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Deloitte Middle East Tax Handbook

Confidence to turn change into opportunity

All you need to know about the tax landscape in Bahrain Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman,Palestinian Ruled Territories, Qatar, Kingdom of Saudi Arabia (KSA), United Arab Emirates (UAE) and Yemen

We are pleased to present the new edition of the Deloitte Middle East Tax Handbook – a comprehensive guide to help you keep abreast of regional tax rates and regimes. Change is the one constant. In today’s global tax environment and the fast shifting reality in the Middle East, it is important to be able to lead through uncertainty. 

The Deloitte Middle East Tax practice is committed to providing businesses with the clarity, connection and confidence that they need in order to navigate the everevolving landscape. Changes in regulation and tax reform continue to rise in the Middle East. 

We are in the midst of witnessing the implementation of key initiatives stemming from the Base Erosion and Profit Shifting (BEPS) project developed by the Organization for Economic Co-operation and Development (OECD). Over the last period, major economies in the Middle East have joined the OECD/G20 Inclusive Framework (IF) on BEPS and thus committed to implementing the BEPS minimum standards focusing on countering harmful tax practices, abuse of tax treaties and transfer pricing (TP). 

With the commitments made, the TP landscape in the region will fundamentally change over the next couple of months and years along with a plethora of new regulations. Evidence of this sea change is the introduction of the TP Bylaws in the Kingdom of Saudi Arabia (KSA) earlier this year.

Most countries in the Middle East have also signed the Multilateral Convention to Implement Tax Treaty Related Measures (MLI), which will modify and/or complement the existing bilateral tax treaties these countries have in place. This in particular concerns elevated measures aimed at preventing the abusive application of tax treaties and their benefits respectively, as well as a broadening of the permanent establishment (PE) rules. Further, jurisdictions with no or only nominal tax (NOONs) are required to implement so-called economic substance (ES) legislation aimed at preventing offshore structures or arrangements attracting profits which do not reflect real economic activity in the jurisdiction. The United Arab Emirates and Bahrain issued ES legislation in 2019. 

Lastly, the introduction of indirect taxes, especially Value Added Tax (VAT), across the region is ongoing. After the introduction of VAT in KSA and the UAE, Bahrain implemented VAT on 1 January 2019. We are expecting other GCC countries to implement VAT later this year. Due to a number of factors such as strict application of penalties, the application of indirect taxes have proven to be a very contentious area, and will therefore continue to pose real challenges as well as regulatory risks to MENA-based businesses.  In view of the above developments and increased regulation, MENA-based businesses are advised to develop a tax strategy for the region. GCC business executive teams will also need to work closely with their technology partners to agree and implement the right tax technology architecture, especially that building a high performing tax function is critical to tax transformation success. Effective use of technology, including data management, and analytics, is a key piece of this. Deloitte’s tax technologists bring a wealth of technology and tax knowledge, and a disciplined approach, to create added value. All these changes intensify the spotlight on tax leaders and professionals. 

We want to gain a deeper understanding of challenging issues facing your business and want to help you to be confident and embrace innovation, leading in the midst of uncertainty. This is how we will find more efficient ways to meet the ever-expanding needs of today, tackle tomorrow’s challenges, and add value.

Middle East Tax handbook
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