Regulation of the submission of reports by multi-national companies in UAE

Jay Krishnan & Sumesh Krishna

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INTRODUCTION

The United Arab Emirates (UAE) has introduced Country-by-Country (CbC) Reporting (CbCR) requirements, that will be applicable to businesses that have a legal entity or branch in the country and are members of a multinational enterprise (MNE) group with consolidated annual turnover of more than AED 3.15 billion.

DEFNITIONS

MNE Group: Any Group that;

  1. Includes two or more enterprises the tax residence for which is in different jurisdictions or includes an enterprise that is resident for tax purposes in one jurisdiction and is subject to tax with respect to the business carried out through a permanent establishment in another jurisdiction.
  2. and having total consolidated group revenue equal to or more than AED 3,150,000,000 (three billion one hundred fifty million dirham) during the Fiscal Year immediately preceding the Reporting Fiscal Year as reflected in its Consolidated Financial Statements for such preceding Fiscal Year.

Constituent Entity: means any of the following;

  1. Any separate business unit of an MNE Group that is included in the Consolidated Financial Statements of the MNE Group for financial reporting preparation purposes or would be so included if equity interests in such business unit of an MNE Group were traded on a public securities exchange.
  2. Any business unit that is excluded from the MNE Group’s Consolidated Financial Statements solely on size or materiality grounds.
  3. Any permanent establishment of any separate business unit of the MNE Group, provided the business unit prepares a separate financial statement for such permanent establishment for financial reporting preparation, regulatory, tax reporting, or internal management control purposes.

Filing regulations

Entities that come under the new rule will have to take necessary actions to meet the requirements and review the impact of these rules on the MNE group’s reporting and notification requirements in other countries. The CbC report aims to make it easier for tax authorities to assess high-level risks related to transfer pricing and BEPS for MNE groups.

The Ministerial Resolution No. 32 of 2019 which introduces CbCR rules for MNE groups operating in the UAE, was introduced by the country on 30th April 2019.

The CbC reports include;

  • Financial information related to the amount of revenues
  • Profits/losses before income tax
  • Income tax paid
  • Income tax accrued
  • Stated capital
  • Accumulated earnings
  • Number of employees
  • Tangible assets other than non-cash or cash-equivalent assets,
  • Details about business activities conducted and other disclosures and explanations provided by the MNE, with respect to each jurisdiction in which the MNE operates

A Constituent Entity which is not the Ultimate Parent Entity of an MNE Group shall file Report with the Competent Authority with respect to the Reporting Fiscal Year of an MNE Group of which it is a Constituent Entity, on or before the date specified, if such Entity is resident for tax purposes in the State and one of the following conditions in respect thereof applies:

  1. The Ultimate Parent Entity of the MNE Group is not obligated to file a Report in its jurisdiction of tax residence.
  2. The jurisdiction in which the Ultimate Parent Entity is resident for tax purposes has a current International Agreement to which the State is a party but does not have a Qualifying Competent Authority Agreement in effect to which the State is a party for filing the Report for the Reporting Fiscal Year.
  3. There has been a Systemic Failure of the jurisdiction of tax residence of the Ultimate Parent Entity that has been notified by the Competent Authority to the Constituent Entity resident for tax purposes in the State.

Penalties

An administrative penalty shall be imposed on the Reporting Entity which fails to comply with the obligations set out in this Resolution as follows:

  1. Where a Reporting Entity fails to retain the documentation and information required to be collected in the course of meeting its reporting obligations under this Resolution for a minimum period of five (5) years after the date of reporting to the Competent Authority, the Reporting Entity shall be subject to a penalty of one hundred thousand dirham (AED 100,000);
  2. Where a Reporting Entity fails to provide the Competent Authority with any information requested in accordance with this Resolution, the Reporting Entity shall be subject to a penalty of one hundred thousand dirham (AED 100,000).
  3. One million dirhams (AED 1,000,000); and ten thousand dirham (AED 10,000) for every day during which the failure continues to a maximum of two hundred and fifty thousand dirhams (AED 250,000). where a Reporting Entity fails to report the information required to be reported under this Resolution on the required Reporting Date or fails to notify the Competent Authority on or before the required reporting date of the intention to file a Report in respect of a certain accounting period.
  4. The Reporting Entity shall be subject to a minimum penalty of fifty thousand dirhams (AED 50,000) and a maximum penalty of five hundred thousand dirhams (AED 500,000) if the Reporting Entity fails to report the information required to be reported under this Resolution in a complete and accurate manner.

Deadline

The CbC report must be submitted within 12 months of the end of the reporting period. Accordingly, for the financial years commencing on 1 January 2019, the CbC report must be submitted by 31 December 2020.

Jay Krishnan- Business Consultant

Jay Krishnan
Partner
jk@hlbhamt.com

Sumesh Krishna- Audit Department

Sumesh Krishna Partner
sumesh@hlbhamt.com

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Economic Substance Regulations in UAE

Jay Krishnan & Sumesh Krishna

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The UAE Cabinet recently issued the Cabinet of Ministers Resolution No.31 of 2019, that requires all in-scope UAE entities to maintain an economic substance. This will be applicable to onshore and free zone companies that engage in any of the below mentioned “Relevant Activities”;

  • Banking Businesses as licensed in the State, including Banking Businesses licensed in a Free Zone or a Financial Free Zone.
  • Insurance Businesses as licensed in the State, including Insurance Businesses licensed in a Free Zone or a Financial Free Zone.
  • Investment Fund Management Businesses as licensed in the State, including Investment Fund Management Businesses licensed in a Free Zone or a Financial Free Zone.
  • Lease-Finance Businesses as licensed in the State, including Lease-Finance Businesses licensed in a Free Zone or a Financial Free Zone.
  • Headquarters Businesses as licensed in the State, including Headquarters Businesses licensed in a Free Zone or a Financial Free Zone.
  • Shipping Businesses as licensed in the State, including Shipping Businesses licensed in a Free Zone or a Financial Free Zone.
  • Holding Company Businesses as licensed in the State, including Holding Businesses licensed in a Free Zone or a Financial Free Zone.
  • Intellectual Property Businesses as licensed in the State, including Intellectual Property Businesses licensed in a Free Zone or a Financial Free Zone.
  • Distribution and Service Centers Businesses as licensed in the State, including Distribution and Service Centres Businesses licensed in a Free Zone or a Free Zone.

Activities that must be conducted by a licensee in the State shall include:

In respect of Banking Business:

  1. Raising funds, managing risk including credit, currency and interest risk.
  2. Taking hedging positions.
  3. Providing loans, credit or other financial services to customers.
  4. Managing capital and preparing reports to investors or any government authority with functions relating to the supervision or regulation of such business.

In respect of insurance Business:

  1. Predicting and calculating risk.
  2. Insuring or re-insuring against risk and providing Insurance Business services to clients.
  3. Underwriting insurance and reinsurance.

In respect of Investment Fund Management Business:

  1. Taking decisions on the holding and selling of investments.
  2. Calculating risk and reserves.
  3. Taking decisions on currency or interest fluctuations and hedging positions.
  4. Preparing reports to investors or any government authority with functions relating to the supervision or regulation of such business.

In respect of Lease-Finance Business:

  1. Agreeing funding terms.
  2. Identifying and acquiring assets to be leased (in the case of leasing).
  3. Setting the terms and duration of any financing or leasing.
  4. Monitoring and revising any agreements.
  5. Managing any risks

In respect of Headquarters Business:

  1. Taking relevant management decisions.
  2. Incurring operating expenditures on behalf of group entities.
  3. Coordinating group activities

In respect of Shipping Business:

  1. Managing crew (including hiring, paying and overseeing crew members).
  2. Overhauling and maintaining ships.
  3. Overseeing and tracking shipping.
  4. Determining what goods to order and when to deliver them, organizing and overseeing voyages.

In respect of Holding Company Business, all activities related to that business; and in respect of Holding Company Business that derives income from other sources other than dividends and capital gains from its equity interest, the state Core Income-Generating Activities shall be those activities associated with the income generated.

In respect of Intellectual Property Business:

(a) where the Intellectual Property Asset is a –

  1. Patent or an asset that is similar to a patent, research and development.
  2. Non-trade intangible (including a trademark), branding, marketing and distribution.

(b) If the Relevant Activity is conducted by a Licensee that is regarded as a High Risk IP Licensee, the State Core Income-Generating Activity must include any of the following additional activities:

  1. Taking strategic decisions and managing (as well as bearing) the principal risks related to development and subsequent exploitation of the intangible asset generating income.
  2. Taking the strategic decisions and managing (as well as bearing) the principal risks relating to acquisition by third parties and subsequent exploitation and protection of the intangible asset.
  3. carrying on the ancillary trading activities through which the intangible assets are exploited leading to the generation of income from third parties.

In respect of Distribution and Service Center Business;

  1. Transporting and storing component parts, materials or goods ready for sale.
  2. Managing inventories.
  3. Taking orders.
  4. Providing consulting or other administrative services.

Requirements to meet Economic Substance Test

A Licensee meets the Economic Substance Test in relation to a Relevant Activity in the following cases:

  1. If the Licensee conducts State Core Income-Generating Activity in the State.
  2. If the Licensee is directed and managed in the State in relation to that activity, provided the Licensee’s board of directors meets in the State at an adequate frequency having regard to the amount of decision-making required at that level.
  3. Having regard to the level of Relevant Activity, if there is an adequate number of qualified full-time employees in relation to that activity who are physically present in the State (whether or not employed by the Licensee or by another entity and whether on temporary or long-term contracts), or adequate level of expenditure on outsourcing to third party service providers, whose activities, employees, expenditure, and premises are in the State; and these activities, employees, expenditures and premises are adequate for carrying out the Relevant Activity being outsourced.
  4. If there is adequate operating expenditure incurred by it in the State, or adequate level of expenditure on outsourcing to third party service providers whose activities, employees, expenditure and premises are in the State; and these activities, employees, expenditures and premises are adequate for carrying out the Relevant Activity being outsourced.
  5. If there are adequate physical assets in the State or adequate level of expenditure on outsourcing to third party service providers in the State, for the activities of the Licensee;
  6. In the case of State Core Income-Generating Activity carried out for the relevant Licensee by another entity, if it is able to monitor and control the carrying out of that activity by the other entity.

In relation to a Licensee whose activity is restricted to carrying out a Holding Company Business that derives its income from dividends and capital gains only, such Licensee meets the Economic Substance Test if it meets the following conditions:

  1. Complies with the requirement to submit any documents, records or information to the relevant Regulatory Authority in accordance with the law applicable to the Licensee in the State.
  2. Has adequate employees and premises for holding and managing the Holding Company Business.

The rule won’t be applicable to companies that come under the ownership of the government, directly or indirectly. As such, UAE sovereign investment funds and other UAE government related entities are exempted. There is still no confirmation regarding sole proprietorship and branches.

A relevant entity must report certain information regarding its relevant activities to the regulatory authority concerned (the one that issued the trade license to the entity), annually. Existing companies should have complied with the regulations by now, since the starting date was 30th April 2019. In the case of new entities, regulations must be complied with upon receiving its trade license.

If an entity fails to meet the requirements or if inaccurate information is given to the regulatory authority, annual administrative penalties of AED 10,000 to AED 300,000 will apply. If they fail to meet the requirements for consecutive years, the penalties will increase and might force the authorities to suspend, revoke or deny renewal of an entity’s license.

The UAE was added to the European Union list of non-cooperative tax jurisdictions by the European Commission and this was the reason behind the issuance of the economic substance regulations. These regulations are similar to the economic substance requirements that were recently implemented in jurisdictions that include Cayman Islands and Jersey.

Jay Krishnan- Business Consultant

Jay Krishnan
Partner
jk@hlbhamt.com

Sumesh Krishna- Audit Department

Sumesh Krishna Partner
sumesh@hlbhamt.com

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Business Packages for Women Entrepreneurs in UAE

Lavin Nalinbabu, Business Consultancy

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The Ras Al Khaimah Economic Zone is on a move to make it a women-friendly destination.  The free zone is planning to offer two new business packages (one-year and three-year), that are exclusively dedicated to women entrepreneurs.

The starting price of the package is Dh6,200, which comes with a free zone license, shared workstation and eligibility for a UAE residency visa. It also includes various other support services such as business cards.

If you are opting for the three-year business package, you will be awarded a free investor visa, worth Dh3,950. “We are very proud to launch the RAKEZ Business Women Package, which is a clear testament to our commitment of encouraging more women to achieve their entrepreneurial dreams,” says Ramy Jallad, group chief executive of RAKEZ.

Women applying for the package will be provided with eight license types to choose from. These are commercial, educational, e-commerce, general trading, individual/professional, media, service and freelancer.

RAKEZ, a free zone that houses more than 14,500 companies, has conducted women-centric events before as well. “We have used these events as platforms to get to know what challenges they are facing and what can we do to support them,” says Jallad.

Earlier RAKEZ had come up with start-up business plans for final year students and new graduates. The starting price of the package was Dh650 a month and it includes a business licence, a shared workstation and a residency visa.

RAKEZ is one of the leading free zones in the UAE, that is blessed with a strategic location connecting growing markets of Middle East, North Africa, Europe, and South and Central Asia.

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A surge in the number of licenses Renewed through Auto-renewal process

Lavin Nalinbabu, Business Consultancy

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The Business Registration and Licensing Sector’s auto renewal service has proved to be a huge success in Dubai. The increase in the number of licenses renewed via the service proves the fact. There has been an increase of 47 percent and the number stood at a whopping 73,404, during the first half of 2019.

Among these licenses renewed, 73.2 percent were commercial, 24 percent professional, 2.2 percent industrial and 0.6 percent were related to tourism.

Licenses can be renewed for a period of up to four years and for this the lease must be valid. If the license is being renewed for more than a year, the number of years should be specified in the text message. Also, there shouldn’t be any change in the location of the company; it should be same as that of the previous year.

The auto-renewal service sees to it that a text message is sent to the license holders to inform them about the date of renewal. This will be sent a week before the license gets expired and the message will also carry details on the service channels and steps to complete the renewal process. The service covers more than 2,200 commercial activities.

External approvals are not required to carry out the renewal process. But, for transportation by public taxi, transportation by limousine, rent-a-car, and non-emergency transportation services, the Roads and Transport Authority’s permission is obligatory. This is in addition to inbound and outbound tours, related to the Department of Tourism and Commerce Marketing.

Some of the major activities for which the licenses were auto-renewed in the first half of the year include general trade, ready made clothing, perfumes and cosmetics, watches and spare parts, gifts, dyes and paints, textiles, plumbing and sanitary installations, and carpentry and flooring.
Business licences can be auto renewed in two simple steps and in less than two minutes and that is the reason why people are embracing it whole-heartedly.

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Complete ownership for 122 economic activities on UAE Mainland

Lavin Nalinbabu, Senior Manager Business Consultancy

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The much-awaited announcement regarding the activities and sectors eligible for 100 percent foreign ownership in the UAE has finally been made. Foreign investors can get complete control over 122 economic activities across 13 sectors.

Complete ownership for 122 economic

The sectors include renewable energy, space, agriculture, manufacturing, transport, storage and many more. The production of solar panels, power transformers, green technology, and hybrid power plant, e-commerce transport, supply chain, logistics, and cold storage for pharmaceutical products are some of the activities included in the project.

Other areas of ownership by foreign investors include hospitality and food services, information and communications, professional, scientific and technical activities, administrative services, support services, educational activities, healthcare, art and entertainment, and construction.

According to His Highness Shaikh Mohammad Bin Rashid Al Maktoum, “Local governments will identify the percentage of ownership in each activity according to their circumstances. Our goal is to stimulate, activate and facilitate businesses. We want to open and expand new economic sectors. We want to attract new investors and new talents and enhance the global competitiveness of our national economy”.

The move has been highly appreciated by foreign investors, as it gives them the opportunity and freedom to establish their business wherever they like. Till day, foreign investors had to restrict their activities within the specific free zone. If they had to open a business on mainland, then they had to partner with a local sponsor. The new policy is a saviour for them, as it gives them complete ownership on businesses in mainland.

The new policy will not only benefit overseas investors looking to do business in the Emirates, but the overall economy of the country as well. It will provide higher levels of security to investors and eventually lead to a rise in businesses on mainland.

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Dubai’s non-oil trade reaches Dh339 billion

Jay Krishnan, Partner

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Dubai non-oil foreign trade witnessed a growth of 7 percent in the first quarter of 2019. The figure that stood at Dh316 billion in the first quarter of 2018 has increased to Dh339 billion in the current year’s first quarter.

The maximum growth happened in the exports sector, which reached Dh42 billion with a rise of 30 percent. While re-exports grew by 7 percent to Dh106 billion and imports are worth Dh190 billion (an increase of 4 percent).

The non-oil trade volume of Dubai increased by 32 per cent to reach 28 million tons. There has been a surge in the exports and it reached 6 million tons. Re-exports increased by 41 per cent to 4 million tons and imports rose 16 per cent to reach 17 million tons.

Surge in UAE non-oil trade market

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai, said: “This robust performance and marked growth of Dubai’s non-oil foreign trade is an indication that we are on the right path of revenue diversification in alignment with the values and standards outlined in the 50-Year Charter. The Dubai Silk Road Strategy supports decades of successful investment in developing the emirate’s infrastructure. In line with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, we are committed to developing our government services so that we can become a world-class model for future governments based on knowledge, innovation and advanced AI applications.”

Free zones contributed AED 147 billion via trade. Direct trade was the major contributor to total trade at AED 189 billion and customs warehousing accounted for AED 2.3 billion. Air and sea trade also have a major share of contribution and accounted for 85 percent of the total trade. AED 158 billion is the outcome of air trade and sea trade accounted for AED 129 billion. Trade by land reached AED 52 billion.

Dubai’s trade with Asia reached AED 208 billion (7 percent increase), with Europe AED 58 billion and with Africa AED 42 billion. Among these, the trade with Africa witnessed the biggest growth, which rose to 36 percent. Americas and Oceania also contributed to the trade sector.

AED 90 billion was the total value of gold, diamonds and jewellery traded through Dubai. Phones market was also a major contributor and accounted for AED 42 billion.

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A guide for foreigners who aspire to set-up business in Dubai

Jay Krishnan, Partner

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The city of Dubai doesn’t require any special introduction as it is one of the most popular places in the world. We all know the position Dubai enjoys as a tourist destination; but its much more than that. A fertile ground for new businesses, Dubai, is any investor’s dream. Establishing your business in Dubai is not just easy, but highly profitable as well.
There are a couple of things that you should be aware of before you kick-start your business in Dubai.

Economic zone and ownership

Once you decide to setup your business in Dubai, the first step is to figure out the business zone that suits your company. One can choose from mainland, free zone or offshore, to establish their entity, all of which offer diverse advantages.

Free zone
Free zones are the strongest pillars of UAE’s robust economy. They have been fruitful in attracting remarkable amount of foreign investment, generating thousands of jobs and facilitating technology transfer into the country. The business-accommodating laws, easier labour and immigration procedures and tax structures make these free zones the most sought-after business locations in UAE.

Dubai alone is home to more than 30 free zones, contributing significantly to the economy of the city. The free zones accounted for 32 per cent of Dubai’s total direct trade in the year 2015, driving about 500 billion AED of commerce. As per 2015 data, there were 20,000 free zone firms operating in Dubai, with 100 ‘Global Fortune 500’ companies having established their base in JAFZA.

Mainland
A mainland company is an onshore company licensed by the Department of Economic Development (DED) of the related emirate. The companies registered in the UAE mainland can do business in the local market as well as outside UAE without any restriction.

Offshore
An offshore company is a legal business entity that operates outside its registered jurisdiction for the purpose of legally minimizing tax payment.

Types of License

To conduct any form of business in the UAE, one must acquire a trade license. Licenses in Dubai can be divided into three;

  • Commercial licenses covering all kinds of trading activity
  • Professional licenses covering professions, services, craftsmen and artisans
  •  Industrial licenses for establishing industrial or manufacturing activity
    Carrying out business without a trade license is illegal in UAE and is subject to penalties. In addition, the license needs to be renewed every year.

Starting a business in Dubai begins with selecting the category of business. There are more than 2,100 industrial, commercial, professional and tourism activities available in Dubai.

This is followed by finding the right legal form, which will depend on the business activity, location, the number and the nationality of owners and the ownership options. One will have to check the legal forms that match specific business activities.
A trade name that matches the kind of services the company offers, must be selected. The next step involves applying for an initial approval certificate, stating that Dubai DED has no objection in you starting a business.

Depending on the legal form of the company, a Memorandum of Association (MOA) will have to be signed by the partners and owner and in some cases, a Local Service Agent (LSA) / Corporate Agent agreement between the company owner and the UAE national who is in charge of representing your business.

All businesses in Dubai should have a physical address. For this, tenancy contract must be signed with the landlord and registered with Ejari.
Certain business activities demand special licensing approvals, apart from the one from DED. If your business activity requires additional approvals, the relevant government departments need to be contacted.
Non-UAE nationals seeking to establish an entity in Dubai mainland need to team up with a UAE national. The UAE national will own 51 percent of shares and the non-UAE national will own the remaining 49 percent. But of late, the UAE government has announced a new law that will permit complete foreign ownership in certain sectors selected by the government. This will come into force by the end of 2019.
The new law does not apply to free zones and offshores where 100% foreign ownership is already permitted.

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UAE and its expat-friendly initiatives

Six-month Multiple Entry Visa and Permanent Residency

Jaya Krishnan

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The UAE government has recently announced a six-month multiple entry visa for certain categories of individuals. Investors, talented individuals and outstanding students will be granted the visa and this gives them the opportunity to prolong their stay in the country.

The Federal Authority for Identity and Citizenship has activated 3 new services on its portal. All the services grant visa for a period of 6 months, with variations in the number of visits. Investors can make multiple visits to complete residency procedures with the help of a 6-month visa. In the case of entrepreneurs and outstanding students, several trips can be made with their 6-month visa to complete long-term residency procedures. Talented individuals will also be granted a 6-month visa, but the number of visits will be restricted to just one.

The new visa scheme will help individuals in identifying opportunities of their interest. An Emirates ID card will be issued by the ICA to the six-month visa holders that will help them complete procedures such as opening bank accounts, property registration and other transactions, easily.
People who fulfil the conditions for long-term residency can apply through e-channels and through their accounts on the system, without a six-month entry visa.
It’s been just a week since the scheme launched and ICA has already received 6000 applications from investors and entrepreneurs.
The government has also come up with a permanent resident system named ‘Golden Card’, for investors and for exceptional workers in the fields of health, engineering, science and art.

According to Sheikh Mohammed bin Rashid, “Gold Card permanent residence will be awarded to exceptional and talented individuals, and to whoever contributes positively to the UAE’s success story. We want those people to be permanent partners in our journey. All of the residents of the UAE are our brothers and part of our large family.”
The permanent residency scheme will be highly beneficial to the country and its property market. It will change people’s perception about UAE; they will start seeing the country as a home and not just a temporary plan.

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UAE , KSA Double Taxation Avoidance Agreement in Force

Namitha Aiyllath

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The double taxation avoidance agreement between the UAE and KSA is in force now. The agreement, which was signed in May 2018, came into effect in April 2019, nearly a year later. This is the first agreement between two GCC countries and it is expected to ease the two-way investment flow along with boosting bilateral trade and economic ties. It will benefit individuals and corporates of these two countries.

Below listed are some of the key provisions of the agreement;

  • Withholding tax won’t be charged on interest and service fees
  • A cutback on the withholding tax rate on royalty payments
  • A maximum 5% WHT on dividends
  • Transfer of shares or immovable property won’t be exempted from non-resident taxation

It’s not just the natives of these two countries who can benefit from the agreement, even foreign national residents can make use of the provisions.

Residents covered by the double taxation avoidance treaty include any individual who is responsible to pay tax by reason of domicile, residence, place of incorporation or place of management,  corporate entities, sovereign wealth funds and similar government entities and other individuals exempted from tax due to religious, educational, charitable, scientific or any other reasons similar to these.

According to the agreement, a company need not pay tax on profits in the other contracting state unless business activities are conducted there through a permanent establishment(PE). Revenue from services that are not delivered through a PE in the other contracting state should not be levied WHT or any other types of tax in that state.

According to Younis Haji Al Khoori, under-secretary of the Ministry of Finance,  the agreement is a vital move towards enhancing bilateral relations between KSA and UAE, especially in financial and economic spheres. “This agreement will contribute to a more flexible investment climate that will underscore the country’s position as a key destination for Saudi investments. It represents a qualitative leap forward in terms of the framework of financial, economic and tax cooperation between GCC countries,” said Al Khoori.

“These agreements contribute to the elimination of double taxation, facilitate cross-border trade and investment flows, and provide protection to taxpayers from direct and indirect double taxation. This in turn enhances the country’s investment climate and makes it more attractive as a destination for foreign investment,” he added.

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UAE, An Artificial Intelligence Hub

Embracing Innovative Technologies

Namitha Aiyllath

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Embracing technology is no more an option, it’s a must in the ever-changing competitive corporate world. Companies will have to keep pace with the evolving technologies such as blockchain, machine learning, artificial intelligence and robotics, that are reshaping digital businesses.

UAE is a model nation when it comes to adoption of technology. Its most happening city, Dubai, is at the forefront of adopting innovative technologies. A pioneer in the development of artificial intelligence strategy, Dubai has been ranked first globally in attracting FDI for AI. The city had been successful in attracting more than $21 billion of foreign direct investment (FDI) for artificial intelligence and robotics project from 2015 to 2018. The European Union was the major contributor, with $5.7 billion, followed by the United States with $3.9 billion.

The country aims to become the foremost artificial intelligence hub globally, by understanding and promoting the use of the technology.  According to sources, the UAE government is “very much working towards accelerating the pace of AI adoption through strategic partnerships with both the public and private sectors”.

In 2017, the UAE Government launched ‘UAE Strategy for Artificial Intelligence (AI)’ with the objective to make the country first in the field of AI investments in various sectors such as transport, health, space, education, traffic and many more.

In addition to this, the government has come up with an initiative named, Think AI, that includes a series of roundtables, workshops, and panel discussions comprising of governmental officials, private sector, and local and international organisations with expertise in AI. Apart from enhancing the adoption of AI, the programmes aim to educate and attract AI experts and also provide the infrastructure required for the development and application of the technology.

The roundtables are an initiate to improve the trustability and acceptance of AI along with regulating and designing policies to develop the technology.

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