Duran leads Al Nassr past Yokohama Marinos into AFC Champions League Elite semi-finals    Al Ahli cruise past Buriram into AFC Champions League Elite semi-finals    Saudi Arabia offers condolences to Iran following deadly Bandar Abbas port explosion    Saudi Arabia welcomes Palestinian leadership reforms, appointment of Hussein Al-Sheikh    Ministry of Hajj issued over 150,000 Nusuk cards for the Hajj of 2025    Saudi Arabia deports 12,866 illegal residents in a week    Pope Francis laid to rest at historic funeral in Rome    Massive explosion at Iran's Shahid Rajaee Port injures over 500 people    SFDA clears first 44-ton medical shipment for Hajj pilgrims    Over 13 million worshipers pray at Rawdah Sharif in a year    Saudi orchestra to perform at Sydney Opera House in May    Al Hilal thrash Gwangju to reach AFC Champions League Elite semi-finals    Nammos Amala Resort to open soon with Saudi-Greek designs    Saudi Arabia completes 674 Vision 2030 initiatives, achieves 93% of KPIs as ninth-year milestone marked    GACA chief chairs 16th meeting of the Steering Committee on aviation's strategy    Alkhorayef praises advancements in Al-Kharj food industries sector    Saudi Theater Commission launches its Work and Learn Project in UK    The season has begun — and one comment shook us all    Average life expectancy in Saudi Arabia rises to78.8 years    Famed Philippine film star Nora Aunor dies at 71    Pakistani star's Bollywood return excites fans and riles far right    Veteran Bollywood actor Manoj Kumar dies at 87    Bollywood actress vindicated over boyfriend's death after media hounding    Grand Mufti rules against posting prayers and preaching in mosques on social media    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Deloitte: GCC is one step closer to VAT implementation
Published in The Saudi Gazette on 10 - 12 - 2015

Agreements were reached in recent days by members of the GCC on certain design aspects of the Value Added Tax (VAT) systems that are expected to be implemented around the region over time.
These agreements mark an important step forward in the increasingly important fiscal reform debate and provide a clearer vision as to what the future of tax in the GCC will look like.
The big question now is "when" not "if" VAT will be implemented, and, importantly, by which country (or countries) first.
According to a Deloitte recent report VAT is considered efficient, cheaper to operate, less open to fraud, and less likely to distort investment decisions by businesses than any other form of direct tax.
The multilateral agreements which were revealed this week would appear to be those which are designed, primarily, to ensure that certain social-economic distortions often associated with VAT are minimized.
In particular, removing VAT from food products (94 items have been identified), healthcare and education would appear to reflect a broad desire to ensure that these vital household expenditure items are not directly impacted by a VAT in the GCC.
"That negotiations around financial services are on-going and is, to some extent, to be expected. It is a challenging area and there are numerous issues at play here," explains Stuart Halstead, indirect tax leader at Deloitte Middle East.
"The first is that financial services are notoriously ‘difficult' to apply VAT to from a technical perspective; precisely identifying the value added of a financial service can be difficult for institutions themselves, let alone tax authorities charged with checking that the institutions got their sums right."
In addition, policy makers are generally concerned about unnecessarily taxing investment and savings products. From the perspective of many, such instruments do not represent consumption per se, but rather the creation of wealth for the purposes of enabling consumption in the future.
Taking that analysis one step further, there are those that feel that applying VAT to any financial instrument that merely enables consumption (e.g. lending) is also potentially harmful.
Finally, most of the GCC members are seeking to grow their financial services market presence to some extent — it is unlikely that they would want to enable significant tax and associated market distortions to emerge around the region.
That being said there are some reasonably straight forward remedies to the issue of applying VAT to the financial services industry and we are confident that these will have been examined at length," he explains.
"The UAE Ministry of Finance reiterated its commitment to an 18-24 months decision-to-implementation timescale, a move that should be welcomed by the business community. Providing businesses with adequate time to prepare is an important factor that contributes towards the successful implementation of a tax, particularly given the vital role that businesses play when collecting and remitting VAT to the authorities," concluded Nauman Ahmed, partner and regional tax leader at Deloitte Middle East.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients.
Deloitte provides audit, consulting, financial advisory, risk management, tax and related services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte's more than 220,000 professionals are committed to making an impact that matters. — SG


Clic here to read the story from its source.