unnamed 4

According to news reports, in a statement issued by the Saudi state news agency, Mohammed Al-Jadaan, the Finance Minister of Saudi Arabia, has announced an increase in the rate of VAT from 5% to 15% in Saudi Arabia from 1 July 2020.

The announcement comes after Saudi Arabia posted a budget deficit of USD 9.07 billion in the first quarter of 2020 and is reported to have cancelled/postponed certain operating and capital expenditure and also cut allocations on projects worth USD 26.6 billion.

The austerity measures are intended to help Saudi Arabia stabilize non-oil revenues and cope with public finances currently pressured by low oil prices and Covid-19. This, however, comes as an unexpected move after the recent tax announcements by the General Authority for Zakat and Tax easing tax return filing, tax payment and penalty provisions to help businesses navigate the impact of Covid-19.

The move also seems to be a deviation from the Common VAT Agreement of the States of the Gulf Cooperation Council (GCC Common VAT Framework Agreement) that only empowers member-states to levy VAT at the standard rate of 5% on taxable supplies that are not specifically exempt or zero rated (Article 25).

To access our detailed tax alert on the implications of the increase in the VAT rate in Saudi Arabia please click here.

Development in the UAE

The United Arab Emirates (UAE) introduced VAT on 1 January 2018, the same time as Saudi Arabia, and is faced by similar economic pressures. However, according to recent news reports, in an official statement issued after the announcement by Saudi Arabia, UAE’s Ministry of Finance has confirmed that they have no current intentions to increase the rate of VAT.

Budgetary Challenges in Oman

Oman, like many other countries in the region and outside, is significantly challenged with the sharp slump in international oil prices and the economic instability created by Covid-19 that continue to impact the country’s credit rating. Since the beginning of 2020, the Ministry of Finance has issued many circulars and a set of directives to government units to reduce the volume of spending. In April 2020, the Ministry of Finance announced a cut of OMR 500 million in the State Budget.

Oman has been preparing for the introduction of VAT for quite some time. This includes drafting the VAT law and executive regulations, as well as having systems in place to implement VAT when the government takes a decision on the implementation date. In an interview with Bloomberg at the World Economic Forum 2020 in Davos earlier in January this year, His Excellency Ali bin Masoud Al Sunaid, Minister of Commerce and Industry in Oman, confirmed that Oman would introduce VAT “sometime during the beginning of 2021”.

Given recent unexpected challenges, Oman may consider the possibility of implementing VAT more quickly, in a phased manner. In this case, businesses may not have a long period of time to prepare for implementation. 

VAT impacts businesses beyond finance and, among others, warrants a review of processes, systems, documentation, compliances, policies, contracts and pricing. The experience of businesses in other GCC countries, where VAT has already been implemented, shows that preparing for the introduction of VAT requires careful planning and time. However, the process is usually rushed once VAT legislation is announced with a short implementation period, resulting in, sometimes, costly errors. It is, therefore, important that businesses in Oman do not delay their plans for preparing for VAT implementation based on existing VAT legislations in the GCC and the GCC Common VAT Framework Agreement. Once the Oman VAT legislation is issued businesses can update the work already done and be fully ready.
KPMG has a dedicated team of experienced VAT implementation specialists based in Oman. If you need any assistance with VAT implementation in Oman, please reach out to your tax advisors at KPMG or the contacts mentioned below.
Ashok Hariharan
Partner | Head of Tax
AHariharan@kpmg.com
Rhys Penning
Partner | Indirect Tax
rpenning@kpmg.com
Abha Lekhak
Director, Indirect Tax
alekhak2@kpmg.com
download 2 1

Would you please tell us a bit about Azooz, and a bit about yourself as well, as a new member of the OABC?

Azooz is an online delivery app that was created with a vision to enable the Omani producers/manufacturers to sell their products directly to the consumers in Oman. For example, through Azooz,

  1. A customer in Madinat Qaboos is able to order a fresh chicken from a farm in Ibra and get it delivered within few hours of ordering.
  2. A home-based business lady is selling her spices directly to a customer in AL Mouj
  3. And many more examples like this

Whether small or big, Omani manufacturers/producers have a direct reach to customer’s homes through Azooz and are benefitting by more volumes and margins.

As Managing Director of Al-Hathaifa (and AZOOZ), I have been in Oman for last 22 years and started my journey from the oilfield to now a business that is unconventional and challenging in many ways.  The vision of Azooz is shared by my Omani partner and a great set of advisors who always are trying to bring a new dimension in Azooz. We have plans to work very closely and develop home-based businesses, SMEs, and hopefully will create an ecosystem for better reach for their businesses. We also have plans to bring models based on subscriptions, that will bring next level of convenience to consumers in Oman.

 

What has the day-to-day work been like in the past few months, and how does it compare to the work before COVID19?

We had rolled out Azooz in the month of January among friends and relatives, and from there has been no looking back. We have had great response from our customers and people have reached out to us to help us develop Azooz. With COVID-19 reaching Oman in March, we did not blindly start delivering everything, we stuck to our core cause of supporting Omani products.

Adding new vendors, deliveries, and procurement during COVID-19 challenged us in various ways. One thing that we have been constantly doing is sticking to our core belief of enabling Omani companies and Omani manufacturers/SMEs. We have some large enterprises and some small producers but we can proudly say that we have been doing our part successfully. Our vision is not restricted to the COVID-19 situation, we are focused on enabling Local Producers/Manufacturers in the long run.

 

How do companies register with Azooz to begin offering their products via the platform?

For the companies who wish to be our partners, simply send us a message on help@azooz.online. Our Vendor Development Team will assist them in completing the listing process. For customers who wish to order, simply download the app available on iOS and android platforms or through our site www.azooz.online.

Currently, customers who download the app can find some imported products.  We are working with Omani companies that import these products during the hot months — it is impossible to grow most fresh vegetables and such right now due to the climate.  So we support these importers and getting healthy food to people, year round.

What is the biggest challenge you are facing during this Pandemic? 

We have been facing various challenges during this excruciating time. The biggest one is receiving goods that we need for our business. Like eco-friendly bags, we are unable to procure them currently due to the lockdown. Similarly, some vendors are unable to deliver products that are already listed on our site. Movement limitation, workforce restriction, lack of labor has impacted all of our vendors and their product availability. Despite these challenges, we are trying our best to deliver what we commit to our customers.

 

Do you have any advice to those looking to start something new in Oman?

At present, in my opinion, any new business should be started to solve a problem. Money should not be the only motivation when starting any business, one has to ask what impact the business will have on the country’s economy and to the people in general.  There is a tough competition outside and one must be prepared to compete with some very intelligent people who keep you alert and on your toes at all times.

 

Anything else you’d like to add?

We want support from our customers as Azooz belongs as much to the customers as it belongs to us. We will make mistakes like everyone else, but we promise to learn from them and try not to repeat those errors again. We want our customers to be patient with us and we will ensure that the money they spend goes to Omani producers/manufacturers. In the long term, everyone will reap the benefit of an app that truly supports the Omani economy.

 

90471815 211376033550657 3484921762301345792 n

 

clyde and co

Business Resilience in the GCC: A webinar by Clyde & Co. 

If you’ve missed the presentation, you can download and replay the webinar on the hyperlinks below:
  1. Download the presentation
  2.  Replay the webinar
Feel free to visit Clyde & Co.’s Coronavirus COVID-19 information hub for their latest updates.
.
Clyde & Co has experience of advising on rapidly evolving, complex situations and previous epidemics. If you need any assistance, please email your preferred contact at Clyde & Co or the contacts below.
.

2. Benjamin Smith, Partner Get in touch

Thank you

microsoft

Teamwork is critical for overcoming obstacles the world faces today. To build resilience and become positioned for success, employees must be equipped with the right tools and resources.

The Oman Telecommunications Regulatory Authority (TRA) has recently announced that it has enabled access to communication tools as part of its efforts to facilitate business continuity and collaboration for public and private organizations. As such, Microsoft Teams app will be available to further empower people to work remotely and stay connected.

micr

 

Making Teams available for everyone

Teams is a part of Office 365. If your organization is licensed for Office 365, you already have it. But we want to make sure your team has access to it during this time.

If you work for a business that isn’t currently licensed for Teams, Microsoft got you covered with a free Office 365 E1 offer for six months. Please contact your Microsoft partner or sales representative to get started today.

Start using Teams to Change the way you work

1.Set up Microsoft Teams virtual meetings in place of in – person meetings

a. How to to schedule a meeting: : Watch video

b. How to join a meeting: Watch video

c. How to share your screen during a meeting: Watch video

 

2. Use Microsoft Teams virtual webinars instead of in- person meetings

a. How to use Share option to deliver the training content: Watch video

b. How to use Whiteboard to make the training interactive: Watch video

c. How to record the meeting for reply and for your knowledge base: Watch video

 

3. Set up Microsoft Teams Live Events instead of town hall events

a. How to plan and schedule a live event: Watch video

b. How to attend a live event: Watch video

c. How to moderate a Q&A: Watch video

For details on this article, please contact AbdelKarim at AbdelKarim.AbuJaber@microsoft.com

Crowe Logo

Retrieved from: Crowe Oman

The New CCL will create a more robust and transparent corporate governance regime in Oman. The new provisions would be applied in practice when an Executive Regulation will be published in the coming months.

On 18th April 2019, a New Commercial Companies Law (New CCL) entered into force in the Sultanate of Oman. The New CCL has 312 articles split into 5 parts:

1. General Provisions (Article 1 to 20)
2. General Partnerships, Limited Partnerships and Joint Venture Companies (Article 21 to 87)
3. Joint Stock Company (Article 88 to 233)
4. Limited Liability Company (Article 234 to 297)
5. Inspection, Penalties and Final Provisions. (Article 298 to 312)

In this article, we shall be covering specific areas related to Joint Stock Companies on how the companies need to gear themselves to comply with the new Commercial Companies Law.

 

Establishment

The founders of a public joint stock company may subscribe to no less than 30% of the shares of the company and no more than 60% of the shares. However, if a company is converted into a public joint stock company, the maximum is 75%. Some cases the authority may permit a higher percentage. Companies fully owned by the government and holding companies shall also be exempt from the prescribed percentage. The founders may not dispose their shares
before the company has published financials for two consecutive years from its registration date. The period may be extended to additional one year by the relevant authority. As per the new law, a holding company will take the form
of a joint stock company unlike the previous situation where the holding company had the options to be a limited liability company or a joint stock company.

 

Joint Liability

The Board of Directors and the auditors of a Joint Stock Company will be jointly liable for damages caused by their failure to take necessary measures to safeguard the company’s capital. In case the company loses 25% of its capital,
the Board of Directors need to take necessary measures to remove the reasons causing such loss and restore the company’s profitability. If the company loses 50% of its capital, an extraordinary general meeting must be convened to take the necessary decision in this regard. The meeting must be convened within a maximum of 30 days from the date on which the Board has verified the loss in capital.

 

Board of Directors

Directors and management of Joint Stock Companies must now notify the company in writing of any interest they have in the company within a maximum of 5 days from the date of his/her acquisition of membership or appointment. A director may not participate in the management of another company engaged in identical business. The members of the Board of Directors shall not be less than:

• five for public joint stock companies,
• and less than three for closed joint stock companies.
In closed and public Joint Stock Companies, the number of Board of Directors cannot exceed 11 members. In the repealed law the maximum members were 12. A director is deemed to have legally resigned if he or she fails to attend
3 consecutive meetings, unless there is an acceptable excuse provided to the Board.

 

Annual General Meeting

The Board shall send to the attendees at least 15 days before the AGM the following documents:
• Invitation for attending the meeting
• Board Reports
• Audited Financial Statements In the repealed law the notice period was 2 weeks.

 

Minority Shareholders

A general meeting shall be convened whenever required or if requested by holders representing at least 10% of the capital (in the repealed CCL it was 25%). The meeting should be held within a maximum of 30 days from the date of necessity or request. If the Board fails to convene the meeting within that period, the auditor shall convene it within
30 days from the expiry of the aforementioned period. A shareholder representing 5% of the capital can include an item on the meeting agenda (in the repealed CCL it was 10%). Additionally, if a shareholder representing 5% of the capital is of the opinion that management’s handling of the company affair’s are detrimental to their interest, they have a right to submit a request to the Concerned Body and take legal proceedings before the competent court. These
revisions in the new CCL, will better protect the
rights of minority shareholders.”

 

Quorum and Minutes of the Meetings

Quorum of shareholder meetings:
• Annual General Meeting – 50% share capital represented
• Extraordinary General Meeting – 75% share capital represented
The Minutes of the shareholders meeting now have to be filed within 7 days with competent authority. In the repealed law it was 15 days. The minutes of the meetings shall be prepared by the secretary appointed by the general
meeting. The minutes shall specify the number, percentage of share capital represented, the deliberations of the meeting, the resolutions adopted, the number of votes supporting such resolutions and anything which the shareholders want to be endorsed in the minutes.The minutes shall be signed by the secretary, the auditor and the legal advisor of the company and approved by the Chairman of the meeting.

 

Timeline

Companies have less than a year to comply with the provisions of the new CCL. It is vital for companies to review their existing governing policies and systems to ascertain whether they comply with the New CCL. The Memorandum of Association may require to be amended to incorporate the new governance processes, meeting timelines and related party reporting procedures. The coverage of list of offences have been substantially increased and non-adherence to the New CCL would result to greater penalties and sanctions.

For details on this article, please contact Paul Kallukaran at paul.kallukaran@crowe.om

Untitled presentation
Jisser internship platform was created by the support and guidance of OABC and Al Daud Foundation, you can learn more about this initiative here: https://www.aldaud.com/portfolio/al-daud-foundation/
.
As a kind gesture, Jisser has opened the platform for all OABC members to have a free account which will allow them to:
.
  • Post any internship openings in the company for an entire year
  • Build a pool of talented young graduates
  • No obligation to employ interns after the internship period
  • No obligation for payment as long as the intern agrees.

For more details contact Kalthoom Al Khamayasi at ko0ola@live.com

 

Leave a comment  1
CHC Logo

The Canadian Health Centre’s Counseling Psychologist Sara Hassan advises everyone to equally prioritize their mental and physical health during this time.

Remember that your overall wellbeing is always a priority, however; during a worldwide crisis such as Covid-19 your wellbeing and safety are crucial. Maintain a positive attitude regarding what is going on in the world and trust the process. This will pass so take advantage of the time you have towards the things you didn’t have time to do during the hustle and bustle of your daily lives prior to the pandemic. If watching and reading the news makes you anxious limit your viewing or maybe even get the latest accurate information from a trusted friend or colleague every other day rather than daily. Furthermore, adopt a positive perspective and engage in healthy behaviors like eating healthy, staying well hydrated and exercising in your home or outdoors keeping in mind and sticking to the strict social distancing rules. Although we are currently social distancing, maintaining the meaningful emotional connections is a crucial part of staying positive and hopeful together.  So utilize all the social media and electronic platforms available to you. Your feelings are valid and you are not alone so make sure you talk to family and friends and engage in those meaningful conversations.

Also, take advantage of the excessive time you have and do the things you’ve always wanted to do like draw, paint, read, dance, sing, journal, and organize your closet, for example. Finally, try to be mindful in everything you do, whether it is while walking, cooking, eating, and praying, for example. Focus on the 5 things you can see, 4 things you can touch, 3 things you can hear, 2 things you can smell and the 1 thing you can taste. This is an extremely effective grounding technique. We are all in this together so lets all show each other love, kindness and compassion.

For more information on any of the material presented here don’t hesitate to contact the Canadian Health Centre at 24139659, or connect with Sara Hassan directly on hassan.sara1@gmail.com 

IMG 20200325 WA0041 01 1

Leave a comment  1
MG 8372

The Anual Discover America was concluded on Sunday, October 20th, by celebrating and networking at the Deputy Chief of Mission’s Residence with U.S. Ambassador Sievers, an event co-hosted in partnership with the U.S. Embassy. We want to thank our members and guests for joining us and making the evening a delightful one, congratulate all the raffle winners, and extend our thanks to all of our sponsors for supporting Discover America and being a part of its success.

72949457 2414562922003680 4713985426384224256 o

As part of the annual Discover America campaign, the OABC hosted its 3rd Tech Talk Series, this time with Microsoft. AbdelKarim Abu Jaber, Territory Sales and Channel Manager at Microsoft conducted a seminar on digital transformation and cloud technologies. Attendees, together with the speaker, discussed the strategies taken in today’s technological age that aim to organize and manage different kinds of businesses. Microsoft has recently joined the OABC as a Premium Member, and we look forward to future collaboration together.

untitled 2746

On Monday, October 7th, the OABC and members of the greater business community in Oman gathered together to hold a tax and legal seminar, in partnership with EY Oman and Clyde & Co at the Grand Hyatt Muscat. The experts discussed new laws that were issued over the summer, which were designed to promote business in Oman. These include the five Royal Decrees on Privatization, Bankruptcy, Foreign Capital Investment, Partnership Between Public and Private Sectors and additional amendments to the tax laws.