New regulation will allow family businesses to stipulate how assets will be used in the long term and facilitate the development of charitable trusts
10 Mar
Oman to offer investors long-term residency; cut income tax on SMEs
Oman is one of the Gulf’s weakest economies and was hit hard by the coronavirus pandemic and low oil prices.
Oman will reduce income tax for small and medium businesses for 2020 and 2021 and will offer long-term residency permits for foreign investors, state TV said on Tuesday.
The plans announced on state media are part of Oman’s Vision 2040 aimed at diversifying the economy away from oil, which makes up the bulk of state revenues.
Oman is one of the Gulf’s weakest economies and was hit hard by the coronavirus pandemic and low oil prices. The International Monetary Fund said last month its economy likely shrank 6.4 per cent in 2020 and estimated it would make a modest recovery to 1.8 per cent growth this year.
The measures also include income tax being reduced for companies in sectors aimed at economic diversification that will begin operating this year.
Oman will also cut rent at the Duqm Special Economic Zone and industrial areas until the end of 2022.
It said granting longer residencies for foreign investors would be done “in accordance with specific controls and conditions that will be announced later after their study is completed by the Council of Ministers, in addition to incentives related to the market.”
The cabinet also approved a long-term urban growth strategy that “is considered a key enabler for achieving Oman Vision 2040,” state TV said citing Oman’s ruler, Sultan Haitham bin Tariq Al Said.
Source:https://www.khaleejtimes.com/business/oman-to-offer-investors-long-term-residency-cut-income-tax-on-smes
08 Mar
UAE tax: Services provided by artists, social media influencers subject to VAT
Announcement shared in the latest Basic Tax Information Bulletin.
The Federal Tax Authority (FTA) has clarified in a bulletin that services provided by artists and social media influencers (SMIs) for consideration are subject to Value Added Tax.
The bulletin outlines that VAT applies to such services provided by artists and social media influencers that include, but are not limited to, any online promotional activities performed on behalf of other businesses for a consideration, such as promoting a product in a blog or a video or otherwise promoting a business on a social media post, any physical appearances; marketing and advertising related activities; providing access to any social media influencers’ networks on social media, and any other services that the SMIs may provide for a consideration.
This announcement was shared in the latest Basic Tax Information Bulletin issued by the FTA on the tax treatment of services provided by artists and social media influencers.
The bulletin clarified that if an artist or influencer incurs any costs in providing a service and subsequently recovers that cost from its client, such reimbursement falls within the scope of VAT in the UAE.
Source:https://www.khaleejtimes.com/business/vat-in-uae/uae-tax-services-provided-by-artists-social-media-influencers-subject-to-vat
04 Mar
New AML steps to ensure strict compliance
The Ministry of Economy announced the extension of the grace period for registration in its systems to combat money laundering until March 31, 2021, and warned that companies that fail to register would be subject to penalties including suspension of licences and closure
The new initiatives announced by the UAE, which are in line with the government’s ongoing efforts to combat money laundering crimes, will help ensure strict compliance with the anti-money laundering law (AML) and enhance the economy’s ability to achieve sustainable growth, the Ministry of Economy said.
The latest move by the Ministry of Economy is in accordance with the Cabinet Resolution No. (16) of 2021 regarding a list of types of violations and administrative fines for such violations with regard to combatting money laundering and terrorism financing.
The list includes 26 types of violations and stipulated fines that range from Dh50,000 to up to Dh1 million, which could be doubled up to Dh5 million in certain cases.
In a statement, the Ministry of Economy announced the extension of the grace period for registration in its systems to combat money laundering until March 31, 2021, and warned that companies that fail to register would be subject to penalties including suspension of licences and closure.
The ministry called on companies practicing in four main categories — including brokers and real estate agents, dealers of precious metals and gemstones, auditors and corporate service providers — to enhance their awareness and knowledge on the risks of money laundering and keep pace with the government’s efforts in this regard.
The first step to be taken by these companies is to register on the Financial Intelligence Unit (goAML) and on the Committee for Commodities Subject to Import and Export Control system (Automatic Reporting System for Sanctions Lists).
“Following their registrations on these two systems, they should adopt other measures related to the two systems in accordance with the provisions of the Decree-Law, its implementing regulations and the relevant decisions.”
The Ministry clarified that the grace period for registering on the two systems has been extended until March 31, 2021, and that the companies that fail to do so before this date will be subject to penalties, including suspension of the license and closure of the facility.
In addition, the ministry underlined the significance of completing the post-registration procedures and measures to avoid the fines set by the Cabinet Resolution No. 16 of 2021.
Safeya Al Safi, director of the Anti-Money Laundering Department, MoE, said all concerned companies should establish internal policies, procedures and controls to avoid money laundering risks in accordance with the measures set forth by the executive regulations of the law.
Al Safi said the measures reflect the UAE’s keenness to continuously develop its economic legislation to enhance its competitiveness as a safe and stable global business destination.
The list of violations mentioned in a Cabinet resolution includes three types with a fine of Dh1 million each. These include dealing with fake banks; opening or maintaining bank accounts with fake names or numbers without the names of their owners; and failure to take measures related to clients listed on international or domestic sanctions lists, prior to establishing or continuing a business relationship.
The list includes five violations with a fine of Dh200,000 each; seven violations with fines of D100,000 each; and 11 violations carrying fines of Dh50,000 each.
In terms of administrative fines and the grievance mechanism, the resolution states that the Ministry shall notify the violators of the Designated Non-Financial Businesses and Professions (DNFBPs) included in the administrative fine decision signed on him within 15 days from the date of its issuance.
The violator has the right to grievance against the decision of the administrative fine to the minister or whoever he authorises within 15 days from the date of his notification of the decision or his knowledge of it, the MoE statement said.
Source:https://www.khaleejtimes.com/business/local/20210303/new-aml-steps-to-ensure-strict-compliance
23 Feb
UAE’s new trust law to benefit onshore businesses
A new UAE Trust law passed late last year will support the development of the onshore wealth management sector in the country, a finance ministry official said.
The Federal Law No. (19) of 2020 on trusts was enacted by President Sheikh Khalifa bin Zayed in September last year.
“The decree-law regarding trusts was an important addition to the UAE’s advanced legislative structure,” Younis Haji Al Khouri, undersecretary of the Ministry of Finance, said.
“[It] supports the wealth management sector in the country and provides new mechanisms for managing companies and family funds. It also encourages the allocation of charitable trusts.”
Although trust laws exist in the UAE’s two financial free zones, the Dubai International Financial Centre and Abu Dhabi Global Market, which are based on common law, this is the first time the UAE has granted full recognition to similar arrangements within the onshore legal system, Richard Catling, a partner at law firm Al Tamimi & Company, said.
The trust law allows companies or people who own capital or other assets to transfer these in the form of a trust to a trustee, who will be responsible for managing them. A trust deed document will be created, which is recorded electronically, to oversee the assets, whether moveable or property, the ministry said.
“Over the past three decades, the UAE economy has increasingly been exposed to, and integrated with, sophisticated international business and financial practices and markets,” Mr Catling, a partner in corporate commercial and family business practice, said.
Many UAE residents are already familiar with trusts and there is already appetite within the country for these products, which range from private family trusts to publicly-traded mutual funds, real estate investment trusts and securitisation structures, Mr Catling said.
“Although these legal products are available in the UAE’s financial free zones [DIFC and ADGM], the real weight of UAE economic activity and assets lies outside these free zones in the onshore areas. Free zone trust arrangements cannot effectively govern dealings or enforce established ownership rights over UAE onshore assets, whether these comprise cash, securities, land, moveable assets or legal rights,” he added.
The UAE Cabinet announced in October last year that family-owned companies would be among the biggest beneficiaries of the new regulations, as they will allow founders to carry out succession planning and secure the long term future of company assets.
The new decree also covers charitable and private trusts that deal in securities on financial markets, as well as retirement funds to ensure that benefits are provided to beneficiaries in exchange for contributions to a trust.
Dr Hussam Al Talhouni, legal adviser at the Office of the Minister of Finance, said the necessary instruments for the administration of trusts is already being put in place.
“The trust registry for family businesses has already been created while we are working on the registry for private trusts with the Emirates Securities and Commodities Authority. It should be ready soon,” Mr Al Talhouni added.
The law will help fill a number of “obvious gaps in the onshore legal system” and will likely spur major developments in onshore law and practice, Mr Catling added.
Welcoming the new law, the DIFC said it makes the UAE a sound platform for families to plan for the future of their businesses and descendants.
“The new federal law was particularly significant because it was the first time the common law concept of the trust had been included within the civil law regimes of the Arab world,” the DIFC said in a statement.
The entity added that the new law recognised the operation of DIFC and ADGM trusts, as well as foreign trusts, within that part of the UAE outside the financial free zone.
In recent months, the UAE’s leadership has made several changes to legislation related to commerce. These include amendments to the commercial companies’ law that allows 100 per cent foreign ownership of businesses and commercial transactions legislation such as the decriminalisation of cheques. The government has also amended bankruptcy and consumer protection laws.
Source:https://www.thenationalnews.com/business/money/uae-s-new-trust-law-to-benefit-onshore-businesses-1.1163553
