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Tax alert – Zakat for transport business (Arabic)

In recognition of the importance of delivering leading practice in as accessible a way as possible, our tax team in Saudi Arabia will be developing an increasing amount of content in Arabic, including webinars, alerts and briefs. This week, our team will cover zakat calculations for three key economic sectors: transport and logistics companies; real estate businesses; and construction companies. For more details, please contact Raman Ohri.

Taxflash 17 September 2020

Responding to popular demand, Keypoint’s market-leading tax team held its first TaxMatters webinar on Monday, 14 September 2020. Our next TaxMatters webinar will be held on 12 October 2020. For more information about our monthly TaxMatters webinars, contact Fatema Ghaith or a member of our tax team.

Tax alert – Real estate transferred a part of a going concern

Saudi Arabia’s tax authority, the General Authority for Zakat & Tax (GAZT) has released a circular on VAT for real estate transferred as part of a going concern. The circular restates a number of points raised in its transfer of a business guidelines, but includes some information specifically for real estate transfers. A transfer of assets constituting an economic activity – a transfer of a going concern (TOGC) – is out of scope for VAT if certain criteria – listed in both the circular and the transfer of a business guidelines – are met. Our Saudi tax team has summarised the most relevant clarifications in our new alert. To discuss any of the issues raised in this alert, please contact a member of our market-leading tax team.

FATCA/CRS health-checks & annual support

Compliance with the US’ Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) continue to be areas of concern and focus for financial institutions (FIs).

As regulations have evolved, operational parameters have changed, reporting timelines have been amended and reporting procedures have been enhanced, requiring updates to FIs’ compliance frameworks – with leading practice suggesting an external perspective to assess compliance.

Keypoint has worked with a number of FIs to develop, implement and update their FATCA and CRS frameworks. We also support the annual FATCA and CRS reporting process, including the generation of XML reports and tailored workshops (either remotely or on-premises).

For more details on our FATCA/CRS health-checks, please contact our team on mukund.ballal@keypoint.com, najeeb.razzaque@keypoint.com or ghada.awdi@keypoint.com.

Tax brief – VAT refunds for non-residents

Bahrain’s tax authority, the National Bureau for Revenue (NBR) has set out how non-residents can recover VAT incurred in Bahrain. Applications to refund VAT incurred in 2020 can be submitted from 1 January 2021. Our market-leading VAT team has developed a brief which outlines how non-residents can apply for refunds – with a suggestion that, as the process may be relatively time-consuming, potential applicants should start the process of collating required documentation.

For more details, please contact Mark Gamble.

 

Establishing an ESS

Because employee savings schemes (ESSs) are pooled investment accounts, with contributions from employees and employers, they can help attract talent and encourage long-term employment. Contributions tend to be invested in liquid investments, such as treasury bonds or bank deposits. Leading practice for schemes with significant investments is to appoint external investment managers who may invest in alternate investment products – yielding higher returns but at a higher risk.

Our Keypoint Trust team has developed a brief overview of ESSs – and the advantages of establishing them as trusts.

For more details, please contact Nandakumar Narasimhan.

 

 

Taxflash 3 September 2020

The Saudi General Authority of Zakat & Tax (GAZT) has released a guide to assist real estate businesses with calculating zakat liabilities. Zakat payers can calculate their zakat base by adding internal and external source of funds (zakatable assets) and subtracting fixed assets, accumulated losses and long-term investments (non-zakatable assets). Zakat is payable on the higher of the zakat base – calculated at 2.5% for 354 days (the length of the Hijri year) or 3.5% of tax-adjusted profits. See our TaxFlash for more.