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The Ultimate Guide to Accounting, Compliance, And Tax For Expo 2020 Participants

As the first mega-event to take place after the outbreak of COVID-19, all eyes will be on Dubai as it hosts Expo 2020 in October 2021. As investors’ confidence is likely to grow as a result of the success of Expo 2020, the world is hoping for a successful event. A compelling concern arises in regard to the accounting, vat, and compliance requirements of Expo 2020 participants given that nearly 190 countries are due to participate.

In order to be compliant with UAE accounting, anti-money laundering, Economic Substance Regulation, Ultimate Beneficial Ownership, and VAT requirements, Expo participants must have robust accounting support. In Dubai, foreign participants can hire the best accounting firms to assist with the documentation process, so they need not worry about competent human resources.

Accounting Requirement for Expo Participants

As a result of the various tax and reporting requirements faced by Expo 2020 participants, those who participate must maintain accurate records of their transactions. A variety of regulatory authorities in the United Arab Emirates will need to be notified of the transactional and financial details of the event at various stages. Expo participants may struggle to find adequate resources to keep track of records, but by obtaining the services of one of the leading accounting firms in Dubai, the process will be made easier.

In order to accurately categorize and account for the expenses, participants require an expert accountant’s assistance. Expo 2020 participants must categorize their expenses in order to determine their eligibility for VAT refunds if they claim the expenses incurred. By virtue of Cabinet Decision No. (1) of 2019, participants may only claim refunds for expenses relating to specific categories. A professional accounting firm in Dubai will provide the participants with the accounting support needed to meet all the requirements.

UAE Compliance for Expo Participants

The UAE has compliance regulations, which are being enforced under the authority of the federal and state governments. Expo participants are required to comply with these regulations. Compliance with UAE regulations is crucial for participating companies. There are three major areas of UAE compliance:

Economic Substance Regulation (ESR)

Onshore companies must maintain an adequate presence in the UAE according to the Economic Substance Regulation, which was introduced in August 2020. A test for economic substance must be performed by UAE companies performing relevant activities onshore to ensure this. It can be achieved in several ways:

  • In the UAE, licensing and related activities are administered and managed
  • Core Income Generating Activities (CIGA) are carried out in the UAE
  • The licensee has sufficient people, facilities, and expenses in the United Arab Emirates

Ultimate Beneficial Ownership (UBO)

The Cabinet Resolution on Ultimate Beneficial Ownership promotes financial transparency in the UAE by requiring businesses to disclose information regarding their beneficial owners. Significant shareholders and nominee directors are considered beneficial owners in this case. Individuals with at least 25% ownership, control, or voting rights in a company are considered UBOs. 

All companies that are licensed in the UAE, except those owned by the local or federal government, must make UBO declarations.

Anti-Money Laundering (AML)

Increasingly, the UAE is becoming more strict in its anti-money laundering and counter-terrorism financing (CTF) regulations. It strives continually to complete its vision and goal of establishing itself as a global hub of international business and pledges to uphold the highest standards possible in all segments. 

By introducing a new AML Law and Cabinet Decision No. (10) of 2019 on its implementation of Federal Decree No. 20 of 2018 on combatting the financing of terrorism and illegal organizations against money laundering (AML By-law), AML/CTF measures in the UAE have been streamlined and a unified legal framework has been applied across the Emirates, the Commercial Free Zones (CFZs) and the Financial Free Zones (FFZs).

Article 3 of the Cabinet Resolution No. 10 of 2019 concerning the Implementation of the AML Law outlines the definition of Designated Non-Financial Businesses and Professionals (DNFBPs). It includes a wide range of activities and sectors such as real estate sales and purchases, precious metals and precious stone dealers, trust and company service providers, auditors, accountants, and lawyers.

VAT Refund Scheme For Expo 2020 Participants

For participating countries and organizations in Expo 2020 Dubai, the Federal Tax Authority (FTA) has issued Cabinet Decision No. 1 of 2020 regarding a refund for VAT on purchases of goods and services. As a result of this Cabinet Decision, Cabinet Decision no. 1 of 2019 is no longer valid, a Cabinet Decision that the FTA issued in relation to a VAT refund for participants at Expo 2020. A Cabinet Decision clarifies to which participants a VAT refund will be given, as well as to which expenses.

The pavilions are primarily constructed, installed, decorated, and operated by participants, therefore, all expenses incurred by participants specifically relate to the pavilions. To reduce costs and create incentives for Official Participants, UAE authorities have established a Special Refund Scheme to reimburse VAT paid on items and services related to Expo 2020 Dubai.

Procedures and eligibility for VAT refunds

A separate program for refunding VAT to Participants has been implemented by the UAE government. Input tax incurred on goods and services imported for Expo 2020 may be refunded to Participants, along with direct expenses incurred.

For expenses directly related to Expo 2020, Participants can request a VAT refund, for example:

  • VAT on the construction, installation, modification, breakdown, and dismantling of the exhibition area.
  • The VAT levied on goods and services at the Expo 2020 Dubai site related to operation, presentation, and events.
  • A VAT refund may be requested by the official participant’s office for any expenses relating to any operations, services or activities conducted in connection with his or her participation in Expo 2020 Dubai, regardless of whether those activities are conducted within or outside the boundaries of Expo 2020 Dubai.
  • Expenses for the import of Goods to be used personally by the Official Participant’s Section Commissioner-General, Section Staff, and Beneficiaries.
  • The Official Participant must claim VAT on all Goods and Services incurred by the office that relate to its actual operations, provided that the value of each Good or Service should not be less than AED 200;

Unregistered participants are required to approach the Bureau Expo 2020 Dubai (the Bureau) to claim their VAT refunds. For VAT registered participants, the Federal Tax Authority (fta) is responsible for the refund. The Bureau requires that a Certificate of Refund Entitlement (CRE) be obtained in order to receive a refund.

What can CZ Tax & Accounting do for you?

Taking part in Expo 2020 Dubai is made seamless when you have our experienced and qualified team behind you. In order to ensure compliance with the UAE AML laws and VAT laws, our company can help you with all of your administrative tasks and allow you to recoup your VAT costs from expenses incurred there. Here are some of the services we can provide you, if necessary: 

  • Make sure you meet your VAT obligations 
  • Registering for VAT 
  • Securing the approval of CRE and Bureau 
  • Periodical refunds and VAT returns are prepared as per compliance requirements 
  • Follow up and interaction with the FTA/Bureau

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