close
Share with your friends

UAE: Country-by-country reporting requirements

UAE: Country-by-country reporting requirements

The United Arab Emirates (UAE) has introduced country-by-country (CbC) reporting requirements as well as economic substance regulations.

1000

Related content

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:

  • CbC reports will be required of entities that are “tax residents” in the UAE and also part of a multinational enterprise (MNE) having consolidated revenues equal to or exceeding AED 3.15 billion (approximately €760 million or U.S. $855 million) in the preceding financial year. 
  • The UAE-based entity of an MNE must notify the competent authority (the UAE Ministry of Finance) if it is an ultimate parent entity or if it will serve as a surrogate parent entity appointed to file the CbC report on behalf of the MNE, or must notify the Ministry of Finance of the identity and tax jurisdiction of the enterprise that will be submitting the CbC report. This notification is required before the end of the financial reporting year of the MNE. The CbC report must then be filed within 12 months from the end of the financial reporting year of the MNE. The first financial reporting period begins from 1 January 2019.
  • The CbC reporting rules generally are in line with guidance issued by the OECD with respect to the content and format of CbC reports. This includes aggregate financial information (relating to the amount of revenue, profits/losses before income tax, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees, and tangible assets other than non-cash or cash-equivalent assets), along with details about business activities conducted and other disclosures and explanations provided by the MNE, with respect to each jurisdiction in which the MNE operates.
  • Failure to comply with the CbC rules may result in the imposition of penalties.

 

KPMG observation

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

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal