Page 17 - ICAI UAE TAX UPDATE_October 2024

4 OTHER TAX UPDATES

4.1 GCC Updates – October 2024

The GCC region has seen significant tax regulatory changes significantly impact foreign capital companies,
advancements in October, reflecting ongoing alignment authorized distributors, and potential new market
with global tax standards and enhanced compliance entrants in Bahrain, necessitating a review of their
measures across sectors. Bahrain introduces the compliance with the revised requirements.
Domestic Minimum Top-Up Tax for MNEs under OECD
BEPS Pillar Two, promoting transparency and ensuring VAT Compliance Initiatives: The NBR recorded 24
fair taxation of large entities. Saudi Arabia provides new VAT violations from inspections in September,
non-profit organizations with a new VAT refund guide, reinforcing VAT compliance.
aiming to streamline sector-specific compliance, while
Qatar finalizes a modernized tax treaty with Norway, The National Bureau of Revenue (NBR) in Bahrain has
and Oman mandates auditor registrations to enhance intensified its VAT compliance monitoring efforts during
tax advisory quality. These developments highlight September 2024. Through 193 field inspections, the
the region’s commitment to a more standardized and authority identified 24 instances of VAT non-compliance.
transparent tax environment, crucial for businesses The violations primarily encompassed three areas:
operating in or entering the GCC market.
• Non-adherence to VAT invoice requirements
Bahrain • Failure to display VAT-inclusive prices
Foreign Ownership Amendments: New regulations • Improper display of VAT registration certificates
permit broader foreign involvement in Bahrain’s
commercial activities. These findings underscore NBR’s commitment to
ensuring robust implementation of VAT regulations
The Kingdom of Bahrain has introduced significant across Bahrain’s business landscape.
amendments to its foreign ownership regulations
through Decision Number 53 of 2024, modifying the Construction Sector Webinar: NBR scheduled a virtual
previous Decision Number 40 of 2021. The key changes session to discuss VAT in construction, signalling
include the introduction of Article 4bis, which sets emphasis on sector-specific VAT education.
specific conditions for 100% foreign-owned distributor
companies, requiring them to have a parallel Bahraini-
owned entity (minimum 51% ownership) for the same
trademark. The amendments also revise Article 5,
substantially reducing the minimum capital requirement
from BHD 2 million to BHD 100,000, while increasing the
parent company’s revenue requirement to 750 million
Euros and expanding the required market presence
from 3 to 10 markets. Notably, the decision includes
transition provisions that protect existing companies’
operations, though new trademark distribution contracts
will need to comply with the updated regulations. These
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