of 2000 relating to supporting National Manpower andencouragement of National Manpower to work in Non-Government agencies, allshareholding companies listed on the Kuwait Stock Exchange are required to pay a2.5% annual tax on the net profits.
  • 30. Kuwait Tax Facts 2012 30 Other Taxes - ContinuedZAKATKuwaiti shareholding companies (public and closed) are required to pay 1% of netprofit as Zakat.PERSONAL TAXATIONThere is currently no tax on personal income of individuals including salary income ofemployees.PROPERTY TAXThere is no property tax in Kuwait.VAT / SALES TAXThere is no VAT or sales tax in Kuwait.
  • 31. 31LEBANONTAX FACTS 2012
  • 32. Lebanon Tax Facts 2012 32CONTENTS
  • 33. Lebanon Tax Facts 2012 33Due to the fact that Lebanon ischanging its tax regulations, thissection will be completed in duecourse.
  • 34. 34 OMAN TAX FACTS 2012BDO AuditSuites 601 & 602Penthouse, Beach One Bldg.Way No. 2601, Shatti Al QurumPO Box. 1176, Postal Code 112,Sultanate of OmanTel: +968 24649020Fax: +968 24649030
  • 35. Oman Tax Facts 2012 35CONTENTS36 Corporate Income Tax40 Withholding Tax41 Personal Income Tax42 Social Insurance & Other Contributions43 Other Duties and fees44 Bi-lateral Tax Treaties
  • 36. Oman Tax Facts 2012 36 Corporate Income TaxIncome tax in the Sultanate of Oman has been in force since 1971 and is governed bythe Law of Income Tax on Companies of 1981. In June, 2009, a new tax law waspromulgated by Royal Decree 28/2009 which is effective from 1 January, 2010. Thenew tax law provided clarity on several provisions included in old tax law andeliminated disparity on the tax rates charged to local and non-GCC foreigncompanies.TAXABLE ENTITIESTaxable entities that are subjected to corporate tax are; Omani proprietorships,Omani companies and permanent establishments (pe). The term pe refers to foreignentities (including persons) carrying out activities in Oman, either directly or througha dependant agent. The new tax law has introduced a 90 days threshold limit of stayin Oman applicable to a period of twelve months for creation of pe for foreignpersons engaged in activities of services. Under the new dependant agent pe concept,the activities of a dependant agent could create a pe for the foreign principal incertain cases.TAX RATE AND PAYMENTAll taxable entities are subject to tax at rate of 12% on net taxable income over RO30,000. Oil exploration and production companies are taxed under special rulescovered by concessional agreements. Foreign taxes paid abroad can be set off againsttaxes due on the same income taxable in Oman. There are no advance paymentprocedures, and tax due should be paid with the provisional return on estimatedtaxable income and balance with final return.The liability of the payment of tax falls on the owner of the Omani proprietorship orthe owner of the pe or an Omani company. Partners of joint ventures shall be jointlyliable for the payment due. Any tax due and not paid by the due date shall attractadditional amount of 1% per month.
  • 37. Oman Tax Facts 2012 37 Corporate Income Tax – ContinuedTAX RETURNSIt is mandatorily required for all tax payers to register with the tax departmentwithin three months from the date of incorporation or assuming pe status. The taxyear is the calendar year. Taxable entities are permitted to have a different taxaccounting year than the calendar year. Provisional tax returns must be filed withinthree months from the end of the tax accounting year and final returns within sixmonths. In respect of a foreign person who carries on business in Oman throughmultiple permanent establishments, a consolidated tax return should be submitted tothe tax department. The accounts are required to be prepared in accordance withInternational Accounting Standards.TAX EXEMPTIONS  Companies and establishments established with the fundamental purpose of industry, mining, agriculture, fishing, farming, agriculture, higher education institutions, schools and colleges and hospitals are exempt from income tax for a period of five years from the date of commencing production. The period of exemption may be extended provided that such extension does not exceed a further five years.  Shipping companies registered in Oman are exempt from tax and foreign shipping companies carrying on business in Oman through authorized agent are tax exempted from the date of commencement of business on condition that reciprocal treatment is granted.  Income realized by foreign airlines companies carrying out their activities in Oman through a established firm is exempt from tax. Dividends received against investment in equity, shares, portions or stocks in the capital of any other company established in the Sultanate of Oman.  Profit made on sale of securities listed on Muscat Stock Exchange is fully exempt from tax. Income earned by joint investment accounts/mutual funds registered in Oman under the Capital Market Laws, or established overseas for dealing in shares and securities listed on Muscat Securities Market is exempt from tax.
  • 38. Oman Tax Facts 2012 38Corporate Income Tax –ContinuedDEDUCTIBLE EXPENSESExpenses are deductible if they are incurred wholly and exclusively for the purposeof generation of gross income. Any expenses if determined by the tax department asexcessive to the related income will be disallowed to the extent of amount deemedto be excessive.Special rules apply to allowances, such as depreciation, bad debts, donations,shareholders’/proprietors/director’s remuneration, rent, interest, head-officeoverhead allocated to branches and agent’s/sponsorship fees.Provisions of any nature, whether specific or general, are not allowed as deductionsfor tax purposes. The tax department takes the view that a deduction will only beallowed when the expense is actually incurred.It is the normal practice that transactions entered directly or indirectly with relatedparties are closely scrutinized by the Secretariat General and adjustments are madein the computation of taxable income.ASSESSMENTAll the tax returns submitted are subject to assessment within 5 years from the endof the tax year during which the final return is submitted. The Secretariat Generalcan issue an assessment in the name of tax payer responsible for deduction andremittance in the event withholding tax which is due has not been paid within thedue date.OBJECTION AND APPEALSThe tax payer can make an objection against an assessment to the Secretary Generalof Taxation, within 45 days from the date of serving the assessment order.The assesses can also make an appeal to the Tax Committee against the decision ofthe Secretary General of Taxation Affairs within 45 days of notification of thedecision issued by the Secretary General of Taxation.The assesses may also file a tax case before any court concerned to appeal againstthe decision issued by the Tax Committee.
  • 39. Oman Tax Facts 2012 39Corporate Income Tax –ContinuedCARRY FORWARD AND SET OFF OF LOSSESThe new tax law requires that when a foreign entity carries on businesses throughmore than one pe, the loss of any of those pe for any tax year is allowed to carryforward only after being reduced by the taxable income for that tax year of other peowned by that foreign entity. Losses are allowed to be carry forward for a maximumperiod of five years and are offset against future profits, except the losses relatingto the first 5 years of exemption period are allowed to carry forward indefinitelyuntil fully utilized.
  • 40. Oman Tax Facts 2012 40 Withholding TaxWithholding tax is a tax charged on certain specified payments accruing or arising inOman to foreign companies which do not have a pe or such income does not constitutea part of the gross income of that pe. The specified payments are, a) Royalties(Include rental of equipment), b) Consideration for research and development, c)Consideration for the use of or right to use computer software, d) Management fees.Royalties referred above are defined as (1) consideration for the use or right to use of(a) intellectual or proprietary right either for artistic, literary or scientific work,including computer software, cinematograph films, or films or tapes or discs or anyother media used for radio or television broadcasting, (b) patent, trademarks,drawings, model and secret process or formula, (c) industrial, commercial or scientificequipment, (2) consideration for information concerning industrial, commercial orscientific experience, (3) consideration for granting rights to work mineral or othersources of natural wealth.The taxpayer who has paid or credited any of the specified payments is responsible todeduct 10% tax from the gross amount paid or credited and the remittance should bemade to the Secretariat General not later than 14 days from the end of the monthfollowing the month in which that amount is paid or credited, whichever is earlier.Delay in remittance in withholding tax to the tax department shall attract 1%additional tax per month of the tax due.
  • 41. Oman Tax Facts 2012 41 Personal Income TaxThere is no personal taxation system for income, capital gains, gifts or inheritances inOman and, furthermore, no requirements to file any form of tax return.
  • 42. Oman Tax Facts 2012 42 Social Insurance and Other ContributionsSOCIAL INSURANCEOmani employees are protected by Social Security Law. Employers are required toregister all Omani employees with the Public Authority for Social Insurance (PASI) andmake monthly contribution of 10.5% of basic salary along with 6.5% contribution byemployees (deducted from Omani employee’s salary).END OF SERVICE BENEFITExpatriate employees at the completion of their employment contract are entitled toan end of service benefit which is calculated on the following basis: Fifteen days basic salary for every year of service for the first three years of continuous service; One months basic salary for every year of service thereafter.
  • 43. Oman Tax Facts 2012 43 Other Duties and FeesCUSTOM DUTYImport of goods which originates from Non GCC countries are subject to a customduty of 5% of import value. Equipment imported by companies for short duration orfor the duration of the project are subject to import the equipment by paying thecustom duty as deposit and are entitled to obtain refund after re-exporting therelevant equipment.OTHER TAXES/DUTIESMunicipal tax is levied @ 5% on hotel income, 3% on property rents, 10% on leisureand cinema income and 2% on electricity bills exceeding RO 50 per month. Tourismlevy of 4% and service charge of 8% are also charged on hotel income. A sewerage taxof 10% on water consumption is levied on houses using the drainage system.VALUE ADDED TAXOman has no value added tax.
  • 44. Oman Tax Facts 2012 44 Bi-lateral Tax TreatiesOman has signed treaties for the avoidance of double taxation with the followingcountries.Algeria, Bangladesh, Belarus, Belgium, Brunei Darussalam, Canada, China, Croatia,Egypt, France, Germany, India, Iran, Italy, Kazakhstan, Lebanon, Malta, Mauritius,Moldova, Morocco, Netherlands, Pakistan, Russia, Seychelles, Singapore, South Africa,South Korea, Sudan, Syria, Thailand, Tunisia, Turkey, United Kingdom, Uzbekistan,Vietnam, Yemen.Note: Some of the above treaties are have not been ratified or not yet in force.Oman has also entered into treaties with several countries with respect to theavoidance of double taxation on income generated from international air transport.
  • 45. 45 QATAR TAX FACTS 2012Gavin BrownPartnerBDO Qatar1st Floor, Tornado TowerPO Box 24139, DohaState of QatarTel: +974 44999 530Fax: +974 44999 533Email:
  • 46. Qatar Tax Facts 2012 46CONTENTS47 Registration with Tax Authorities48 Corporate Income Tax49 Withholding Tax on International Transactions
  • 47. Qatar Tax Facts 2012 47 Registration with Tax AuthoritiesREGISTRATIONIn order to comply with the provisions of the tax law, all resident companies (Business withPermanent Establishments) are required to register with Qatar Public Revenues and TaxesDepartment (PRTD) within thirty days from the commencement of the activity; and to obtain atax card (which will essentially be an ID card for tax purposes). A financial penalty amounting toQR 5,000 shall be imposed in the case of failure to register with the tax department on time. Inregistering companies for tax and subsequently issuing them with a tax card, the PRTD willrequire certain information from the taxpayer.PROCEDURESEvery tax payer carrying on an activity in the State of Qatar shall submit an application from thedate of effectively of the tax law for tax payers carrying on activity at that date in accordancewith the limits, conditions and procedures provided for in the executive regulations of the taxlaw.REQUIREMENTSThe process will require: gathering all relevant information required from the tax department;drafting and submission of the application to the department; liaising with the department andensuring that all enquiries are answered promptly; and following-up with the department untilthe issue of the tax card.
  • 48. Qatar Tax Facts 2012 48 Corporate Income TaxRATES OF CORPORATE TAXIn general, the standard rate of corporate tax is 10% flat rate applied to the company’s nettaxable profits starting from the beginning of January 2010.THE CORPORATE TAX YEARThe rate of corporate tax is fixed in respect of the corporate tax year or the financial year.The company has the right to choose the date of year-end to issue its annual financialstatements, regardless of the calendar year. Each year has to be accounted for separately. Thefirst year is to start from the date of incorporation to the end of the following financial year (thefinancial period should not exceed 18 months).DEDUCTIBLE EXPENSESThe general rule is that only expenses that are wholly and exclusively incurred in earning theincome of the business are deductible. The cost and expenses have to be supported by properdocuments.ACCOUNTING METHODS AND BUSINESS PROFITSA company’s taxable income is based on its accounting profits, computed according to theInternational Financial Reporting Standards.FILING REQUIREMENTSThe corporate tax return must be filed along with all supporting documents (e.g. Auditedfinancial statements), within four months from the accounting year end, e.g. 30 April, for 31December year-end.CARRY FORWARD LOSSESLosses are carried forward for deduction from subsequent profits for up to five years.DIVIDENDSThere is no withholding tax on the payment of dividends, whether the recipient is resident ornon-resident.
  • 49. Qatar Tax Facts 2012 49 Withholding Tax on International TransactionsBASIS OF TAXATIONThe new tax law has been applied from the beginning of year 2010 and it introduced arequirement to operate withholding tax on certain payments to foreign companies which are notresident or do not have a Permanent Establishment in Qatar. The obligation to deductwithholding tax applies to all businesses operating in Qatar regardless of whether they are 100%Qatari owned or partly foreign owned. (There is no exemption)RATES OF WITHHOLDING TAXUnder the new law, businesses in Qatar must deduct withholding tax at the rate of 5% onpayments of royalties and technical fees, and at the rate of 7% on payments of managerial,consultancy fees, directors’ fees, attendance fees and any other payments to non-residents forservices carried out wholly or partly in Qatar. Payments for a pure supply of goods are notsubject to withholding tax however if there is a service element involved, this portion would besubject to withholding tax.FILING REQUIREMENTSBusinesses which deduct withholding tax from payments made to non-residents are required toremit this to the Tax Department by the 14th day of the month following the month in which thepayment was made.Detailed letter will need to be provided to the tax department along with the payment and thepayer will also need to issue a receipt to each of the parties from whom it deducted thewithholding tax.Failure to deduct the withholding tax and remit it to the tax department by the specified datewill result in a penalty for the entity equal to the amount of the withholding tax. This is inaddition to payment of the withholding tax itself.
  • 50. 50 SAUDI ARABIA TAX FACTS 2012BDO Dr. Mohamed Al-Amri & Co.P.O.Box.: 8736,Riyadh 11492Tel: +966 1 278 0608Fax: +966 1 278 2883Email:
  • 51. Saudi Arabia Tax Facts 2012 51CONTENTS52 Zakat53 Income Tax56 Withholding tax57 Other Taxes58 Social Insurance
  • 52. Saudi Arabia Tax Facts 2012 52 ZakatRATES OF ZAKATZakat is a religious tax, levied on Saudi nationals, wholly Saudi-owned companies and the Saudishareholders’ share of profits of companies with foreign participation, in accordance with Islamiclaw "SHARIA". For this purpose, GCC nationals and companies are treated as Saudis. Zakat ispayable annually on the higher of Adjusted Net Income or Zakat base (which is calculated ingeneral on the net worth). The rate of Zakat is 2.5%.ZAKAT YEARThe rate of Zakat is fixed in respect of the corporate financial year.DEDUCTIBLE EXPENSESThe general rule is that all actual expenses are deductible for Zakat calculation purposes. Thecost and expenses have to be supported by proper documents.ACCOUNTING METHODS AND BUSINESS PROFITSZakat is payable annually on the Zakat payers total capital resources and income, excludingamounts invested in fixed assets. The rate of Zakat is 2.5%.FILING REQUIREMENTSZakat return must be filed within 120 days from the accounting year end, e.g. 30 April, for 31December year end.CARRY FORWARD LOSSESWhere Zakat is calculated on the Zakat Base (net worth), losses are carried forward as part ofthe equity. Where Zakat is calculated on net Zakat adjusted income no offsetting of losses areallowed.
  • 53. Saudi Arabia Tax Facts 2012 53 Income TaxREGISTRATIONIn the Kingdom of Saudi Arabia every person subject to tax shall register with the Department ofZakat and Income Tax before the end of its first fiscal year.RATES OF INCOME TAXA 20% income tax rate is applicable to the taxable income of non-Saudi individuals in business,companies registered in Saudi Arabia, and non-resident individuals and companies carryingbusiness activities through a permanent place of business in the Kingdom. Income includes allincome, profits, gains of any type and of any form of payment resulted from carrying outactivity, including capital gains and any incidental income.A Natural Gas Investment Tax (NGIT) is applicable on any person, natural or corporate, Saudi ornon-Saudi, taxable income derived from exploration, production, collection, treatment,transportation, processing and fractionation of natural gas, natural gas liquids and gascondensates. The NGIT rate for any taxable year is determined based on the internal rate ofreturn on the cumulative annual cash flows of the taxpayer from the natural gas investmentactivities. Based on the NGIT rates table, the NGIT rate can range from a minimum of 30% for aninternal rate of return of 8% to a maximum of 85% for internal rates of return of 20% and above.A tax rate of 85% is applicable to the taxable income from oil or other hydrocarbon productionactivity in the Kingdom.EXEMPT INCOMEThe following income types are exempt from income tax: a) capital gains realized from disposal of securities traded in the Stock Market in the Kingdom in accordance with controls specified in the By-law. b) gains on the disposal of property other than assets used in the activity.THE CORPORATE TAX YEARThe rate of corporate tax is fixed in respect of the corporate tax year or the financial year.The company has the right to choose the date of year-end to issue its annual financialstatements, regardless of the calendar year. Each year has to be accounted for separately. Thefirst and last year should be a short period unless otherwise is agreed with the tax authority.
  • 54. Saudi Arabia Tax Facts 2012 54 Income Tax - ContinuedDEDUCTIBLE EXPENSESThe general rule is that only expenses that are wholly and exclusively incurred in earning theincome of the business are deductible. The cost and expenses have to be supported by properdocuments.CAPITAL GAINCapital gain derived from disposal of fixed and traded assets, or from disposal of shares in aresident company is subject to tax at 20%.The following incomes are exempt from income tax:(a) Capital gains realized from disposal of securities traded in the Stock Market in the Kingdom inaccordance with controls specified in the By-law.(b) gains on the disposal of property other than assets used in the activity.ACCOUNTING METHODS AND BUSINESS PROFITSA company’s taxable income is based on its accounting profits, computed according to the SaudiAccounting Standards, which is, to a great extent, compliant with the International FinancialReporting Standards (IFRS).Certain adjustments are required to be made to the accounting profit to arrive at taxableincome.FILING REQUIREMENTSThe corporate tax return must be filed along with all supporting documents (e.g. Auditedfinancial statements), within 120 days from the accounting year end, e.g. 30 April, for 31December year end.Partners in a partnership and professionals must submit their tax return within 60 days from theaccounting year end.
  • 55. Saudi Arabia Tax Facts 2012 55 Income Tax - ContinuedCARRY FORWARD AND OFFSET OF LOSSESLosses are allowed to be offset equal to 25% of tax adjusted net income for the year. Losses canbe carried forward indefinitely.In case of a change of fifty percent (50%) or more in the ownership or control of a company, theshare of a non-Saudi may not be deducted in losses incurred prior to the change in taxable yearsfollowing the change.Rules for Advance Payment of taxationTax has to be paid in advance where previous year tax obligation is SR 2 million or more. In suchcase advance tax will be 25% of previous year tax obligation and has to be paid prior to the lastdate of sixth, ninth and twelfth month.DZIT has the power to reduce the amount of advance tax where the income for the year dropsby 30%.
  • 56. Saudi Arabia Tax Facts 2012 56 Withholding TaxPayments made to non-residents by a resident or a permanent establishment of a non resident,that are from a source in the Kingdom, are subject to withholding tax. Depending upon thenature of payment, the payer is required to withhold the tax at the following rates: Tax Rate % Management fees 20 Royalties, payments to head office or related parties for 15 services Dividends, loan charges, insurance/reinsurance premiums, rental (lease), technical and consulting 5 services, air tickets, air freight, shipping, and international telecommunication services Other payments – Not to exceed 15Technical and consulting services are deemed to be from a Saudi source even if they wereperformed outside the country. The person withholding the tax, irrespective of whether or nothe is a taxpayer under the tax law, is required to register with the DZIT, and pay the tax sowithheld within 10 days after the end of the month in which such payments are made. The payeris also required to issue a certificate to the payee stating the amount of payment and the taxwithheld.At the end of each tax year, the payer is required to submit the names, addresses and otherdetails of the payees to the DZIT no later than 120 days of the end of the fiscal year, and notlater than 60 days of the end of the fiscal year for partnerships.Withholding tax is payable upon payment or deemed payment (clearance or settlement ofaccounts). The date of settlement is considered to be the date of payment unless the settlementis between related parties in which case it is the date of book entry.A delay penalty of 1% of the amount of unpaid withholding tax is applicable for each 30 days ofdelay from the due date of the tax till such time the tax is paid.
  • 57. Saudi Arabia Tax Facts 2012 57Other TaxesAt present the following taxes are not imposed in the Kingdom: Personal tax on employees remuneration Value-added tax Withholding tax of local transactions Estate and gift taxes
  • 58. Saudi Arabia Tax Facts 2012 58 Social InsuranceSocial insurance in the Kingdom is administered by the General Organization for Social Insurance.Employers are required to make contribution for Saudi employees who are required tocontribute the same percentage of their salary in respect of social insurance. In addition,employers are required to contribute 2% of the basic salary of both Saudi and non-Saudiemployees to cover the job hazards risk.Certain categories of employees such as certain government employees, armed forces anddiplomatic personnel, domestic servants etc are exempt from social insurance contributionsSOCIAL INSURANCE RATEThe rate of Social Insurance is as follows, showing the employer and employees’ portions: Employer Employee Amount % % Gross salary of Saudi employees 9 9 (including benefits in kind) Basic salary of both Saudi and non- 2 - Saudi employees
  • 59. 59 U.A.E. TAX FACTS 2012BDO Chartered Accountants & AdvisorsSuite 305,Al Futtaim TowerAl Maktoum Street,DeiraP.O. Box- 1961, DubaiTel: +971 4-222 2869/ 228 5077Fax: +971 4-227 4867/2270151Email:
  • 60. U.A.E. Tax Facts 2012 60CONTENTS61 Corporate Income Tax62 Salary Tax63 Social Insurance64 Sales Tax & Indirect Taxes65 Stamp Tax66 Withholding Tax on Local Transactions67 Capital Gain Tax68 Tax Treaties
  • 61. U.A.E. Tax Facts 2012 61 Corporate Income TaxRATES OF CORPORATE TAXThere are decrees issued by each Emirate covering corporate tax and levying up to55% based on the income slabs, but their enforcement has been limited to foreignbanks and foreign oil companies only and there is no corporate tax for other entitiesregistered in UAE, Further, entities registered in the Free Zone are exempted fromtax for 25- 50 years as concession that is renewable.  Foreign banks have been paying a 20% tax on net profits of each of their branches in the UAE and for foreign oil companies the amount of tax paid by an oil company is based on a rate agreed in an individual concession between the oil company and the respective Emirate.THE CORPORATE TAX YEARThere is no corporate tax for other entities registered in UAE. Hence, there is no taxrelated filing obligations for the companies registered in the UAE other then foreignbanks & oil companies.DEDUCTIBLE EXPENSESThe general rule is that only expenses that are wholly and exclusively incurred inearning the income of the business are deductible. The cost and expenses have to besupported by proper documents. However as there is no corporate tax in the UAE, thesignificance of deductable expanses is limited.ACCOUNTING METHODS AND BUSINESS PROFITSThere are no Local Accounting Standards in place and to a great extent theInternational Accounting Standard (IAS & International Financial Reporting Standards(IFRS) are being followed in the UAE.FILING REQUIREMENTSThere is no tax related filing obligations for the entities registered in the UAE otherthen foreign banks & oil companies.DIVIDENDSThere is no withholding tax on the payment of dividends.PAYMENT TO NON-RESIDENTSSince there are no withholding taxes in the UAE and there are no restrictions intransferring funds into or outside the UAE or payment to non-residents.
  • 62. U.A.E. Tax Facts 2012 62 Salary TaxTAXATIONIndividuals are not taxed in the United Arab Emirates; hence there are no taxeson salary income or personal income.
  • 63. U.A.E. Tax Facts 2012 63 Social Insurance Dubai does not have obligatory state or employer-contribution insurance schemes. Nationals are automatically provided with extensive state help, including medical care, sickness and maternity cover, child care, pensions, unemployment benefit and in some instances housing and disability benefits. Foreign workers have access to medical facilities, but too little else. Private medical insurance is recommended for most foreigners. PENSIONS There are no state pension schemes in UAE for foreign expatriates. There are pension schemes for UAE nationals, which are covered under Law No 2 of 2000. The law defines salary for each of sector of entity. Contributions must be deducted from the salary. The contribution total is 26% comprised as follows: From the employee - 5% From the employer - 15% From Government - 6% The employer is responsible for collecting its and its employee’s contributions and remitting them to the pension fund. The Government pays its contribution as a separate issue directly to the pension fund. - Central Auditing Bureau - for auditing Governmental bodies and public sector entities - Central Bank of Egypt - for bank audits - Egyptian Financial Supervisory Authority - for public quoted companies, and all non-banking financial institutions. The services we provide include: - - Statutory audits - - Special purpose audits - - Internal audits- Internal control review
  • 64. U.A.E. Tax Facts 2012 64 Sales Tax & Indirect TaxesThere are no Sales taxes or VAT (Value Added Tax) in the UAE, but individualEmirates may charge levies certain services such as those provided in thehospitality industry.  Municipal taxes are charged in some of the Emirates. In Dubai a 10% municipal tax is charged on hotel revenues and entertainment.  In all the Emirates, except Abu Dhabi, Income from renting commercial premises is taxed at a rate of 10%, from renting residential premises at a rate of 5%. Abu Dhabi does not levy a municipality tax on rented premises, but landlords are required to pay certain annual license fees.TAXES ON INPUTFor goods, There are no Sales taxes or VAT (Value Added Tax) in the UAE,therefore there is applicability of taxes on inputs (Goods).For services, There are no Sales taxes or VAT (Value Added Tax) in the UAE,therefore there is applicability of taxes on inputs (Services).INVOICES DETAILSThere is no specification with regards to Invoice formats; however the standarddocumentation will apply for invoices for import & export purposes.EXPORTED & IMPORTED GOODSCustoms duty is levied at 5% on imports & exports of majority of productsexcept tobacco & alcoholic beverages which are subject to duty at higherrates.BASIS OF TAXATIONIt is not applicable in the UAE.
  • 65. U.A.E. Tax Facts 2012 65 Stamp TaxThere is no stamp duty. However, there are various fixed transaction charges forprocessing of visa, work permit, notarization, vehicle registration and otherservices from Government departmentsFILING REQUIREMENTSAs stamp duty is not applicable in the UAE, therefore there is no filingrequirement of the same.
  • 66. U.A.E. Tax Facts 2012 66 Withholding Tax on Local TransactionsTAXATIONThere are no withholding taxes in the UAEWITHHOLDING TAX Dividends Nil Interest Nil Royalties Nil Branch Remittance Tax NilFILING REQUIREMENTSThere are no filling requirements.
  • 67. U.A.E. Tax Facts 2012 67 Capital Gain TaxTAXATIONThere are no capital gain taxes in the UAE.FILING REQUIREMENTSThere are no filling requirements.
  • 68. U.A.E. Tax Facts 2012 68Tax TreatiesThe UAE is a leading country with regards to agreements to avoid double taxation.These agreements bring about a positive impact on investment promotion, economiccooperation and trade between the UAE and other countries. The UAE has anextensive and growing list of double tax treaties, which are currently more than 50countries.
  • 69. The BDO network in Middle East countries:BAHRAIN – EGYPT – KUWAIT – LEBANON – OMANQATAR - SAUDI ARABIA – U.A.E. BDO Middle East Firms are independent firms registered in respective countries. The term ‘partner’ is used to refer to our members and employees with an equivalent standing and qualification to one of our affiliated undertakings. BDO Middle East firms are members of BDO International Limited, a UK company limited by guarantee, and forms part of the International BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO member firms Copyright ©2011 BDO International All rights reserved