UAE and Oman multinational firms' tax liabilities will be affected by World Tax Reforms

According to KPMG, the recent agreement among 130 countries and jurisdictions to reform international tax rules will have tax implications for multinational companies operating in the UAE and Oman.

The UAE and Oman are among the 130 countries that have agreed to the Organisation for Economic Co-operation and Development’s (OECD) framework for two-pillar global tax reform.

“The UAE and Oman are among the 130 Inclusive Framework members who have agreed to the announcement and, as a result, have indicated their intent to accept the suggestions. As a result, both pillars will influence companies doing business in these countries,” said Shabana Begum, Partner, and Head of Transfer Pricing at KPMG Lower Gulf.

The new two-pillar strategy to change international taxation rules aims to ensure that multinational corporations pay their fair amount of tax wherever they operate. The framework and the implementation plan are slated to be completed in October of this year.

Pillar One will provide a more equitable allocation of earnings and taxing rights among countries in the case of the largest MNEs, particularly digital enterprises. It would re-allocate some of MNEs’ taxes rights from their home nations to markets where they have economic activity and earn profits, regardless of whether businesses have a physical presence there.

Pillar Two aims to put a floor under corporate income tax competitiveness by instituting a global minimum corporate tax rate that countries might employ to preserve their tax bases.

Source: Gulf News