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Monday, 19 April 2021

Your office rent won’t be hit with VAT

Office + commercial spaces aren’t going to be subject to 14% VAT: Proposed amendments to the VAT Act would impose a 1% schedule tax on the rent or purchase of commercial and administrative property — meaning your office or factory won’t be subject to the full 14% VAT as was previously reported in the local press, the Tax Authority said in a statement. The authority’s clarification came months after property developers were up in arms over reported plans to impose VAT on non-residential properties, saying businesses are already suffering from the repercussions of the pandemic and will not be able to bear the additional costs.

We’re still waiting for word on a sugar tax as well as taxes on advertising: The amendments, which earned sign-off from the cabinet’s economic committee in June, would replace the 5% schedule tax on crackers and sweet pastries with the standard 14% VAT rate, but industry giants are pushing back on the tax The amendments would also subject most commercial advertising to the tax but scrap the 20% stamp tax on ads — and institute VAT drawbacks for tourists.

The timeline: The Tax Authority’s statement yesterday didn’t clarify where the bill currently stands, saying only that the House of Representatives will discuss it. The Finance Ministry has been holding public consultations on the proposed amendments with several industry players before shipping the bill to the House for discussion “in a few weeks,” House Planning and Budgeting Committee Undersecretary Mostafa Salem told us earlier this month.

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