Global Markets Update:
As we reach the tail end of the summer, Europe had a plethora of data releases, German Retail Sales, French Preliminary CPI and Italian Monthly Unemployment Rate all came in under forecast. In the US, hopes of a US interest rise in December were abated after soft inflation figures were released. Rising incomes and marginally better-than-expected employment data suggested the economy is on a sound footing. The world economy was given a slight boost this morning as manufacturing power house China’s PMI Manufacturing figures came in at 51.6, beating both estimates of 51 and last month’s 51.1. Being the second biggest economy in the world, many investors were concerned when China’s figures went through a spell of missing estimates. Investors have continued to take hedge positions (insurance against the various events that can adversely affect risk asset prices). This was particularly poignant in light of North Korea’s H-Bomb test.
Saudi Arabia revealed that the 5% VAT will be applied on private educational institutions; tax will be applied to tuition fees as well as students’ transport costs. Separately, the General Authority of Zakat and Tax has launched a VAT Website (https://vat.gov.sa/en/) and a helpline number.
Saudi Arabia announced that health and education sectors will be open to full foreign ownership, without disclosing when this would come into effect. In the health sector, the ministry will “just be a regulator and not a service provider”, opening up USD 180bn of investment opportunities.
A national plan for SMEs – including measures to support and finance SMEs projects – in Saudi Arabia will be finalised by end of this year, disclosed the governor of the Small and Medium Enterprises General Authority (Monshaat). He also added that women owned 38% of the SMEs established last year.
Real estate market liquidity in Kuwait increased by 7% mom and 26.8% YoY to KWD 190.2mn in Jul, disclosed the Ministry of Justice – Real Estate Registration and Authentications Department. According to the National Bank of Kuwait, total sales up by 12% YoY to KWD 161.5mn, as residential sales were up 43% from a year ago.
The UAE’s Tax Authority has launched a new website for businesses to understand excise taxes and VAT (https://www.tax.gov.ae/index.aspx). Legislation relating to VAT is expected to be published by end-Sep while business owners will be able to pre-register their companies for excise tax and VAT on the website from mid-Sep.
In UAE, VAT on schools and kindergartens will be imposed at a zero percent rate i.e. this allows schools to reclaim VAT paid for business services and costs.
Non-oil bilateral trade between the UAE and the US increased touching AED 111.1bn or USD 30.3bn as of end-2016 compared to USD 27.8bn in 2015, according to the Minister of Economy. He also noted that a total of 305 US companies were operational in the country until 2015 (excluding free-zone firms), in addition to 676 trade agencies and 38,290 brands.
Emirati women investors in the Abu Dhabi Securities Exchange (ADX) touched 219k in H1 this year, with the market value of their shares at AED 18.8bn.
Passenger traffic at the Dubai International Airport grew by 5.9% YoY to 8.07mn in Jul – the busiest month on record, slightly higher than the previous record of 8.04mn passengers this Jan. Meanwhile, the number of flight movements – landings and take-offs – declined 4.7% to 34,181.
Abu Dhabi invited companies to construct a residential project for low-income families and bachelors: bidding companies will have to submit a tender bid of AED 500,000.
The Female Fusion VAT panel, held 28 August 2017 gathered together around 60 female business owners to deliver the latest information on UAE VAT. The very first session in this panel series addressed questions on VAT emailed in by female business owners. VAT will be implemented in the UAE on 1 January 2018, with online VAT registration opening mid-September.The panel was held at the brand new premises of innovation centre In5 in Knowledge Village, and the event kicked off with a presentation by The Counting House Founder, Lisa Martin, who said that it is assumed that the UAE VAT laws will follow a similar structure to the UK's VAT laws. Panellists for the event were Lisa Martin, Simran Samtani, Co-Founder & Senior Partner with Xcel Accounting, Bianca Gracias, General Counsel, Suits Advisors, and Shannon Rogers, Associate, Bird & Bird.
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Global Markets Update: