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VAT Advisory
  • Overview
  • UAE VAT Advisory
  • UAE VAT Audit
  • UAE VAT Deregistration
  • Economic Substance Regulation
  • Country by Country Reporting (CbCR)
  • Tax Residency Certificates

Overview

Oil was discovered in the UAE in 1958 and it has rapidly developed as one of the major Oil producing countries in the world. Within UAE, the Emirates of Abu Dhabi has the major oil reserve followed by Dubai and Sharjah. The UAE brought in law in 1965 to tax the income of oil and gas and petrochemical companies. The minimum tax rates were fixed at 55%. Subsequently, income tax was also levied on the branches of foreign banks in the UAE. The rates of tax is generally 20%.

Historically Oil has been the major contributor to the Government’s revenue source. Introduction of Excise Tax wef 1 October 2017 and Value Added Tax (VAT) wef 1 January 2018. Both Excise Tax and VAT in the UAE are based on the Common GCC Tax Framework for Excise and VAT.

Although UAE has no corporate tax or personal income tax, it has, to encourage trade and investments and to eliminate double taxation, it has entered into Double Tax Avoidance Agreements (DTAA) with many trade partners (115 as at 15 July 2021). This DTAAs are beneficial to both, UAE residences and companies incorporated in UAE.

With an objective to provide our clients with the best possible advice on their tax matters/issues, we provide the following services

  • UAE VAT Advisory
  • UAE VAT Audit
  • UAE VAT Deregistration
  • Economic Substance Regulation
  • Country by Country Reporting
  • Tax Residency Certificates

Have Specific Questions?

Speak to our experts who can guide you in the right direction and help you to stay ahead.

VAT Advisory - Overview

Managing VAT obligations will be an ongoing challenge for businesses. With the passage of time, VAT legislation is likely to witness changes, which will have an impact on businesses. More VAT considerations will come into play with changes in business scenarios, such as new events like EXPO 2020, launch of new services, new transactions being added to your business, or with changes in your supply-chain structure.

All these would need review and advice from a VAT impact perspective

VAT Registration - Tax Registration Number (TRN)

The UAE VAT Law requires a taxable person to register for VAT with Federal Tax Authority (FTA) and obtain a Tax Registration Number (TRN). The Law provides mandatory registration and voluntary registration thresholds.

  • A taxable person is mandatorily required to register with FTA if its taxable supplies exceed AED 375,000 (Three hundred seventy-five thousand dirhams) in the past 12 (twelve) months or it expects it to achieve the mandatory threshold in the next 30 (thirty) days.
  • Alternatively, if the taxable supplies exceed AED 187,500 (One hundred eighty-seven thousand five hundred dirhams) in the same period, it can proceed with voluntary registration.
  • The Law allows group registration for groups with multiple entities in the country

VAT Implementation and Training

UAE VAT Laws provides for 5 different rates for the type of transactions as follows:

  • 0% for export of goods and services
  • 5% standard rate
  • Exempt for certain goods and services
  • RCM for certain imports and exports of goods and services
  • Out of Scope from UAE VAT for certain transactions
  • Complying with the Tax Invoice requirements
  • vailing Input VAT credits and where it cannot be claimed etc, and such training will be imparted to your team

VAT Returns

Yo the frequency of your VAT filings with FTA depends on xxxx. The due date for making the payment and filing the Returns in the FTA portal is 28 days from the end of the Return period.

How KPI Tax Experts Assist You

  • Obtaining a TRN / Group TRN. We will evaluate your business and assess if you are for registration under the provisions of the Law.
  • Understanding your business model and assist you in implementation of the VAT rates in the system and to facilitate generation of VAT Reports. We will handhold you through the entire process and provide training to your team on UAE VAT Laws applicable to your business processes
  • Assistance in filing your VAT Returns on time. Should you require we will also verify the transactions in the VAT Return period, on a sample basis, to check the correct treatment of the VAT in the Return.

Happy to Help!

Reach out to us for assistance on UAE VAT Registration in UAE.

Frequently Asked Questions

Overview

The FTA conducts two types of audits;

  • An investigation on a sample basis when a refund is applied
  • Annual audit

The FTA provides strict timelines for submitting the requested information

Happy to Help!

KPI Tax experts can assist you compiling the required information in filing your VAT Returns on time. Should you require, we will also verify the transactions in the VAT Return period, on a sample basis, to check the correct treatment of the VAT.

Frequently Asked Questions

Overview

Once a business is a Tax Registrant with the FTA, it must deregister on the following two events

  • A Tax Registrant stops making taxable supplies and does not expect to make any taxable supplies over the next 12 months
  • Taxable supplies in the previous 12 months is less than the Voluntary Registration threshold (AED 187,500) and are not expected to exceed the Voluntary Registration threshold in the next 30 days

Deregistration application should be made to FTA within 20 business days of the occurrence of the above event.

Happy to Help!

We will assist you in the deregistration process and complete the documentation.

Frequently Asked Questions

Overview

UAE is a signatory and a member of the Organization for Economic Co-operation and Development (OECD) Inclusive Framework. OECD’s Inclusive Framework on Base Erosion and Profit Shifting (BEPS) has identified 15 Action Points that members need to implement to ensure free trade and economic development.

In response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation, the UAE issued Economic Substance Regulations on 30 April 2019. These Regulations were subsequently amended by Cabinet of Ministers Resolution No. 57 of 2020 on 10 August 2020.

The Regulations requires all Licensees (both onshore and offshore/ free zone companies) that carry out any of the defined Relevant Activities to maintain and demonstrate an adequate economic substance in the UAE appropriate to the level of activities they undertake in the UAE.

Relevant Activities under Economic Substance Regulation in UAE

The Relevant Activities are:

  • Banking Business
  • Insurance Business
  • Investment Fund Management Business
  • Lease - Finance Business
  • Headquarters Business
  • Shipping Business
  • Holding Company Business
  • Intellectual Property Business
  • Distribution and Service Centre Business

These Regulations apply from financial years commencing on or from 1 January 2019. Licensees conducting any of the Relevant Activities (as above) are required to submit an annual Notification within six (6) months from the end of the financial year and an annual Economic Substance Report within twelve (12) months from the end of the financial year to their respective Regulatory Authorities. Ministry of Finance has created a separate portal for ESR filings.

The Licensees are required to conduct an Economic Substance Test each year to assess if they are carrying out any of the Relevant Activity(ies) in the reportable financial year and accordingly file the Notification and Economic Substance Report.

How KPI ESR Experts Assist You

  • Understanding business structure and Identifying whether the company’s business falls in the list of businesses/industries which the UAE ESR have prescribed
  • Analysing the economic substance requirements based on relevant activity identified, identifying gaps and providing corrective actions
  • Understanding business structure and Identifying whether the company’s business falls in the list of businesses/industries which the UAE ESR have prescribed
  • Assistance in ensuring timely compliance and reporting

Happy to Help!

KPI Tax experts will assist you in conducting the Economic Substance Test and to submit the Notification and Report

Frequently Asked Questions

Overview

UAE is a signatory and a member of the Organization for Economic Co-operation and Development (OECD) Inclusive Framework. OECD’s Inclusive Framework on Base Erosion and Profit Shifting (BEPS) has identified 15 Action Points that members need to implement to ensure free trade and economic development.

In response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation, the UAE issued Economic Substance Regulations on 30 April 2019. These Regulations were subsequently amended by Cabinet of Ministers Resolution No. 57 of 2020 on 10 August 2020.

The Regulations requires all Licensees (both onshore and offshore/ free zone companies) that carry out any of the defined Relevant Activities to maintain and demonstrate an adequate economic substance in the UAE appropriate to the level of activities they undertake in the UAE.

How KPI Experts Assist You

  • Consolidating the financials of the group companies
  • Preparation of the detailed CbC Report to ensure that they are filed correctly with the Regulatory Authority.

Happy to Help!

Reach out to us for assistance with Country by Country Reporting in UAE.

Frequently Asked Questions

What is a Tax Residency Certificate?

Tax Residency Certificates (TRCs) establish the tax residency of a natural or juridical person. TRCs are essential to advantage and avoid double tax on incomes earned in another jurisdiction. Many Double Tax Avoidance Agreements (DTAA) make TRCs mandatory to avail the reduced tax benefits. In the UAE, TRCs are issued by the FTA. With an aim to increase competitiveness and reduce or exempt taxes on income generated though business or investment in the UAE, the government of UAE has entered into about 193 DTAA and Bilateral Investment Treaties (as at 30 June 2021).

What are the requirements to obtain a Tax Residency Certificate?

The requirements to obtain a Tax Residency Certificate are different for an individual and a company. The documents required are:

Requirements for an individual

  • Passport copy and valid visa copy issued at least 180 days earlier Emirates ID copy
  • 6 months of personal UAE bank statements, stamped by the bank
  • Passport copy and valid visa copy issued at least 180 days earlier Emirates ID copy
  • 6 months of personal UAE bank statements, stamped by the bank
  • Proof of income in UAE – e.g. employment agreement, share certificate, salary certificate
  • A report from the General Directorate of Residency and Foreign Affairs (GDRFA), showing evidence of all entries into and exits from the UAE
  • A copy of certified tenancy contract or title deed, valid for at least three months prior to application

The Tax Residency Certificate application fees are AED 2000, payable to the Ministry of Finance (MoF). These fees must be paid through UAE e-Dirham Card.

Requirements for a company

  • Valid UAE Trade Licence – Mainland DED or Free zone – the company must have been active for over 1 year
  • A copy of MOA (Memorandum of Association) for the company
  • A copy of the Certificate of Incumbency for the company – normally the Chamber of Commerce certificate
  • The Organisational chart structure of the company
  • Certified commercial tenancy contract copy or title deed - valid for at least three months prior to application, a physical office space is mandatory (virtual office space will not be sufficient)
  • Passport, valid UAE resident visa copy and Emirates ID of the company directors, shareholders or managers
  • Latest certified audited financial statement or UAE company bank statements from the last 6 months, stamped by the bank

The Tax Residency Certificate application fees for a company are AED 10,000, payable to the Ministry of Finance (MoF), paid through e-Dirham Card.

How KPI Experts Assist You

  • Assistance with acquisition of the TRC
  • Verification of documents required to obtain the TRC
  • Support and help with any other regulatory approvals and licences

Happy to Help!

Reach out to us for assistance with Country by Country Reporting in UAE

Frequently Asked Questions

Overview

Evolution of a business is the only constant. Business strategies should adapt to the dynamic economic landscape. Companies diversify, divest, grow organically and inorganically or bring in additional investors etc. These are typically a long-drawn process which require substantial time from the senior management and finance team of the company.

Having an experienced transaction advisor by your side helps you to understand the challenges and risks associated with transactions and how to mitigate or overcome such risks.

At KPI, we provide our clients with the information they require to make an informed decision. Our team of experienced professionals have executed multiple transactions over the years and thus bring invaluable experience to the table

KPI can assist you with

Have Specific Questions?

Speak to our experts who can guide you in the right direction and help you to stay ahead.

Merger & Acquisition Advisory

A company can attain faster growth inorganically. But it may not always be the case. Each deal or transaction has its own inherent complexities and risks, be it domestic or cross-border. One could possibly face cash flow issues, valuation challenges, tax issues, litigations.

How is the management sure that it will deliver value to its shareholders?

It is important to understand and take into consideration the market dynamics, and conduct a thorough due diligence across finance, commercial, tax, human resources, systems, legal and compliance. This will provide a wholistic view of the challenges and risks associated with the transaction. The next critical stage is the structuring of the transaction.

KPI’s knowledgeable team can provide you with end-to-end advisory and possible solutions. Our team of experts will work together with your team and help deliver the desired results.

Our team’s decades of experience in M&A Advisory in UAE enables us to provide turn-key solutions.

Get the Right Guidance.

Send Inquiry
Dr

Speak to Our Team

Rajgopal Pai

Partner - Advisory

Tel: +9714 455 1010

Email: [email protected]

Due Diligence

Financial due diligence is a process of verification and investigation of financial records for a potential deal to confirm all relevant facts and financial information, and to verify anything else that was brought up during an M&A transaction. Financial due diligence is completed before a transaction closes to provide the buyer with an assurance of what they’re getting. Issues and concerns identified during the financial due diligence exercise has varying impact on the valuation of the transaction.

Buy-side Due Diligence

We assist and advise the buyer in the transaction by undertaking and identifying key value drivers, risks and opportunities associated with the transaction. We identify and report any potential issues that the target business might be facing.

To help you achieve the transaction objective, KPI can help you with

  • Enhancing your understanding of the targets business
  • Identify and understand critical success factors
  • Identify potential synergies going forward and weaknesses/ threats that should be resolved

Sell-side Due Diligence

Also known as Vendor due diligence, it is usually undertaken by the seller highlighting the financial strength of the business or division put up for sale. A third-party vendor due diligence report detailing in-depth financial health of the seller provides a greater degree of assurance to the buyer.

To help you achieve the transaction objective, KPI can help you wit

  • Providing greater control over the entire sale process thereby helping obtain deserving value for the business
  • Providing the buyer with higher level of comfort over the nature of business and the characteristics of its cash flow.
  • Vendor due diligence report aids buyer and thereby reducing the buyers time on significant access to due diligence.
  • Identification of potential critical areas that could be fixed before the potential sale

Our team’s decades of experience in Financial Due Diligence in UAE enables us to provide turn-key solutions.

Get the Right Guidance.

Send Inquiry
Dr

Speak to Our Team

Rajgopal Pai

Partner - Advisory

Tel: +9714 455 1010

Email: [email protected]

Valuation is an art of putting the science to use.

Business valuation is a process of determining the economic value of a whole business or a division of the company. Valuation of business is typically undertaken to understand the economic value of the business, for selling or buying stake in the company, taxation purpose and at times even for divorce proceedings. There are various methods being adopted by the valuators, commonly among them are the Discounted Cash Flow and Price Earnings multiples and Net Asset Value. The method of valuation adopted largely depends on the purpose of valuation is conducted for.

Valuation is not only about the company data, the future of the business or industry it deals in, it also considers the market dynamics, government policies with respect to the business and industry. In a transaction, valuation is the basis for negotiations.

At KPI, we provide our clients with an independent advice on valuation concerning the transaction. Our valuation team, having extensive experience across industries, brings technical expertise with a pragmatic outlook to deliver the desired output.

Our team’s decades of experience in Business Valuation in UAE enables us to provide turn-key solutions.

Get the Right Guidance.

Send Inquiry
Dr

Speak to Our Team

Rajgopal Pai

Partner - Advisory

Tel: +9714 455 1010

Email: [email protected]

Overview

Risk in inevitable – whether in business or otherwise. And subconsciously, we do have mitigation plans for various risks. Good old example is Insurance – life, property, health, loss of profit, keyman insurance etc. Risks should be identified at the strategy setting to ensure adequate and appropriate mitigation plans are operational. More importantly, the current pandemic has made the businesses realise that a wholistic view of their business risks is a requirement and not a luxury anymore. With the correct risk management strategies and practices in place, a business can smoothly sail any storm.

At numerous occasions, risks come knocking at our doors while we are unprepared. At the same time, it is not possible for any business to manage each and every risk they might encounter. Businesses may choose to live with certain risks that are insignificant compared to the level of their operations. Risks critical for the business must always be managed.

KPI’s risk advisory services include

  • Enterprise Risk Management
  • Internal Audit
  • Standard Operating Procedure
  • Regulatory and Compliance Risk

Have Specific Questions?

Speak to our experts who can guide you in the right direction and help you to stay ahead.

Enterprise Risk Management

Enterprise Risk Management (ERM) is a systematic process of identifying, analyzing, and responding to anticipated future events that have the potential to generate unwanted effects. ERM should be viewed as an ongoing and continuous process within an organization. ERM helps in creating and preserving organizational values and importantly aids in better decision making. ERM is an integral and a critical part of governance and culture in an organization. Risk mitigation avoids litigation.

Enterprise Risk Management - How KPI can Assist?

KPI’s ERM professionals ensures business risks are appropriately considered (identified, assessed and managed) and is integrated with the performance management. We guide and handhold the business to identify risks in their respective business areas and to prepare and implement the mitigation plans for smooth business operations. We adopt a consultative approach comprising interviews, surveys and workshops to identify risks.

Your organization benefits with our tested methodology with

  • ERM framework development
  • Risk assessment workshops
  • Risk register with risk ratings and mitigation plans
  • Risk reporting templates

Our team’s decades of experience in ERM Advisory in UAE enables us to provide turn-key solutions.

Get the Right Guidance.

Send Inquiry
Dr

Speak to Our Team

Rajgopal Pai

Partner - Advisory

Tel: +9714 455 1010

Email: [email protected]

Internal Audit in UAE

Internal Audit is an independent assurance that ensures risk management, governance and internal controls processes are operating effectively. Internal Audit identifies the lacunas/ weaknesses in the processes and addresses them in a time bound manner thereby preventing any repercussion to the organization and/or its stakeholders.

Recent trends suggest that internal audit functions have been assigned strategic importance within an organization. Internal Audit function today influences the business to adopt robust and innovative technologies, develop out-of-the-box solutions for business issues leading thereby to new business models. An effective Internal Audit function should always be independent and reporting directly to the Board of Directors/ Audit Committee of Board.

Internal Audit - Why work with KPI?

At KPI, we ensure that our Internal Audit mandates are independent from all respects. Our collective experience across industries and business understanding ensures that we add value to our Client’s business. We can also conduct an independent review of your internal audit function. We work closely with Audit Committee/ Board of Directors and assist them in making informed business decisions.

Our team’s decades of experience in Internal Audit in UAE enables us to provide turn-key solutions.

Get the Right Guidance.

Send Inquiry
Dr

Speak to Our Team

Rajgopal Pai

Partner - Advisory

Tel: +9714 455 1010

Email: [email protected]

What are Standard Operating Procedures?

A Standard Operating Procedure (SOP) is a step-by-step guide that describes an activity necessary to complete a task or process in accordance with the rules and regulations governing the business and the standards set by the management of the company. SOPs are policies, procedures and standards within various functions (operations, administration, finance and marketing), with adequate controls, to ensure smooth business functioning

Developing SOPs is all about documenting your processes sequentially. No two businesses can have similar SOPs due to their market, the regulations, the business polices and standards.

Working with KPI for Your Next SOP Requirement

At KPI, we understand the importance of defined set of procedures and processes. We will assist you in developing SOPs, policies and manuals that are aligned with your business requirements, bringing in the industry best practices that will help you achieve your business objectives and goals.At KPI, we understand the importance of defined set of procedures and processes. We will assist you in developing SOPs, policies and manuals that are aligned with your business requirements, bringing in the industry best practices that will help you achieve your business objectives and goals.

Our team’s decades of experience in SOP Advisory in UAE enables us to provide turn-key solutions.

Get the Right Guidance.

Send Inquiry
Dr

Speak to Our Team

Rajgopal Pai

Partner - Advisory

Tel: +9714 455 1010

Email: [email protected]

Regulatory & Compliance Risk

With the introduction of new legislations and regulations in the UAE and the ever-changing business landscape, businesses are exposed to a greater degree of compliance risk. Apart from the financial impact, non-compliance could also result in Reputation risk. A business need to thoroughly understand the regulatory environment it operates in and compliance requirements. Regulations differ between industries and Emirates. However, the Federal legislations remain same across the Emirates.

Our team understands the importance of risks faced by businesses due to non-compliance and also what needs to be done to protect the businesses from the adverse impact of Compliance Risk.

Our team’s decades of experience in Regulatory & Compliance Risk Advisory in UAE enables us to provide turn-key solutions.

Get the Right Guidance.

Send Inquiry
Dr

Speak to Our Team

Rajgopal Pai

Partner - Advisory

Tel: +9714 455 1010

Email: [email protected]

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With over 30 years of hard work and commitment to making a real difference, KPI has grown to serve customers from a variety of business sectors and industries across Middle East.

KPI | Suite 301 & 308, Building – 2, Bay Square, P.O. Box 121395, Business Bay, Dubai, UAE.

+971 4 455 10 10

[email protected]