Five crucial weeks to determine post-Brexit era
The EU and Britain launch an intense five weeks of negotiations on a deal to define their post-Brexit relations on Monday (29 June), with London keen to wrap things up quickly.
The new round of talks in Brussels will be the first to be held face-to-face since the coronavirus shutdown combined with the two sides’ entrenched positions to stall progress.
The meetings will alternate weekly between Brussels and London throughout July and at the end of August, as the teams learned on Sunday (28 June), British chief negotiator David Frost will be promoted to become Prime Minister Boris Johnson’s national security adviser.
Some commentators immediately suggested this could break the British side’s focus, but a UK spokesman insisted Frost’s new title does not mean he will be distracted from the ongoing discussions with his EU counterpart, Michel Barnier.
“David will remain chief negotiator for the EU talks until agreement is reached or until the talks end,” the official said.
“This will remain his first priority. As we have made clear we do not anyway wish these talks to run on into the autumn.”
EU sanctions: European Commission adopts opinion to clarify the application of financial sanctions
As part of its role to ensure the effective and uniform implementation of EU restrictive measures (sanctions), the European Commission has issued an Opinion that clarifies how existing financial sanctions should be interpreted in particular as regards the freezing of assets.
Asset freezing refers to the blocking of bank accounts and other assets of persons listed under EU sanctions. The Opinion should provide clarity to Member States’ competent authorities as regards the implementation of restrictive measures imposed by the EU in this field.
The Opinion concerns the sanctions imposed by means of Council Regulation (EU) No 269/2014 in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. It was requested by EU national competent authorities, which are responsible for implementing EU sanctions.
Similarly to other sanctions regulations, Council Regulation (EU) No 269/2014 imposes the freezing of all assets belonging to, owned, held or controlled by the listed natural and legal persons, and a prohibition to make funds and economic resources available to them.
In this regard, the Commission clarified that the assets of an entity controlled by a listed person must be frozen, even if the entity as such is not listed.
However, the controlled entity may obtain the lifting of the freeze on some or all of its assets if it provides evidence that they are in fact not controlled by the listed person.
The text further clarified that funds and economic resources cannot be made available to entities controlled by listed persons, except in specific cases foreseen as derogations in the sanctions regime.
It also specified that the provision of labor or services to entities controlled by listed persons can amount to making economic resources indirectly available to the listed persons, insofar as it enables the latter to ultimately obtain an economic benefit.
European Union Customs Code Amendments
On 26 June 2020, the EU published COMMISSION DELEGATED REGULATION (EU) 2020/877 of 3 April 2020 amending and correcting Delegated Regulation (EU) 2015/2446 supplementing Regulation (EU) No 952/2013, and amending Delegated Regulation (EU) 2016/341 supplementing Regulation (EU) No 952/2013, laying down the Union Customs Code.
Jebel Ali Free Zone offers incentives to help companies resume operations
Dubai’s Jebel Ali Free Zone (Jafza), one of the biggest trading hubs in the region, is introducing a range of incentives to support companies that are restarting operations as coronavirus-related restrictions ease in the emirate.
Existing and new customers will be able to lease warehouses on a short-term basis, with no value-added tax or customs duties, Jafza said in a statement on Wednesday (24 June).
Companies can lease Jafza warehouses ranging from 300 sqm to 15,000 sqm in size, with free water and electricity as part of the package.
Jafza also introduced flexible terms like monthly rental payments and offered to defer payments for tenants currently leasing its warehouse facilities.
“We’re working on customized solutions for a post-pandemic trading world in which our customers pay less for more value-added service support across-the-board,” Mohammed Al Muallem, chief executive and managing director of DP World, UAE Region and chief executive of Jafza, said.
“New business and existing companies will find our investor-friendly, back-to-business ecosystem built around the emerging needs of the markets in a growth climate beyond the pandemic.”
GCC Technical Committee for Chemical and Textile Products submits 70 standards to GSO
The Technical Committee for Chemical and Textile Products has submitted 70 Gulf Cooperation Council, GCC, standards’ drafts related to chemical and textile products to the Secretariat-General of the GCC Standardization Organization, GSO, during its 25th meeting held remotely.
The standards include personal protection equipment and clothes for fire-fighting personnel and workers in the areas of safety, paint industry technology, detergents and environmental standards. It also covers the standard specifications of some plastic products, shoes, leather products and school bags.
Abdullah Al Maeeni, Director-General of the Emirates Authority for Standardization and Metrology, ESMA, said that the drafts will be submitted at the next meeting of the Technical Council and the Ministerial Council of the GCC Standardization Organization.
The new standards will help improve the level of quality and safety of the covered products, facilitate commercial exchange between GCC countries and other countries, increase the competitiveness of GCC products in global markets, and protect GCC citizens, he added.
Al Maeeni noted that they drafted plans and programs to develop GCC standard specifications, to fulfil the aspirations and national strategic plans of the UAE and other GCC countries.
Saudi Arabia to levy 15% VAT on goods imported via online platforms
Saudi Arabia on Sunday (28 June) said it will levy 15 per cent value-added tax (VAT) on products bought through online platforms outside the kingdom.
The Saudi customs authority said in a tweet that this new rule will be applicable to all those products shipped on or after July 1, 2020.
On May 11, Riyadh had announced increasing VAT three-fold from five per cent to 15 per cent with effect from Wednesday, July 1. The kingdom would also suspend cost of living allowance from next month in order to shore up state finances, which have been battered by low oil prices and the coronavirus. The revised higher VAT rates will be applicable to all supplies of taxable goods and services in the country.
Saudi Arabia implemented five per cent VAT from January 2018 as part of wider GCC framework. The UAE, however, reiterated last month that it has no plans to hike VAT for now.
Anurag Chaturvedi, managing partner, Chartered House Tax Consultancy, explained that all imports on or after July 1 shall be subject to 15 per cent VAT.
“In case the online order placed before June 30, 2020 is delivered to the buyer after June 30, then 15 per cent VAT will apply on the selling transaction, whereas the seller should issue an additional tax invoice pertaining to the difference of the applicable tax due,” said Chaturvedi.
He added that e-commerce companies should ensure to collect additional 10 per cent from the buyer if the products will be delivered to the buyer on or after July 1, 2020 because they have to pay 15 per cent VAT at the time of custom clearance of the goods.
No new taxes on consumer goods purchased online, in shops: Finance Minister of Egypt
No new taxes will be imposed on consumer goods purchased online or via traditional means of sale, Minister of Finance Mohamed Maait said on Wednesday (24 June).
The minister explained that the goods sold through online platforms based in Egypt, such as souq.com or Jumia, are currently subject to Egypt’s VAT directly collected by the Egyptian Tax Authority. Those companies not located in Egypt, such as eBay and Amazon, also pay VAT but to the Egyptian Customs Authority.
Maait said that a proposed amendment to the VAT Law only covers changes to tax collection methods from non-resident companies to be carried directly by the Egyptian Tax Authority. This particular amendment has been put in place to ensure the effectiveness and speed of collection.
Other proposed amendments to the VAT Law include reforms to the collection and supply of taxes due on non-resident companies conducting business inside Egypt.
This would take place through a simplified registration and collection system in place of the current system based on the appointment of a legal representative. The previous system has, over the years, proven ineffective.
Maait noted that the new simplified registration system was drafted in line with global standards and the requirements of foreign companies, and is consistent with e-commerce applications.