Middle East tax handbook 2017
Clarity. Connection. Confidence.
This is the 2017 edition of Deloitte Middle East Tax Handbook - a comprehensive guide to help you keep abreast of the Middle East tax rates and regimes and to guide you through the important changes to tax regimes across the region.
Changes in regulation and tax reform are often triggered by a number of events, and without doubt 2016 was a year of significant global political change and uncertainty, including Britain’s decision to leave the EU and an unexpected result in the US presidential elections. While not directly linked to the Middle East, these major shifts in the political landscape have already sent ripples across the world, and we can only speculate as to what their full effects will be.
Against this political backdrop, there is amplified scrutiny with regard to the transparency of tax planning and an ethical pressure on corporations to pay their ‘fair share’ of tax. This translates to a pressure for businesses to navigate a web of increasingly complex rules and procedures.
One of the most significant tax changes for the Middle East is the impending introduction of value added tax (VAT) to the GCC, expected to come into effect in 2018. As a result, VAT is high on the business agenda, with boards of directors focusing on tax strategy as a key part of their future governance activities. The upcoming years will see an increased need for businesses to manage tax as a function, putting in place the processes and people needed to support its implementation and potentially establishing dedicated resources to oversee VAT activities.
The potential impact of implementation and operation of a VAT system is expected to be significant for all large businesses operating in the region, touching on a very broad section of businesses’ activities and support functions. We expect the process for full transition will likely span two to three years and that the effective implementation of VAT will likely pave the way for further tax reform.
Preparedness is essential for adapting to regulatory change. Businesses need to understand the exposures they have, in all of the countries they operate in, as well as put a strategic framework in place to ensure they create long-term value and are compliant in this new world of tax regulation. At present, we continue to carefully monitor these trends in regulation to help you better manage what lies ahead.