Tax reforms will improve UAE’s investment status
Credit: Khaleej Times
Once the UAE fully implements the BEPS minimum standard, it will become a very good location, say tax experts
The UAE’s position as an attractive destination for foreign investment will substantially improve once it fully implements minimum standards for base erosion and profit shifting (BEPS), tax analysts said on Saturday.
“Once the UAE fully implements the BEPS minimum standard, it will become a very good location. It already is a regional hub as many have set up a presence here for genuine economic reasons. The implementation of minimum 4 BEPS standards will put the UAE in the right framework, not just within the GCC but also internationally,” said Ashok Hariharan, partner and head of tax, KPMG – Lower Gulf.
He pointed out that BEPS will improve increased tax governance as more Gulf countries will begin introducing requirements to disclose more information in tax returns and financial statements.
Hariharan revealed that regulations transfer pricing – which means the price at which units of a company transact with each other, such as the trade of supplies or labour among themselves – are imminent in Saudi Arabia and Qatar.
The UAE and Bahrain joined the OECD Inclusive Framework on Base Erosion and Profit Shifting in May 2018. Through joining the framework, the countries commit to implementing the 4 BEPS minimum standards – countering harmful tax practices; countering tax treaty abuse; country-by-country reporting at a minimum; and improving dispute resolution mechanisms.
Hariharan was speaking about the progress to date and the impact of BEPS on the GCC at the International Taxation Summit organised by the Institute of Chartered Accountants of India – Dubai chapter.
Anuj Kapoor, co-lead M&A and international tax advisory services, KPMG – Lower Gulf; Surandar Jesrani, managing partner and CEO of MMJS Tax Consultancy; Manoj Shah, founding partner of Shah & Modi Chartered Accountants; and Paresh Shah, founding partner of PP Shah & Associates, Mumbai; addressed the ICAI members on taxation issues.
“Today, because all countries have transfer pricing regulations and BEPS is focusing on more formal transfer pricing goods, many countries in the GCC will also follow, so firms have to provide further information,” Hariharan said.