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News from JIACC

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Incontri in Bahrein e negli Emirati

Continuano le missioni JIACC in Bahrein e negli Emirati Arabi Uniti per favorire le relazioni economiche e per preparare il Secondo Business Forum Italo Arabo, che si terrà a Roma il 17 ottobre 2018. 

Il Vice Presidente della JIACC ha incontrato la Bahrein Chamber of Commerce & Industry, che ha ribadito la proficua collaborazione con la JIACC. Sameer Nas, Presidente della Bahrein Chamber of Commerce and Industry, ha inoltre accettato di entrare a far parte del Board della JIACC,confermando al contempo l'interesse a partecipare al Secondo Business Forum Italo Arabo.

Incontri di alto livello anche negli Emirati Arabi Uniti con il Sottosegretario al commercio estero emiratino Abdallah Al Saleh, che ha confermato tutto il supporto per la promozione del Secondo Business Forum Italo Arabo, che si terrà a Roma il prossimo 17 ottobre.

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JIACC is now on Twitter!

The Joint Italian Arab Chamber of Commerce is on Twitter (@Italian_Arab)! Follow us for the latest news on Italian-Arab economic relations!

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Road to:

Second Italian-Arab Business Forum

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102 Days / 16 Hours / 15 Minutes Left

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Save the Date!

The Second Italian Arab Business Forum will take place in Rome on October 17, 2018 in the prestigious and modern "Auditorium della Tecnica", at the headquarters of Confindustria.

Innovation, Digital Economy, Logistics, Infrastructures and Agribusiness...

 

This year the Second Italian Arab Business Forum will address pivotal topics and sectors in Italian Arab economic relations. The event is a great opportunity for both Italian and Arab companies to share ideas, experiences and information and to foster new partnerships. Learn more.

Stay tuned to learn more on the must-attend Italian Arab economic event.

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Our Members in the Arab world!

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Iraq-Italia: SACE sostiene commesse Nuovo Pignone

SACE, che insieme a Simest costituisce il Polo dell'export e dell'internazionalizzazione del Gruppo CDP, ha finalizzato un'operazione da 190 milioni di dollari a sostegno delle commesse affidate a Nuovo Pignone (divisione italiana di Baker Hughes, GE company). Read more.

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Per la prima volta le immagini dalla Diga di Mosul

Le telecamere entrano per la prima volta in uno dei cantieri più complessi al mondo, riprendendo da angolazioni inedite i lavori di messa in sicurezza della diga di Mosul in Iraq. Sotto la Direzione lavori Usace (US Army corps of engineers), incaricata dal Ministero delle risorse idriche irachene, Trevi sta affrontando con successo una sfida umana e tecnologica che ha attirato l'attenzione dei media di tutto il mondo: mettere in sicurezza una delle dighe più imponenti del Medio Oriente. Per vedere il video

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News from the Arab world

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Egitto-Italia: Maire Tecnimont  firma accordo con Carbon Holdings

Maire Tecnimont, attraverso la propria controllata Tecnimont, ha annunciato di avere firmato un accordo preliminare con Carbon Holdings per la realizzazione di unità di polietilene da realizzarsi presso il complesso petrolchimico egiziano, situato a Ain Sokhna.

Read more.

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Accordo JIACC

Egitto-Italia: ministro Petrolio riceve Amb. Cantini

Il ministro del Petrolio egiziano, Tarek el Molla, ha ricevuto l’ambasciatore d’Italia al Cairo, Giampaolo Cantini.

Read more.

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Sudan-Italia: ambasciata italiana lancia "Ape felice"

In occasione delle celebrazioni della Festa della Repubblica, l’ambasciata d’Italia in Sudan ha lanciato un’iniziativa di solidarietà dal titolo "Ape Felice".

Read more.

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Altre News JIACC

Iraq: stanziati primi fondi per città vecchia di Mosul

Il governo iracheno ha approvato un primo progetto per la ricostruzione della città vecchia di Mosul.

Read more.

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Libano-Tunisia-Italia: il Maxxi in tournée mediterranea

20 opere di 13 artisti italiani, per una tournée mediterranea sulla tradizione classica e la ricerca artistica.

Read more.

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News from Italy

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Italy budget deficit narrows in June from year earlier

Italy posted a state sector budget deficit of around 2.83 billion pounds(3.2 billion euros) in June, narrowing from a deficit of 8.4 billion in the same month last year, the Treasury said on Monday.

Read more.

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News & Data JIACC

Italian jobless rate lowest for almost 6 years

Italy's jobless rate rate fell in May to its lowest in almost six years as some 114,000 jobs were created.

Read more.

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Noi Italia: 100 statistics to understand Italy

"Noi Italia. 100 statistics to understand the country we live in" provides a general framework for understanding the different economic and social aspects of Italy, its role within Europe and its territorial differences.

Read more.

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JIACC's Tax Commission

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UAE / Central Bank issues new notice on the application of VAT

 

The Central Bank of the United Arab Emirates (“Central Bank”) has recently issued a notice to UAE banks and finance companies on the application of VAT to the capped fees charged in respect of loans and other services offered to individual customers.

The newly issued Notice No.157/2018 (“Notice”) replaces a previous notice issued by the Central Bank (Notice No. 421/2017 dated 28 December 2017) which restricted banks and finance companies from increasing their existing fee structures for individual and non-individual customers and instructed them to absorb any applicable VAT until further notice.

The Notice amends Appendix 2 of the Regulations Regarding Bank Loans and Other Services Offered to Individual Customers (Circular 29/2011). Notably, the Notice states that:

(a)    fee caps are exclusive of UAE VAT;

(b)   banks and finance companies will need to notify and seek approval from the Central Bank ex-ante for any planned introduction of a new fee or a change in existing fee levels (which exceeds 5%) for fees which are not capped;

(c)    the Notice is applicable prospectively with effect from 19 June 2018; and

(d)   banks and finance companies need to provide the Central Bank with a full list of fees charged within 30 days from the effective date of the Notice.

Banks and finance companies should consider the impact of the new Notice on their existing fee structures, ensure compliance with the VAT legislation if they decide to pass on the VAT to their customers and communicate with their customers on any changes to their existing fee structures.

Original article: (https://www.tamimi.com/news-room/central-bank-issues-new-notice-on-the-application-of-vat/)

Authors: Shiraz Khan, Senior Tax Advisor, Al Tamimi & Company and JIACC Tax Commission Member (s.khan@tamimi.com) & Janet Gooi, Associate, Al Tamimi & Company (j.gooi@tamimi.com).

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UAE / FTA issues clarification on “compensation type” payment

The UAE Federal Tax Authority (FTA) issued  a clarification concerning “compensation type” payments (hereinafter, “the Clarification”).

VAT applies on supplies of goods and services. Conversely, where such payment is not a consideration against goods and services supplies, the payment is not subject to VAT.

The Clarification stresses that whether a payment is consideration for a supply is a matter of fact that entails considering the underlying arrangements that give rise to the payment.

To this token, the Clarification considers a list of examples in which the qualification of compensation as payment could be controversial.

Liquidated damages

Liquidated damages are predetermined amounts that parties designate for the injured

party to collect as compensation upon a specific breach of contractual duties (such as an early

termination of a contract or delay in performance duties). As the purpose of such payment is not to provide consideration for a supply as such, but compensating for a loss of earnings, such payment is out of scope for VAT purposes.

Payment to settle a dispute

Where payment is the outcome of a dispute settlement, one shall consider the legal title for it.

If the payment is due in respect to a compensation for a loss or a damage, the payment is outside the scope of VAT.

Conversely, where the payment is due in respect to a contractual supply, such payment entails a consideration that shall be chargeable for VAT purposes.

Fines and penalties

Since fines and penalties are due in respect toa breach of contractual or legal duties “true fines and penalties” are out of scope for VAT purposes.

Payment for damaged goods

Where payment is due in respect to damages for a good, in general terms, the payment shall not be subject to VAT. Nevertheless, where such payment is due in respect to a good that the party shall take title over, the payment shall be charged with VAT.

Holistic approach

The FTA clarifies that the interpret shall take a holistic approach considering the contractual and legal arrangements “in full” to determine the reason for the payment and, namely, whether: (i) the payment is consideration for any previously agreed supply; (ii) the payment is consideration for any newly created supply; (iii) the purpose of the payment is to adjust a previously agreed consideration; (iv) a party is either granting a right or promising not to exercise a right in return for a payment; and (v) a party is giving something up in return for a payment.

Author: Roberto Scalia, Chairman JIACC Tax Commission

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UAE/ FTA’s Clarification on the “profit margin scheme”

The UAE Federal tax Authority (FTA) issued a useful clarification (shortly, the Clarification) in respect to the sc. “profit margin” (shortly, the “PM”) scheme.

Under UAE VAT Laws and Regulations, the PM scheme applies only in respect to goods that have been previously subject to VAT. Accordingly, as clarified by the FTA, stock of used goods acquired before the entry in force of VAT or which have not previously been subject to VAT for any other reason, are not eligible to be sold under the PM scheme.

The Clarification tackles the following aspects: (i) goods that qualify for the PM scheme; (ii) conditions to apply the PM scheme; (iii) goods purchased prior to the entry into force of the regime; (iii) evidence.

Goods qualifying under the PM scheme

Only the goods listed below (that have been previously subject to VAT) qualify for the PM scheme: (i) second hand goods, meaning tangible moveable property that is suitable for further use as it is or after repair; (ii) antiquities (goods that are over 50 years old); (iii) collectors’ items (that is: stamps, coins, currency and other pieces of scientific, historical or archaeological interest).

Conditions to apply the PM scheme

Some conditions shall be fulfilled for the PM scheme to apply.

First, the goods must have been purchased by a person that is not registered for VAT purposes or a person that has calculated VAT on the supply by reference to the profit margin (i.e. a VAT registered business which already applied the profit margin scheme on the same goods).

Second, the taxable person made a supply of goods on which Input VAT was not recovered.

Goods purchased prior (and after) Jan 1st 2018

The Clarification stressed that goods acquired until the end of 2017 (and not subject to tax) cannot enjoy the PM scheme while those acquired in or after 2018 can enjoy the PM scheme. In the latter case, there shall be evidence that the good has been charged with VAT (that is not the case where the good was not subject to VAT being acquired before 2018).

Evidence

As the PM scheme relies upon the previous VAT status of the good (i.e. either subject or not subject to VAT), the evidence of such status is a pillar of the discipline.

The FTA clarifies that the taxable person could put forth information concerning the date in which the good was first manufactured, sold or brought into use and, as an example, in the case of a car, the date the car was first registered would indicate its sale would have been subject to VAT if it was registered on a date after 1 January 2018. Evidence could be also provided that the supplier paid VAT on their original purchase e.g. by asking the supplier for a copy of the tax invoice relating to their purchase of the good.

The example above are not exhaustive, as the FTA clearly points out.

Author: Roberto Scalia, Chairman JIACC Tax Commission

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UAE / UAE signs the Multilateral Instrument

On 27 of June 2018, during a meeting of the BEPS Inclusive Framework held in Lima (Peru) the UAE signed the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, (sc. Multilateral Instrument or ‘MLI’).

This step ahead towards compliance with International tax standards endorsed at the OECD level involving also non-Member States and jurisdiction is coherent with recent the UAE approach in complying with all international standards such as joining the BEPS Inclusive Framework (in May 2018).

The MLI entered into force on , July 1st, following the ratification by five jurisdictions (Austria, the Isle of Man, Jersey, Poland and Slovenia). Recently, other countries also deposited their instrument of ratification with the OECD (Serbia, Sweden, New Zealand and the United Kingdom on 29 June 2018).

Other jurisdictions, namely New Zealand, Serbia, Sweden and the United Kingdom deposited the instrument of ratification with the OECD in June 2018 and the MLI will enter into force, for them, on 1October 2018.

Notably, the MLI will not be functioning as an amending Protocol to existing Double Tax Treaties, but will be applied alongside existing Double Tax Treaties modifying their application in order to implement the treaty-related BEPS measures.

Accordingly, once in force in the UAE, you’ll have shall check the impact of the MLI on existing Double tax Treaties signed and in force in the UAE.

As for other JIACC Member States, at the Lima meeting Algeria, Lebanon and Oman have expressed their intention to sign the MLI.

For more information contact info@jiac.it

Author: Roberto Scalia, Chairman JIACC Tax Commission

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