Your Monthly Tax Update for the GCC region
As we move into the summer months, several notable tax developments have emerged across the Gulf region, with particularly significant activity in the UAE. In addition to new guidance and clarifications on specific areas of taxation, a number of interesting trends have also become apparent that UAE businesses should take into account. This month’s Gulf Tax Insights provides you with insights on the following topics:
- The UAE Federal Tax Authority (FTA) has updated its Family Foundations guide, introducing new guidance on asset transfers, Family Offices and structural changes, and clarifying key conditions for tax transparency treatment. The updated guidance is a welcome development as it provides greater certainty regarding the operation and tax treatment of Family Foundations and further strengthens the UAE’s position as an attractive jurisdiction for private wealth structuring, succession planning and long-term wealth preservation.
- The UAE is strengthening its e-invoicing compliance framework which will require in-scope businesses to keep proper records and take responsibility for the relevant compliance under the e-invoicing regulations.
- The UAE FTA has issued a Public Clarification on what should be understood under Connected Persons of a UAE taxpayer. Because of the importance of this definition for purposes of UAE Transfer Pricing and Corporate Tax, the Public Clarification provides useful guidance and examples on what should be considered as Directors and Officers of taxpayers in the UAE.
- The UAE FTA has enabled Pillar Two registration on the EmaraTax portal. As a result, UAE Constituent Entities of in-scope MNE groups should take steps to register and prepare for compliance with the UAE’s Qualified Domestic Minimum Top-up Tax framework.
- In the UAE, increased audit activity from the FTA around economic substance, combined with external disruptions affecting distribution models, means that businesses benefiting from the 0% Free Zone Tax Regime must continuously ensure alignment between their activities, structure, and operations, and be able to evidence this clearly.
We hope this month’s edition of Gulf Tax Insights is helpful, and we look forward to seeing you soon.
