KPMG and Department of Economic Development focus on taxing times

KPMG and Department of Economic Development focus

A business seminar co-hosted by KPMG and Dubai Exports, an agency of the Government of Dubai’s Department of Economic Development has highlighted how recent developments in the regional tax landscape could impact GCC businesses and investments.

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Dubai, 2016: One key theme that emerged from the discussion was transfer pricing and how it could impact business. Currently, there are no UAE-applicable transfer pricing regulations but the UAE’s evolving tax regime could potentially change this.

Nilesh Ashar, a tax partner with KPMG, said: “Transfer pricing is the price at which goods and services are sold between legal entities within the same company, and is at the core of international trade. Any business operating in more than one country must keep up to speed with emerging transfer pricing rules. National tax policy decisions are having an immediate and major impact on the competitiveness of businesses, which is why a number of high profile companies have restructured themselves – in part to leverage the lower tax rates offered by different jurisdictions.”

Shabana Begum, who heads KPMG’s transfer pricing function across the Lower Gulf, added: “The Organization for Economic Co-operation and Development (OECD) has agreed an action plan on base erosion and profit shifting (BEPS) that will close many, if not all, international tax loopholes. Transfer pricing documentation needs to be more transparent. We expect many companies will review the use of representative offices within global business operations and consider restructuring to reduce any potential impact on post-tax revenues.”

The OECD’s Action Plan on BEPS is designed to close gaps in existing international rules that allow corporate profits to be significantly reduced or artificially shifted to low tax environments, where companies have little or no economic activity. 

According to Anuj Kapoor, a regional director with KPMG’s Middle East & South Asia practice, “Related party transactions have always been a critical path for regional tax audits. We are about to see significant fiscal change across the GCC.  Global developments, such as BEPS, also impact tax developments across the region. Businesses that understand the implications and consequently align their business with the BEPS model should minimize the impact of inevitable inefficiencies caused by any uncertainty.”

In addition to transfer pricing, attendees at the seminar also enjoyed interactive sessions delivered by KPMG tax partners from the UAE, Saudi Arabia and India. Valuable information which could be used to develop effective regional strategies was shared, as well as international and regional leading practice.  Dr. Ashraf Mahate, Head of Export Market Intelligence at Dubai Exports, commented, “Effective exporting requires companies to have a comprehensive strategy, an important part of which is to understand the implications of taxation on their business”. 

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About KPMG

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 155 countries and have more than 174,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

For media queries:

Annu Walia
Assistant Manager, Markets
T: +971 4 424 8906
M: +971 52 991 0159
E: awalia@kpmg.com

 

© 2017 KPMG, KPMG LLP and KPMG Lower Gulf Limited, registered in the UAE and member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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