The year has flown by, and we already find ourselves in December, working towards the end of the year. It goes without saying that 2024 was very busy for tax professionals in the Gulf region, and tax changes have continued coming up across the region over the past few weeks.
In this edition of Gulf Tax Insights, we explore the latest tax updates within the Gulf Cooperation Council (GCC) member states, highlighting critical changes and insights that impact businesses and investors.
Bahrain issues Executive Regulations to the Domestic Minimum Top-Up Tax Law
In December, the National Bureau of Revenue in Bahrain published the Executive Regulations to the DMTT Law as well as guidelines to aid entities in preparing for compliance with the DMTT Law. Beyond providing key clarifications on the operation of the DMTT and available reliefs, the executive regulations introduce new TP documentation requirements in Bahrain. The DMTT Law may apply to entities in Bahrain as soon as 1 January 2025.
UAE Ministerial Decision amends tax treatment of Foreign Partnerships and Family Foundations
In November, the UAE Ministry of Finance (MOF) published Ministerial Decision No. 261 including important changes to the tax treatment of Foreign Partnerships and Family Foundations. This new Ministerial Decision, with retroactive effect to 1 June 2023, provides significant relaxation of the previously applicable conditions, and makes these vehicles and structures much more user-friendly.
Saudi Arabia publishes Real Estate Transaction Tax Law
In October, Saudi Arabia published a Real Estate Transaction Tax Law (RETT Law) introducing important changes to the existing RETT regulations. Individuals and companies engaged in real estate transactions in Saudi Arabia are advised to take stock of the relevant RETT changes, as addressed in this month's article.
UAE Federal Tax Authority publishes Tax Procedures Guide on Private Clarifications
In November, the UAE Federal Tax Authority (FTA) has published a new Tax Procedures Guide on Private Clarifications. Private Clarifications can be an important tool for taxpayers to request and obtain certainty from the FTA on uncertain tax positions. The new Tax Procedures Guide includes clear insights in the cases which are open for Private Clarifications, and the requirements under which related requests can be submitted with the FTA. This month's article summarizes the key aspects of these cases and conditions.
UAE Federal Tax Authority issues Public Clarification on grace period for record-updating
In November, the UAE FTA issued a Public Clarification regarding the grace period for taxpayers to update information in their tax records. All taxpayers are responsible for having their information recorded correctly in the FTA's (digital) portal. This Public Clarification introduces a grace period from 1 January 2024 to 31 March 2025 during which taxpayers can update/rectify any incorrect information on the FTA's portal, without incurring administrative penalties.
UAE announces effective date Domestic Minimum Top-up Tax
The UAE had previously amended its Corporate Income Tax Law to implement a Domestic Minimum Top-up Tax (DMTT) in November 2023. However, the specific implementation mechanism and its effective date had not yet been finalized. In a recent press release, the UAE MOF announced that the UAE DMTT will take effect for financial years beginning on or after 1 January 2025, aligning the UAE with the OECD/G20’s global minimum tax framework under Pillar Two.
UAE MOF announces new tax incentives
The UAE MOF has introduced two new tax incentives to enhance the country’s appeal as a global investment hub:
- A refundable tax credit for high-value employment activities effective 1 January 2025; and
- A Research and Development (R&D) tax incentive scheduled to take effect on 1 January 2026.
Double Tax Treaty Developments
Over the past month, we witnessed the continued strengthening of international business relations through the expansion and updating of Double Tax Treaty (DTT) networks among GCC Member States. These developments aim to enhance the Gulf region’s attractiveness as a global business hub, facilitating smoother cross-border trade and investment activities.
Through these articles, we aim to provide you with insightful analysis and updates on the evolving tax landscape in the UAE and the wider GCC region. We hope this edition offers valuable knowledge to navigate the complexities of the current tax environment. As always, we look forward to your thoughts, comments, and feedback.
