Page 35 - Focus Group

Value Added Tax: The UAE is an integral part of international competency in compliance with
group countries closely connected through “The the international taxation as it is an unavoidable
Economic Agreement between the GCC requirement to be at the top.

States” and “The GCC Customs Union”. More regulatory requirements are expected in the
They mutually agreed to the GCC VAT UAE, in the near future bringing a lot of opportunities
Agreement to levy Value Added Tax (VAT) for the Chartered Accountants and Tax Professionals
at a nominal rate of

5%.

VAT is an indirect tax
charged at each stage of
supply chain. It is structed
in such a way that the
ultimate consumers or
you may say the end users
is responsible to pay VAT,
the cost is eventually
born by the residents in
the region.

International Taxation:
The UAE has around
100 agreements in place
with other nations to
avoid double taxation on
investments overseas.
In 2017, the UAE
was identified as a
non-cooperative tax
jurisdiction and the
European Union had
asserted then, that the
UAE was blacklisted along
with 17 other countries failing to meet the agreed to practice. There is also a possibility of having more
tax governance. But, the UAE’s commitment to tax system in the region. What we have witnessed
meet the international standards of taxation paved so far is itself an indication.
their way to the grey-list along with seven other The future of tax and accountancy profession in the
countries. UAE is cheerful.

Hence, the UAE introduced Economic Substance
Regulations (ESR) & Country by Country Reporting
(CbCR) respecting its commitment as a member
of the OECD Inclusive Framework on BEPS Action
plans. This stemmed the UAE to position themselves
in good code of conduct for International Taxation.
The reporting period for both the standards apply
with effect from the financial year 2019.
What’s next? Is UAE going to implement any CA Manu Palerichal
other tax system or not?
Disclaimer:
The UAE’s positioning in the world is crystal clear, This article and/or write ups and/or any of its content shall not be treated as opinion and/
the country’s foremost vision is to adhere to the or advice in any circumstances of the author(s) and/ or the Chapter. Reader’s to apply their
best judgement in the best interest of their requirement and should seek a formal opinion
on any issue.

The Institute of Chartered Accountants of India (Dubai) Chapter NPIO TAX JOURNAL 2020 35