With the aim to strengthen the international position and enhance its cooperation with the international community with regards to relevant changes to improve tax transparency and tax regime, the U.A.E. has joined the OECD Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) and has committed to implementing the 15 BEPS measures out which following 4 BEPS minimum standards need to be implemented in the immediate to short term span:
- Action 5: Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance
- Action 6: Preventing the Granting of Treaty Benefits in Inappropriate Circumstances
- Action 13: Transfer Pricing Documentation and Country-by-Country Reporting (“CbCR”)
- Action 14: Making Dispute Resolution Mechanisms More Effective
- Rulings relating to preferential tax regimes, to ensure that taxpayers benefitting from a preferential tax regime have “substantial Economic activity” in the relevant jurisdiction Note: Current tax framework in the UAE does not have an IP-related preferential regime, therefore no immediate action required.
- Unilateral advance pricing agreements or other cross-border unilateral rulings in respect of transfer pricing and Cross-border rulings providing for a downward adjustment of taxable profits, to ensure that there are no mismatches in how two ends of a transaction are priced and no profits go untaxed resulting in base erosion or profit shifting.
- Permanent establishment (PE) rulings, to ensure that information about the non-existence of or attribution of profit to a PE in the country issuing the ruling should be used in assessing the appropriate global profit of the entity.
- Related party conduit rulings, to ensure that information on the arrangement/structuring including transparent entities may be used in assessing the appropriate profit of the entity. And.
- Any other ruling agreed by the Forum on Harmful Tax Practices.
- Local file
- Master File
- CbC Reporting of multinationals
Tag: BEPS, OCED, TAX