Indirect Tax
Announcement of VAT Increase in South Africa in 2025 and 2026
Excerpts from various sources
The South African Finance Minister has announced a phased increment in the country’s VAT rate to address fiscal challenges and funding essential social programs. Effective 1 May 2025, the VAT rate will increase by 0.5%, raising the current rate from 15% to 15.5%. A further increase of 0.5% is scheduled for 1 April 2026, bringing the VAT rate to 16%.
Singapore Implements the GST InvoiceNow Requirement
Excerpts from various sources
Starting 1 November 2025, all newly incorporated companies that register for GST voluntarily will be required to transmit their invoice data directly to the Inland Revenue Authority of Singapore (IRAS) using the InvoiceNow-Ready Solutions through the InvoiceNow network.
The implementation timeline is as follows:
- From 1 November 2025: Mandatory for newly incorporated companies applying for GST registration voluntarily within 6 months of incorporation.
- From 1 April 2026: Mandatory for all new voluntary GST registrants, irrespective of date of incorporation.
A soft launch for early adopters will begin on 1 May 2025.
Transfer Pricing
UAE Transfer Pricing: Key Regulations and Advance Pricing Agreement (APA) Framework Updates
Organization for Economic Co-operation and Development (OECD) TP guidance on Dispute Resolution Mechanism: In July 2013, OECD published an Action Plan on Base Erosion and Profit Shifting (BEPS). This set out 15 BEPS actions with an intention to equip governments with the domestic and international instruments to ensure that profits are taxed where economic activity and value creation take place. These tools help to address the specific tax challenges arising from the digitalization of the economy and they give businesses greater certainty by reducing disputes over the application of international tax rules and standardizing compliance requirements. To address tax avoidance and enhance dispute resolution, OECD’s BEPS Action Plan 14 introduced a minimum standard for resolving treaty-related tax disputes through the Mutual Agreement Procedure (MAP). This framework ensures timely, efficient, and effective resolution of tax disputes while fostering collaboration between tax authorities.
Chapter IV of the OECD TP Guidelines further explores Safe Harbour Rules and APAs as alternative dispute resolution mechanisms.
Introduction to APA
An APA is a formal arrangement between a taxpayer and one or more tax authorities, typically lasting multiple years that establishes the pricing methodology for transactions between related entities. By offering a structured framework, APAs help resolve transfer pricing issues proactively, reducing the likelihood of disputes and ensuring compliance with tax regulations.
APAs provide taxpayers and competent authorities with “advance” tax certainty, ensuring clarity on the tax treatment of covered transactions over a specified period. By addressing transfer pricing issues in advance, APAs complement traditional administrative, judicial, and treatybased dispute resolution mechanisms by preventing disputes before they arise.
The OECD TP Guidelines outline three primary types of APAs
- Unilateral APAs
- Bilateral APAs (BAPAs)
- Multilateral APAs
Implementation of APA in UAE
On 11 June 2024, the UAE Federal Tax Authority (FTA) issued Decision No. 4 of 2024, laying the groundwork for the implementation of an APA framework under the UAE Corporate Tax and Transfer Pricing Law (CT Law). This decision enables taxpayers to apply for an APA concerning proposed or existing transactions and arrangements. It further clarifies that the start date for accepting APA applications, along with the procedures for submission and issuance, will be announced by the FTA in the fourth quarter of 2024.
Building on this development, the FTA issued Decision No. 2 of 2025 on 19 February 2025, introducing key updates on tax clarifications and the APA framework’s implementation. The decision, effective from 1 March 2025, establishes a general framework for the APA mechanism, offering taxpayers greater clarity and predictability in transfer pricing arrangements.
In alignment with Article 59 of the Federal Decree-Law No. 47 of 2022, the decision formally outlines the FTA’s approach to APAs. The taxpayers can now apply for unilateral APAs, with applications being accepted from the fourth quarter of 2025. The timeline for submitting other types of APAs, potentially including BAPAs, will be announced subsequently. While unilateral APAs provide certainty on domestic tax treatment, BAPAs are generally preferred by multi-national businesses as they help reduce the risk of double taxation by ensuring agreement between tax jurisdictions.
The UAE FTA is expected to issue further guidance on key aspects of the APA framework, including eligibility criteria (thresholds), entry requirements, financial periods covered (including clarity on rollback provisions), and other compliance obligations detailing the entire process while opting for APAs.
As the UAE TP Guidelines largely align with the OECD TP Guidelines, it is anticipated that the UAE's APA program will also follow the principles outlined in Chapter IV of the OECD TP Guidelines.
Implications of the UAE APA Framework
Globally, APAs have been instrumental in mitigating tax disputes and TP litigation, providing taxpayers with a structured framework for achieving tax certainty and compliance efficiency.
The introduction of the APA framework in the UAE is expected to minimize tax risks and disputes by securing pre-approved transfer pricing methodologies, enhancing tax certainty for taxpayers engaged in complex intercompany transactions, and reducing compliance burdens and administrative costs. Additionally, by aligning with international tax best practices, the APA framework will contribute to strengthening the UAE’s investment attractiveness and fostering a stable and transparent tax environment.
Conclusion
Taxpayers who intend to apply for an APA will be required to maintain robust TP policy along with robust TP documentation that aligns with their commercial substance and backs the actual business practice, prepare intercompany agreement that encapsulates the TP policy and decide on the way forward of information exchange while dealing with the APA authorities.