The United Arab Emirates (UAE) has introduced country-by-country (CbC) reporting requirements as well as economic substance regulations.
With this action, the UAE is the third Gulf Cooperation Council (GCC) member state to adopt CbC rules. Previously, Saudi Arabia included CbC reporting requirements in the transfer pricing rules, and Qatar introduced CbC reporting requirements.
In the UAE:
UAE-based MNEs that are within the scope of the CbC reporting requirements need to consider what actions to take with regard to their initial reporting strategy—but equally important, need to understand how the CbC reporting requirements apply to their organization and in what way the information could be interpreted by (multiple) tax authorities. UAE-headquartered MNEs that have previously filed a CbC report in a “surrogate parent entity” jurisdiction need to reconsider whether such practices can continue going forward. Foreign-headquartered MNEs may also need to re-evaluate their CbC reporting strategy since it now may include UAE considerations.
Read a July 2019 report prepared by the KPMG member firm in the UAE
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