GCC Corporate Tax and Related Compliances

The tax landscape in the Gulf Cooperation Council (“GCC”) countries has recently undergone significant changes. Among these recent developments, we find the introduction of corporate tax in the UAE. Let us have a look at the corporate tax compliances and rates in the GCC.

GCC Countries Corporate Tax Rates

KSA

Oman

Kuwait

Qatar

UAE

CT Rate

85% - Production of oil and hydrocarbons

20% - Others

2.5% - Zakat

3% - Small and Medium sized enterprises

55% - Petroleum

15% - Others

15% - CT rate

1% - Zakat

35% - Petroleum operations or the petrochemicals industry

10% - Others

9% - Above 375,000 AED

15% - Large multinationals that meet specific criteria

Annual corporate tax return

Within 120 days from the end of taxable year

Within 4 months from the end of the accounting year

Within 15 days of 4th month following the end of taxable period

Within 4 months from the end of the taxable year

Within 9 months from the end of tax period

Withholding tax payment

10 days from the end of month in which payment

was made

14 days from the end of the month in which payment is made or tax is deducted

No withholding tax. However, must retain 5% of contract value and pay it after receiving tax clearance certificate from the payee

16 days from the end of the month in which tax is deducted

Annual Withholding tax return

Within 120 days from the

end of financial year

Details of withholding tax to be submitted with the annual tax return

Advance or accelerated tax payments

Pay advance income tax in 3 equal quarterly instalments, if due

Contract information form

Within 3 months from conclusion of the contract

Notification to tax authority upon conclusion of contracts

Notify the tax authority within 30 days of signing the contract.

Transfer pricing (TP) or related party disclosure form

120 days from the year-end

No formal TP regulations. But the tax authorities deem profit margins on certain activities

To be submitted with the annual tax return

Yet to be specified

Transfer pricing documentation

Maintain local file and master file - subject to threshold limits

Maintain local file and master file subject to threshold limit

Maintain local file and master file subject to threshold limits (yet to be specified)

Country-by –country notification

120 days from the year-end

Last day of the financial year

Country-by –country report

12 months from year-end

How can we help?

Tax is an integral part of any business, and its impact is far-reaching. As such, it is crucial to ensure timely submission of tax compliances and reporting requirements to mitigate any penalties that would lead to unwarranted tax liability.

Crowe UAE can assist businesses in

Undertaking tax compliances within the stipulated timeline

Restructuring the business models/operations in a tax efficient manner with a holistic approach

Advising on cross border transactions

Undertaking TP risk and opportunity analysis

Implementing TP policies

Updating the existing system to meet tax requirements

Drafting of local file and master file

and many other tax services that add value to our clients’ businesses