Optimizing Tax Management

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Get future ready now. To deal with the increasingly digitized world economies, the governments, global regulators, and other stakeholders are rapidly catching up with evolving technologies, transactional and other business models, and may even be ahead of commercial organizations in embracing them. Nexdigm is well equipped to guide the digital transformation of your firm's tax function.

Transfer Pricing & International Tax

Transfer Pricing

The United Arab Emirates (UAE) currently has no specific transfer pricing regulations in place. However, In response to UAE’s commitment to align with the OECD objectives, UAE has issued Country-by-Country Reporting (CbCR) regulations which are effective for financial years beginning on 1 January 2019.

UAE tax resident entities that are members of multinational groups having annual consolidated revenues of AED 3.15 billion (approximately USD 860 million) or more in the preceding year are required to comply with the CbCR filing requirements. UAE-resident Ultimate Parent Entities (UPE) must submit a UAE CbCR notification by the last day of the financial year and submit a CbC Report no later than 12 months after the end of the financial year.

In addition to UAE, the remaining Gulf Cooperation Council (GCC) countries, especially Bahrain, Oman, Qatar, Saudi Arabia (KSA) are also considering global developments on tax transparency-related matters. At present, except Kuwait, all GCC countries have signed the BEPS (Base Erosion and Profit Shifting) Framework and are committed to implementing minimum standards to implement tax transparency measures.

With the introduction of fully-fledged TP regulations in countries like KSA and Qatar, we have seen a major shift in the tax landscape among multinationals operating in the GCC region.

While KSA was the first GCC country to adopt the three-tiered documentation approach, Qatar also recently adopted this approach with other GCC countries also expected to issue detailed requirements in the near future.

International Tax

There is no Income Tax and Corporate Tax in UAE (except taxes levied on oil companies and foreign banks). However, in 2018, UAE became the 116th country to join the Inclusive Framework on BEPS (Base Erosion and Profit Shifting). This has led to various tax reforms within UAE to align the tax policies with BEPS and to shed its image as a tax haven.

Additionally, UAE is also a part of the following international reporting standards:

  • FATCA (Foreign Account Tax Compliance Act) introduced by USA
  • CRS (Common Reporting Standard) introduced by OECD (Organisation for Economic Co-operation and Development)

Therefore, it becomes essential that multinational entities which undertake cross-border activities in the UAE to determine the tax outflow and compliance requirements of UAE as well as foreign jurisdictions.

Nexdigm provides a range of international tax services wherein we cater to all your tax matters and depending on your business needs, even provide an in-house tax team. Our services include independent business advisory, business structuring, as well as assistance in tax and regulatory compliances. We ensure you stay compliant with all regulatory and tax matters in the UAE with greater accountability that comes from our decades of experience.

Our International Tax Services in UAE include:

Corporate Advisory and Consultancy

We consult businesses from a global tax and regulatory perspective, specifically keeping in mind the BEPS standards. With our unwavering focus on the client’s business objective, we don’t just come up with solutions, we help implement them.

Investment Structuring

We help in setting up tax-efficient structures and analyzing alternative investment jurisdictions. We assist international clients at various stages of investment achieve their macro objectives.

Impact of Digital Taxation in various jurisdiction

OECD is in the advance stages of implementing Pillar I and Pillar II inclusive framework for challenges arising out of digital transaction across the globe. The impact of the same could be significant to companies having business in various jurisdiction without any presence. We assist in evaluating the impact of the same to optimize structures.

Permanent Establishment (PE) Exposures

We identify the potential PE exposures to avoid unnecessary tax outflow within any jurisdiction. Our portfolio includes working closely with clients to build business models that are PE proof. We provide holistic compliance services, which include maintaining books of accounts and undertaking required compliances.

A.K. Viswanathan Managing Director – Direct Tax and Regulatory, Transfer Pricing, Transaction Advisory Services and Technology Risk Advisory

With over three decades of experience, A.K. Viswanathan (Vis) oversees the Direct Tax and Regulatory, Transfer Pricing, Transaction Advisory Services, and Technology Risk Advisory, where his primary role is to…

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Reach out to us at ThinkNext@nexdigm.com