Although summer is well on its way in the Gulf, there have been no signs of a summer slowdown for tax professionals in the GCC, particularly in the United Arab Emirates (UAE), where businesses are busy preparing for the implementation of Corporate Income Tax (CIT). Whilst the regulations have already come into effect for certain businesses, many free zone companies are still evaluating their tax position under the CIT regime in light of the regulations that were published last month. It is worth noting that the UAE Ministry of Finance announced a public consultation on 19 July 2023 with the aim of gathering views from interested parties on the proposed framework for the classification of Qualifying Activities and Excluded Activities for Free Zone companies. Please refer to our alert on this topic if you would like to provide input on the public consultation.
Those of you who are familiar with the UAE CIT Law and its implementing decisions are aware of the pivotal role of various thresholds in determining eligibility for benefits, incentives, or reliefs. The UAE CIT regime also sets out various compliance obligations which are applicable once taxpayers surpass specified thresholds. In this month's edition, we have included an overview of the key thresholds under the UAE CIT regime. Familiarity with these thresholds will allow for effective tax planning and compliance with the regulations.
In Saudi Arabia, ZATCA published an updated guideline on tax rulings. Through the tax ruling services, applicants can request an opinion from ZATCA on matters of uncertainty related to their transactions or arrangements in the Kingdom. An important development is that from now on rulings now be binding on ZATCA. This enhanced legal certainty significantly increases the value of obtaining a ruling from ZATCA.
From an international tax perspective, the GCC Member States continue to expand their treaty networks both within and beyond the GCC.
We hope you enjoy this month's newsletter, and as always, your comments and feedback are highly appreciated.
