Tax and Finance ROUND-up funds which are registered on the Qatar Exchange.
Bahrain
TAX TREATY UPDATE UAE: A double taxation treaty has been signed with Benin which grants investment tax incentives for UAE government entities...
Voluntary Liquidation Challenged
UAE: A tax information agreement has been signed by the UAE Finance Ministry and the Jebel Ali Freezone on exchange of information for tax purposes...
Following the voluntary liquidation of Bahrain Air in February, a logistics company, Almoayed Wilhelmsen has filed a case at Bahrain’s High Court arguing the decision should be annulled and the company declared bankrupt. The airline had claimed political instability had caused it financial losses and it was impacted by Government demands it immediately repay past debts. Almoayed Wilhelmsen claims it is owed 25,000 Dinars but experts have said the airline owes as much as 4 million Dinars to various companies. If the attempt is successful, Bahrain Air may be forced to open its financial books and if found to be bankrupt, its management could face criminal investigations. The hearing was secured for April. The Bahrain Government are taking steps to assist its former workers. In addition, in Bahrain Arcapita the first Gulf entity to file for US Chapter 11 bankruptcy has had its disclosure statement approved so creditors can vote on their revised restructuring plan.
Qatar: A tax treaty with Mexico came into force on 9 March 2013 and is effective from 1 January 2014...
Egypt
Stock Market Transaction Tax In March the Egyptian Tax Authorities announced a 10% capital gains tax levy on shareholders and investment funds who made capital gains from the Qatar National Bank’s takeover of the National Societie Generale. The authorities sent a formal letter to the Egyptian Exchange announcing the deal would be subject to the 10% tax in line with Article 65 of Egypt Law No. 101/2012. In December 2012, plans had also been announced to introduce a 10% tax on major stock market transactions, including IPOs and takeovers. However, at that time no date for the change was given. The announcement caught investors off-guard and after some warned the move could scare off foreign investors, the Finance Ministry
UAE: A final double income tax agreement has been signed with Hungary...
Qatar: A double taxation agreement has been signed with Guernsey as more Middle Eastern firms set up on the island... Qatar: Article 27 of the tax treaty with Malaysia has been amended changing information exchange rules...
announced the December 2012 plans to introduce the dividends and share gains tax would be scrapped.
Stamp Duty Changes The Shoura Council has approved a draft law amending the 1980 Stamp Duty law. The draft law covers annual advance, credit and loan facilities taxes granted by banks which are to be paid within one week of the end of each quarter. It also applies to advertising taxes which will increase from 15% to 20% with a differentiation between billboard, newspaper, radio and television advertisements. Advertisements relaying public authority orders or prompting elections would be exempt from the tax.
Draft Customs Law The President of Egypt’s Customs Department, has completed a new draft customs law to combat smuggling and simplify customs procedures. The proposal has been sent to the Ministry of Finance, and awaits legislative approval. The new Customs Law will amend Egypt Law No. 186/1986. The Customs Department is also studying a possible 25% reduction in the current customs duties for vehicles powered by gas or electricity.
Bank Deal Challenged Stakeholders in Egypt’s National Development Bank have brought a case to the Administrative Court, calling for a 2007 deal selling the bank to Abu Dhabi’s Islamic Bank to be revoked. In 2007, Abu Dhabi’s Islamic Bank and its shareholders offered to buy Egypt’s
National Development Bank for 11 billion Egyptian Pounds. At the time the bank’s total value was put at 38.5 billion Egyptian Pounds. Bank employees and shareholders accused the government of selling the company for below market value, in breach of the country’s mergers and acquisitions law. It is claimed under the Finance Market Law and Purchase Offer Rules, mergers and acquisitions must be based on a company’s average market value over a six-month period.
SAUDI ARABIA
ACCountancy CHECKS The Saudi Commission for Certified Accountants (SCCA) is to introduce a certified test for accountants to ensure all those in the country are properly licensed. SCCA is believed to have begun work with appropriate Government departments on the test. Experts believe that ex patriate and most certified accountants will have no problem passing the proposed test, which aims primarily to uncover those working as certified accountants without proper qualifications.
FinAncIAl Activity License The Saudi Arabia's Monetary Agency (SAMA) has published license application forms and guidance for those wishing to undertake financial activities under the Supervision of Finance Companies law. Applications must be made not only by new finance companies but also by existing companies and banks wishing to practice real estate financial activities.
| Lexis Middle East Law Alert | May/June 2013 | lexismiddleeastlaw.ae
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