Regular readers of this column will have noted how I often use value added tax, or VAT, as a relative reference tool when explaining the impact of corporate tax.
Today, let’s look at where they tug in different directions for the same thing.
First up, revenue.
A UAE company, be it an onshore or offshore entity, buys a digital asset in the UK. It then sells that digital asset to a customer in Canada.
That digital asset is not a service – it’s a good. Remember, under tax law, it can only be one or the other.
Why is it a good? It has intrinsic value. Its title is transferable. It can be clearly identified, and an owner can exercise their right to it legally.
As the digital asset was created in the UK, unless it was formally exported, customs declared and paid, it remains there. Most likely, perpetually.
However, from a UAE VAT perspective, it does not qualify as a vatable supply. The sale of the good does not occur in the UAE. If all this business did was sell these UK-sourced digital assets, it could not even register for VAT on reaching the threshold turnover of Dh187,500 ($51,055).
From a corporate tax perspective, it’s all very different. The entity’s turnover is just that, regardless of where it occurs. That the purchase and sale occur outside the UAE is irrelevant. It is qualifying revenue for corporate tax.
Whether or not it would constitute revenue that would be taxable at 9 per cent or 0 per cent is a different discussion and would require much more information.
Please note that we continue to await nearly two dozen cabinet decisions, which include one or more on transfer pricing. This will be particularly essential reading for any international trading entity.
It is interesting that there are solutions being peddled today in the marketplace, when there is so much law yet to be released. This, before we even consider the interpretations of what has been released, much of it partial and subject to clarification.
Why is what constitutes revenue important? At some time in your corporate future, you will have an audit. One of VAT. Another one for corporate tax.
While they will be similar in nature, they are looking for and at different things. This is where understanding how your finance department functions becomes very important.
Your core working accountants come in two forms. Those, for example, who numerically count the quantity of items in stock are the financial accountants. Secondly, there are the accountants who tell you that those numbers are practically incorrect and, more importantly, why. These are the management accountants.
It is the latter, with their specific experience in providing information in several forms to data-hungry stakeholders, who will bear the burden of delivering auditors' requests.
Here is a real-world example. A financial institution, as part of its KYC – know your customer – process, asks for financials, profit and loss, and VAT returns. It’s not easy trying to explain why your revenue for both disagrees.
Next, we’ll look at counting the cost when supporting documentation is lost. I’ve worked in entities here in the UAE that have suffered document loss. A fire can be particularly devastating, given how susceptible paper is.
With VAT, you no longer have proof to support your claim of input or charged tax. That is 5 per cent on the net value of the invoice lost. With corporate tax, unable to justify the allowable expense, you lose the full amount.
In case you were wondering, you do not get to deduct from the same supplier invoice twice. Your corporate tax calculation will ignore VAT.
It is worth noting that Saudi Arabia’s move to e-invoicing, something that is likely to migrate to neighbouring countries on satisfying their requirements for proof of concept, will solve many issues business owners do not know they even have, such as audits by government-mandated bodies.
One final observation: it is currently possible to pay your VAT liability at money exchanges, so we should assume the same will be possible for corporate tax.
This is useful for those settling smaller amounts. What appears to have changed is that the named person on the trade licence must now be present, with identification.
A copy of your trade licence, VAT or corporate tax certificate and your Emirates ID are required.
In addition, you must possess the payment reference number report created on the Federal Tax Authority portal. It is one page and contains all the information required to complete the process.
In my experience, this method of settlement is very efficient and inexpensive. Do note that such payments are made in cash.
David Daly is a partner at the Gulf Tax Accounting Group in the UAE
Challenge Cup result:
1. UAE 3 faults
2. Ireland 9 faults
3. Brazil 11 faults
4. Spain 15 faults
5. Great Britain 17 faults
6. New Zealand 20 faults
7. Italy 26 faults
Sleep Well Beast
The National
4AD
The biog
Favourite book: Homegoing by Yaa Gyasi
Favourite holiday destination: Spain
Favourite film: Bohemian Rhapsody
Favourite place to visit in the UAE: The beach or Satwa
Children: Stepdaughter Tyler 27, daughter Quito 22 and son Dali 19
UAE currency: the story behind the money in your pockets
Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
UAE currency: the story behind the money in your pockets
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
Mohammed bin Zayed Majlis
UAE currency: the story behind the money in your pockets
Six large-scale objects on show
- Concrete wall and windows from the now demolished Robin Hood Gardens housing estate in Poplar
- The 17th Century Agra Colonnade, from the bathhouse of the fort of Agra in India
- A stagecloth for The Ballet Russes that is 10m high – the largest Picasso in the world
- Frank Lloyd Wright’s 1930s Kaufmann Office
- A full-scale Frankfurt Kitchen designed by Margarete Schütte-Lihotzky, which transformed kitchen design in the 20th century
- Torrijos Palace dome
Gulf Under 19s final
Dubai College A 50-12 Dubai College B
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
UAE tour of the Netherlands
UAE squad: Rohan Mustafa (captain), Shaiman Anwar, Ghulam Shabber, Mohammed Qasim, Rameez Shahzad, Mohammed Usman, Adnan Mufti, Chirag Suri, Ahmed Raza, Imran Haider, Mohammed Naveed, Amjad Javed, Zahoor Khan, Qadeer Ahmed
Fixtures and results:
Monday, UAE won by three wickets
Wednesday, 2nd 50-over match
Thursday, 3rd 50-over match
How to become a Boglehead
Bogleheads follow simple investing philosophies to build their wealth and live better lives. Just follow these steps.
• Spend less than you earn and save the rest. You can do this by earning more, or being frugal. Better still, do both.
• Invest early, invest often. It takes time to grow your wealth on the stock market. The sooner you begin, the better.
• Choose the right level of risk. Don't gamble by investing in get-rich-quick schemes or high-risk plays. Don't play it too safe, either, by leaving long-term savings in cash.
• Diversify. Do not keep all your eggs in one basket. Spread your money between different companies, sectors, markets and asset classes such as bonds and property.
• Keep charges low. The biggest drag on investment performance is all the charges you pay to advisers and active fund managers.
• Keep it simple. Complexity is your enemy. You can build a balanced, diversified portfolio with just a handful of ETFs.
• Forget timing the market. Nobody knows where share prices will go next, so don't try to second-guess them.
• Stick with it. Do not sell up in a market crash. Use the opportunity to invest more at the lower price.
RESULT
Valencia 3
Kevin Gameiro 21', 51'
Ferran Torres 67'
Atlanta 4
Josip Llicic 3' (P), 43' (P), 71', 82'
The biog
Name: Sarah Al Senaani
Age: 35
Martial status: Married with three children - aged 8, 6 and 2
Education: Masters of arts in cultural communication and tourism
Favourite movie: Captain Corelli’s Mandolin
Favourite hobbies: Art and horseback ridding
Occupation: Communication specialist at a government agency and the owner of Atelier
Favourite cuisine: Definitely Emirati - harees is my favourite dish
COMPANY%20PROFILE
%3Cp%3ECompany%20name%3A%20CarbonSifr%3Cbr%3EStarted%3A%202022%3Cbr%3EBased%3A%20Dubai%3Cbr%3EFounders%3A%20Onur%20Elgun%2C%20Mustafa%20Bosca%20and%20Muhammed%20Yildirim%3Cbr%3ESector%3A%20Climate%20tech%3Cbr%3EInvestment%20stage%3A%20%241%20million%20raised%20in%20seed%20funding%3Cbr%3E%3C%2Fp%3E%0A
Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
MATCH INFO
Who: UAE v USA
What: first T20 international
When: Friday, 2pm
Where: ICC Academy in Dubai
Brief scores:
Toss: Kerala Knights, opted to fielf
Pakhtoons 109-5 (10 ov)
Fletcher 32; Lamichhane 3-17
Kerala Knights 110-2 (7.5 ov)
Morgan 46 not out, Stirling 40
A Bad Moms Christmas
Dir: John Lucas and Scott Moore
Starring: Mila Kunis, Kathryn Hahn, Kristen Bell, Susan Sarandon, Christine Baranski, Cheryl Hines
Two stars
Moving%20Out%202
%3Cp%3E%3Cstrong%3EDeveloper%3A%3C%2Fstrong%3E%20SMG%20Studio%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Team17%3Cbr%3E%3Cstrong%3EConsoles%3A%3C%2Fstrong%3E%20Nintendo%20Switch%2C%20PlayStation%204%26amp%3B5%2C%20PC%20and%20Xbox%20One%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
