Editorial Team – [2023] 156 taxmann.com 71 (Article)
World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.
1. Federal Tax Authority of the UAE Releases a Guide on Transfer Pricing
On October 23, 2023, the UAE Federal Tax Authority (FTA) released the Corporate Tax Guide focusing on Transfer Pricing. This guide aims to offer comprehensive guidance regarding the Transfer Pricing framework in the UAE, aiming to simplify the Transfer Pricing regulations for readers. It equips readers with:
(i) Insight into the Transfer Pricing regulations and processes, encompassing the identification of Related Party transactions, the assessment of transactions for compliance with the Arm’s Length principle, and other associated compliance obligations such as Transfer Pricing documentation and
(ii) guidance on addressing common queries that businesses may encounter, aimed at minimizing uncertainties for Taxable Persons when applying the Transfer Pricing provisions of the Corporate Tax Law.
(a) For whom is this guide intended?
This guide is meant for individuals and entities, whether legal or natural persons, seeking to gain a better understanding of the Transfer Pricing system in the UAE. It is recommended to be perused in tandem with the Corporate Tax Law, its implementing decisions, and any additional pertinent directives released by the FTA.
Source: Corporate Tax Guide on Transfer Pricing
2. UAE Releases a Corporate Tax Handbook Regarding Exempted Income, Covering Dividends and Participation Exemptions
The UAE Federal Tax Authority (FTA) released the Corporate Tax Guide, focusing on Exempt Income, specifically Dividends and Participation Exemption. The guide’s objective and intended audience can be outlined as follows:
(a) Objectives of the guide
This guide has been crafted to offer Taxable Persons comprehensive assistance in comprehending the exemptions outlined in the Corporate Tax Law concerning Dividends and various forms of profit distributions, including the Participation Exemption.
The Participation Exemption excludes particular income streams, such as Dividends and capital gains, from Corporate Tax obligations, provided that a Taxable Person maintains a substantial and enduring ownership stake in a legal entity. Within this guide, explanations of specific terminologies and provisions within the Corporate Tax Law have been dealt with, encompassing the following areas:
(i) The precise definitions of Dividends and other forms of profit distributions.
(ii) The scope of income (and its associated expenses) that qualifies for exemption within a Participation.
(iii) Eligibility criteria for individuals or entities seeking this exemption.
(iv) A comprehensive explanation of the mechanics governing the Participation Exemption.
(v) Implications tied to Tax Groups and their relevance in this context
(b) For whom is this guide intended?
This guide is intended for individuals and entities subject to taxation who receive Dividends from a Resident legal entity and income or gains arising from a Participating Interest. Taxable Persons encompass legal entities and natural individuals, provided that the income does not fall under the category of Personal Investment income. It is essential to read this guide alongside the Corporate Tax Law, implementing decisions, and any additional pertinent directives issued by the FTA.
Source: Corporate Tax Guide on Exempt Income: Dividends and Participation Exemption
Click Here To Read The Full Article
The post [World Tax News] Federal Tax Authority of the UAE Releases a Guide on Transfer Pricing and More appeared first on Taxmann Blog.
