Do not put off for today work that you have been advised can technically be done in 12 plus nine months.
This is the amount of time you have, from the beginning of your financial year, to file and settle your tax return.
By putting off work, I’m referring to registering your entity for corporate tax, which took effect in the UAE on June 1.
Assuming your financial year end is May 31, you technically have 21 months to register. But in reality, the total is one month less, since we are already in July, and it takes about a month to complete the registration process.
Do you, as a business owner, know what your accounting year is? In talking to many such people, I’ve found that they often have no idea.
Formation documents sometimes leave the decision up to the board of directors, who, if they’ve never had an external audit, typically fail to set one.
If you have conducted an external audit, then you can take the audited period as your accounting year. Corporate tax demands that you set one.
On successfully registering, you will receive a welcome pack in Arabic and English. The more important information is sitting in the documents folder on your Emarat portal account.
This contains your corporate tax number and Generated International Banking Account Number. It’s to this bank account, held at the UAE Central Bank, that you will be paying any monies due.
For avoidance of doubt, it’s a different GIBAN than the one used for your entity’s value added tax (VAT). Do not use the wrong one.
I have yet to see a corporate tax certificate, akin to that for VAT. Given the similarities between the two, it would appear likely they will be issued.
We do not know at this time whether a transaction payment reference number will be required when settling your corporate tax liability.
That addition for VAT appeared as part of the new and expanded Federal Tax Authority managed portal in December 2022.
If you fail to include the reference number, your payment will fail and be refunded to you. This is another reason not to leave matters to the last day. I have seen cases where entities found out too late that a payment had been returned, and penalties were automatically applied.
The above is an example of housekeeping. Let us now look at the far more serious matter of maintenance.
Ministerial decision No. 120 of 2023 deals with transitional rules. At its core, how do we transition from a world without corporate tax to one with it?
I liaised with Peter Wilson, an international tax expert from PB First.
One of the first tax concepts I was introduced to at secondary school was ‘bed and breakfasting’. This means to sell an asset on the last day of a tax year, and buy it back the following day. The objective is to crystallise any gain in one tax year where such allowances cannot be carried forward.
Let’s consider an entity that has material assets on its balance sheet. It’s common in the UAE, particularly among larger groups, to hold property. It might be the entity’s office building. The ministerial decision calls this "immovable property".
Back to my school days for one more moment and another aspect of tax. We are used to talking about managing the changing value of assets in your balance sheet as "depreciation".
With buildings, we talk about "impairment", as a building is not what we might consider a normal asset, like a computer or office fittings. On disposal, it is likely to be more valuable than when you bought it. This gain is taxable.
Transition arrangements allow you to lock in that gain, thus the opening value of a qualifying immovable object, as you enter a corporate tax world, takes into account the accumulated gain and nullifies any future tax liability on disposal of the asset.
Are there any rules you need to comply with to gain this advantage? Yes. Plenty of them.
From fixed structures to intangible ones. By this, think about computer software, licences, import quotas, etc. The UAE has decided that IFRS will be the applicable accounting standards used for reporting purposes.
Valuation for corporate tax purposes demands it must be accounted for on a historical cost basis. It must also have been owned prior to an entity's first tax period, and be deemed disposed of during or after the entity's first tax period, for a value in excess of its net book value.
The majority of UAE entities have January to December accounting years.
This means that there is still time to open an entity’s balance sheet and examine tangible and intangible assets with a view to proactively and positively acting ahead of potential future corporate tax liabilities.
David Daly is a partner at the Gulf Tax Accounting Group in the UAE
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Liverpool's all-time goalscorers
Ian Rush 346
Roger Hunt 285
Mohamed Salah 250
Gordon Hodgson 241
Billy Liddell 228
Results
5pm: Maiden (PA) Dh80,000 (Turf) 1,200m, Winner: ES Rubban, Antonio Fresu (jockey), Ibrahim Aseel (trainer)
5.30pm: Handicap (PA) Dh85,000 (T) 1,200m, Winner: Al Mobher, Sczcepan Mazur, Ibrahim Al Hadhrami
6pm: Handicap (PA) Dh80,000 (T) 2,200m, Winner: Jabalini, Tadhg O’Shea, Ibrahim Al Hadhrami
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Gully Boy
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Producer: Excel Entertainment & Tiger Baby
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Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
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Why seagrass matters
- Carbon sink: Seagrass sequesters carbon up to 35X faster than tropical rainforests
- Marine nursery: Crucial habitat for juvenile fish, crustations, and invertebrates
- Biodiversity: Support species like sea turtles, dugongs, and seabirds
- Coastal protection: Reduce erosion and improve water quality
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
SPEC SHEET
Display: 10.9" Liquid Retina IPS, 2360 x 1640, 264ppi, wide colour, True Tone, Apple Pencil support
Chip: Apple M1, 8-core CPU, 8-core GPU, 16-core Neural Engine
Memory: 64/256GB storage; 8GB RAM
Main camera: 12MP wide, f/1.8, Smart HDR
Video: 4K @ 25/25/30/60fps, full HD @ 25/30/60fps, slo-mo @ 120/240fps
Front camera: 12MP ultra-wide, f/2.4, Smart HDR, Centre Stage; full HD @ 25/30/60fps
Audio: Stereo speakers
Biometrics: Touch ID
I/O: USB-C, smart connector (for folio/keyboard)
Battery: Up to 10 hours on Wi-Fi; up to 9 hours on cellular
Finish: Space grey, starlight, pink, purple, blue
Price: Wi-Fi – Dh2,499 (64GB) / Dh3,099 (256GB); cellular – Dh3,099 (64GB) / Dh3,699 (256GB)
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Company profile
Company name: Nestrom
Started: 2017
Co-founders: Yousef Wadi, Kanaan Manasrah and Shadi Shalabi
Based: Jordan
Sector: Technology
Initial investment: Close to $100,000
Investors: Propeller, 500 Startups, Wamda Capital, Agrimatico, Techstars and some angel investors
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4.30pm Conditions Dh250,000 1,400m
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The biog
Nickname: Mama Nadia to children, staff and parents
Education: Bachelors degree in English Literature with Social work from UAE University
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SUZUME
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The five pillars of Islam
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Paatal Lok season two
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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MATCH INFO
Norwich 0
Watford 2 (Deulofeu 2', Gray 52')
Red card: Christian Kabasele (WatforD)
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