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Deloitte Middle East Tax Handbook 2018
Expanding perspectives and possibilities
Deloitte Middle East is pleased to present the 2018 edition of our 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.
More often than not change is challenging, and the way in which we address it as well as how prepared we are to take it on are key defining factors that impact the end outcome of what comes our way. 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 ever-evolving landscape. Changes in regulation and tax reform continue to be on the increase in the Middle East, and include the implementation of a value added tax (VAT) regime that commenced in the Kingdom of Saudi Arabia (KSA) and United Arab Emirates (UAE) on January 1, 2018 with 5% VAT applying on the sale and purchase of most goods and services. This has represented a major transformation for both the government and consumers. As a transactional tax, the introduction of VAT posed a challenge for KSA and UAE businesses, especially with the significant impact it had across their entire operations. In addition, now that VAT is here, there is no option but to be compliant, as failing to do so poses both regulatory and reputational risks due to the imposition of VAT penalties.
During the ensuing period it is anticipated that the remaining four Gulf Corporation Council (GCC) member states will each proceed with their respective plans, and domestic laws, to implement a VAT in accordance with the Treaty by 2019. Theexistence of the Treaty as a core set of principals provides GCC businesses with enough direction to commence their implementation even though the respective domestic VAT laws are not, at time of writing, yet available. GCC business executive teams should also need to work closely with their technology partners to agree and implement the right VAT 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 integral to this. In this regard, Deloitte's tax technologists bring a wealth of technology and tax knowledge, and a disciplined approach, to create added value.
In addition, with the issuance of the final recommendations of the Organization for Economic Co-operation and Development (OECD) on the 15 Base Erosion and Profit Shifting (BEPS) action items, the importance of transfer pricing has further increased as it dominates the BEPS agenda for taxpayers and tax authorities across the world. Following the global trend, many countries across the Middle East have also committed to introduce BEPS recommendations in domestic legislation, which is likely to further sharpen the focus on transfer pricing in the region. In 2018, transfer pricing should be at the top of the agenda for all tax executives.
We are at a time when everything defining the global and local tax landscape of the past is shifting and yielding a fundamentally different future – compounded by increased scrutiny from revenue authorities and the media. This intensifies 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.