Suleman Mulla’s Post

Saudi Arabia’s Tax Policy in Relation to Egypt Indeed, the landscape of tax transformation is undergoing significant shifts worldwide, with jurisdictions like Egypt and Saudi Arabia leading the charge. In Saudi Arabia, the launch of the Strategic Tax Initiative marks a pivotal moment, poised to revolutionize business dynamics with unprecedented precision. Among the notable developments is the enactment of the RHQ Zero tax rate law, signaling a bold step towards fostering an environment conducive to investment and economic diversification. Read more.. English: https://lnkd.in/dAzSMkpR Arabic: https://lnkd.in/d7XtiVU3 #andersenEgypt #andersen #lawfirm #taxfirm #financialadvisory #lawyers #egypt

As a financial manager who is very interested in taxation and its ramifications, I found the recent case involving Emerging Capital Partners Kenya (ECP Kenya) and the Kenya Revenue Authority (KRA) to be quite informative. A substantial tax demand totaling KES 773.8 million was filed against ECP Kenya in relation to the 2017 sale of the well-known restaurant chain Java House. The crucial aspect of the case concerned how the proceeds from the sale were classified and taxed. ECP Kenya contended that rather than being subject to corporate income tax at 30%, revenue from private equity funds should be regarded as investment income, as is in other jurisdictions, and subject to capital gains tax, which is lower. However, the Tax Appeal Tribunal ruled against this argument, emphasizing that if parliament intended to exempt private equity funds from taxation, nothing would have been easier than stating so. Is it important to conduct regular tax health checks to ensure compliance with applicable laws and regulations? Is that why the tax firms charge an arm and a leg to perform such audits? https://lnkd.in/d-yfgxTh

From Compliance to Advantage: The Power of Tax Strategy for Saudi Arabia’s Investors 🇸🇦 In Saudi Arabia, mastering tax compliance is more than just a legal necessity—it's a strategic advantage. Key areas like Withholding Tax (WHT), Permanent Establishment (PE) taxation, and Transfer Pricing offer opportunities to optimize your tax efficiency while ensuring you stay on the right side of the law. 🔍 Withholding Tax (WHT): WHT applies to payments made to non-residents for services, royalties, and more. Proper management of WHT obligations can prevent costly penalties and improve cash flow—essential for sound financial planning. 🏢 Permanent Establishment (PE) Taxation: For foreign investors, understanding PE taxation is crucial. Establishing a PE can trigger corporate tax liabilities, but by proactively assessing and structuring your operations, you can minimize unexpected tax exposure. 💼 Transfer Pricing: Adhering to Transfer Pricing regulations ensures that intercompany transactions meet the arm’s length principle, reducing the risk of tax adjustments and disputes with authorities. 🌍 Double Taxation Treaties (DTTs): Saudi Arabia’s extensive DTT network, including treaties with the UAE, India, and the UK, is designed to help investors avoid double taxation, reduce WHT rates, and maximize tax efficiency. Strategic use of these treaties can optimize your global tax position. 🔗 Conclusion: By effectively managing WHT, PE taxation, and Transfer Pricing, and leveraging DTT benefits, investors can turn compliance obligations into strategic advantages—reducing tax liabilities and enhancing profitability in Saudi Arabia. #TaxStrategy #SaudiArabia #WHT #PETaxation #TransferPricing #DTT #Investment #TaxCompliance #BusinessGrowth #investsaudi

Bahrain is unlikely to introduce corporate tax in the near future, as it seeks to maintain its competitive advantage over Gulf rivals. This insight comes from discussions with the kingdom’s Minister of Finance, as highlighted by Nabil Khoury, Managing Partner at Sovereign Trust Consultancy. While Bahrain’s economic situation remains unique, several factors contribute to this strategic decision: ◾ High Debt-to-GDP Ratio: With the highest debt-to-GDP ratio in the GCC, some experts argue that Bahrain may eventually need to implement a corporate tax to bolster its financial standing. ◾ Immediate Future: Khoury confirmed that, according to the Minister of Finance, Bahrain will not be forced to adopt a corporate tax soon. However, there is no guarantee against future implementation. ◾ Population Considerations: Bahrain’s small population of fewer than 2 million people makes it an exception in the region, which may influence its tax policy as it aligns with OECD global minimum tax rules. ◾ Investment Competitiveness: The country is striving to remain attractive in the Gulf’s growing investment landscape, especially against neighbors like Saudi Arabia and the UAE, which are advancing their corporate tax frameworks. ◾ Recent Tax Developments: Bahrain recently introduced a 15% tax targeting large multinational companies with revenues exceeding €750 million, set to take effect in January. However, this tax applies specifically to larger corporations, leaving the zero-tax regime for smaller businesses intact—an advantage that continues to draw interest. ◾ Shifts in Business Migration: Some business owners from the UAE are exploring the possibility of relocating to Bahrain to avoid the Emirates’ 9% corporate tax, further emphasizing Bahrain’s appeal. Despite these factors, some experts caution that a broader corporate income tax may be inevitable. Recent proposals in parliament to introduce corporate tax legislation indicate that the concept is under consideration. As Bahrain navigates its fiscal landscape, it will be intriguing to observe how its strategies evolve in response to both local and global economic pressures. #Bahrain #CorporateTax #GulfEconomy #Investment #BusinessStrategy #OECD #Taxation #MiddleEast #Finance #Economy #TaxPolicy #BusinessMigration #EconomicDevelopment #GCC #FinancialStrategy #TaxTrends

Bahrain is unlikely to introduce corporate tax in the near future, as it seeks to maintain its competitive advantage over Gulf rivals. This insight comes from discussions with the kingdom’s Minister of Finance, as highlighted by Nabil Khoury, Managing Partner at Sovereign Trust Consultancy. While Bahrain’s economic situation remains unique, several factors contribute to this strategic decision: ◾ High Debt-to-GDP Ratio: With the highest debt-to-GDP ratio in the GCC, some experts argue that Bahrain may eventually need to implement a corporate tax to bolster its financial standing. ◾ Immediate Future: Khoury confirmed that, according to the Minister of Finance, Bahrain will not be forced to adopt a corporate tax soon. However, there is no guarantee against future implementation. ◾ Population Considerations: Bahrain’s small population of fewer than 2 million people makes it an exception in the region, which may influence its tax policy as it aligns with OECD global minimum tax rules. ◾ Investment Competitiveness: The country is striving to remain attractive in the Gulf’s growing investment landscape, especially against neighbors like Saudi Arabia and the UAE, which are advancing their corporate tax frameworks. ◾ Recent Tax Developments: Bahrain recently introduced a 15% tax targeting large multinational companies with revenues exceeding €750 million, set to take effect in January. However, this tax applies specifically to larger corporations, leaving the zero-tax regime for smaller businesses intact—an advantage that continues to draw interest. ◾ Shifts in Business Migration: Some business owners from the UAE are exploring the possibility of relocating to Bahrain to avoid the Emirates’ 9% corporate tax, further emphasizing Bahrain’s appeal. Despite these factors, some experts caution that a broader corporate income tax may be inevitable. Recent proposals in parliament to introduce corporate tax legislation indicate that the concept is under consideration. As Bahrain navigates its fiscal landscape, it will be intriguing to observe how its strategies evolve in response to both local and global economic pressures. Looking for more insights on Bahrain's evolving tax landscape? Contact our team for expert advice! Email: [email protected] Phone: +973 33832422 Website: https://fin-soul.com #Bahrain #CorporateTax #GulfEconomy #Investment #BusinessStrategy #OECD #Taxation #MiddleEast #Finance #Economy #TaxPolicy #BusinessMigration #EconomicDevelopment #GCC #FinancialStrategy #TaxTrends

With my experience working with startups and entrepreneurs in Iraq, I often hear complaints like, "The government takes a high rate of taxes, which is making our businesses fail and not supporting our operations!" While I am very supportive of Iraqi entrepreneurs—and consider myself one of them—I want to share a brief comparison of tax rates in a few other countries. What I aim to highlight is that perhaps the issue isn’t solely the tax burden, but rather the lack of reliable and convenient sources of funding and loans to support business growth. 1. Corporate Tax Rates: Iraq: Corporate Income Tax: The general corporate tax rate in Iraq is 15% for most businesses. However, for oil and gas companies, the rate is 35%. Italy: Corporate Income Tax (IRES): The standard corporate tax rate in Italy is 24%. * Regional Tax (IRAP): There’s also a regional tax on productive activities, which is around 3.9%, depending on the region. United Kingdom: Corporate Income Tax: The UK corporate tax rate is 25% for businesses with profits exceeding £250,000. For profits between £50,000 and £250,000, businesses are taxed on a sliding scale. For small businesses with profits below £50,000, the rate is 19%. 2. Value Added Tax (VAT) and Similar Taxes: Iraq: Iraq does not have a VAT system like most other countries, but there are consumption taxes on specific goods like tobacco and alcohol. There is no general sales tax applied to businesses. Italy: VAT: The standard VAT rate in Italy is 22%, but reduced rates of 10%, 5%, and 4% apply to certain goods and services. United Kingdom: VAT: The UK’s standard VAT rate is 20%, with reduced rates of 5% and 0% for certain goods and services. Summary of Corporate Tax Burden: Iraq: Corporate tax rates are relatively low at 15%, but specific sectors like oil and gas have higher taxes. The lack of VAT and lower social security contributions make Iraq’s overall tax environment lighter compared to Italy and the UK. Italy: While corporate tax rates are moderate at 24%, the additional regional tax of 3.9% and high social security contributions place a heavy burden on businesses. The 22% VAT adds another layer of cost. UK: The UK has a competitive corporate tax rate of 19%-25%, depending on business size, and a 20% VAT. National insurance contributions are more moderate compared to Italy, but dividend taxes can be high. #businessdevelopment #tax #entrepreneurs #startup #iraq #italy #uk

**KSA tax reflections continued…🚨** Following on from my previous post, I wanted to elaborate on the issues arising when an offshore structure falls within the KSA tax net and the importance of local expertise. As best practice, an offshore structure typically includes a top fiduciary vehicle (such as a Trust or Foundation) followed by several layers of underlying companies. This setup is common and can be advised on by most offshore advisers (corporate service providers, lawyers, tax advisers, etc.). However, I’ve recently encountered numerous such structures where all of the directors are KSA residents and board meetings occur solely in KSA. When I flag this to clients, it’s surprising how often they are comfortable with the structure potentially becoming liable to KSA taxes, assuming the tax exposure is zakat at approximately 2.5% (given zakat also fulfills a religious obligation, which KSA clients are eager to meet correctly). The issue arises when I explain that the tax implications are far more complex due to a lack of consideration for local rules and regulations. Broadly if a corporate is owned by non-KSA/GCC persons (which is often the case with offshore structures), it could be subject to corporate income tax at 20%, not zakat at 2.5%. Additionally, both zakat taxpayers and corporate income taxpayers fall within KSA transfer pricing rules. In short, 20% tax exposure and not 2.5%, but also additional requirements to disclose transactions across the structure—often contrary to the objectives for undertaking such planning. #privateclient #wealthstructuring #UHNWI #familyoffice #offshore #assetprotection #successionplanning #wealthpreservation

With This Guide, You Will Learn How To Identify A Deferred Tax Liability Under IAS 12. From our example, we notice that the profit according to the company is 50,000 FRS, and according to the tax authorities, it is 47,500 FRS. Now, imagine that the tax rate is 30%. Expected tax expenses: Under the company’s perspective, it will be 50,000 FRS × 30% = 15,000 FRS. Under the taxation authority’s perspective, it will be 47,500 FRS × 30% = 14,250 FRS. Now, you can notice that the company will pay less tax in this particular year. If yes, then you will understand that the extra tax that was supposed to have been paid is 750 FRS. This extra tax will be the deferred tax liability, and the following journal entry will be made: Debit: Income tax expense by 750 FRS Credit: Deferred tax liability by 750 FRS Why are we doing this? Understand that the initial tax expense of 15,000 FRS was determined after taking into consideration all the expenses and income that was realized by the company in that particular year, following the matching principle. You have to understand that companies use accrual accounting, whereas the tax authorities use cash accounting. Now, you agree with me that the extra 750 FRS should be matched with the accounting year in which it occurred, which is why there is a need to record a deferred tax liability. In the case of Cameroon, most companies have aligned their depreciation rates, so there will not be any deferred tax liability caused by depreciation rate differences. Hope this explanation was straightforward and easy to grasp. A question: How can I easily identify a deferred tax asset? Good question! This will be discussed in my next post. For now, digest this straightforward explanation, and don’t forget to like, comment, and share. Feel free to provide more insights in the comment box or answer the question asked before the release of my next post. I’m here to serve the LinkedIn community with IFRS knowledge! #ACCA #Tutor #IFRSExpert #ACCAStudent #IAS12 #DeferredTax

Our Founding Partner, Thomas Vanhee, comments on the UAE’s new 15% DMTT in Khaleej Times On December 11, 2024, the Khaleej Times published an article discussing the recent updates made by the UAE Ministry of Finance (MoF) regarding the implementation of a Domestic Minimum Top-up Tax (DMTT) on multinational enterprises. Our founding partner, Thomas Vanhee, along with other tax professionals, shared his expert insights on the far-reaching implications of this transformative tax policy in the UAE. Thomas emphasized that the new DMTT applies to all companies operating internationally. On the other hand, domestic companies are excluded from the scope of the UAE’s DMTT. He also pointed out that a number of exclusions are included at the level of Global Anti-Base Erosion (GloBE) Rules. Notably, under Pillar Two legislation, exclusions apply to government entities, investment funds, real estate investment trusts and entities controlled by those companies or passive entities. Thomas further recalled that the GloBE Rules, including the DMTT, are part of an OECD/G20-led agreement endorsed so far by 145 countries, some of which have already begun implementing it in 2024. Because of the agreement’s global reach, Thomas predicted that, in the near future, almost all countries will likely have a bottom limit of 15% as the minimum Corporate Tax (CIT) rate. The UAE’s announcement follows the precedent legislation set by Bahrain and Qatar earlier this year, and we expect other Gulf nations to follow. Saudi Arabia, in particular, is expected to announce similar initiatives in the coming months. As the UAE continues to align with global economic dynamics, the introduction of the DMTT signals a pivotal shift in the nation’s corporate taxation strategy. This move is aligned with broader tax reforms across the GCC, reflecting a new phase in the region's approach to fostering transparency and competitiveness. For more details, please visit the article here: https://shorturl.at/yECj8. If you would like to know more about this news, you can find our previous post here: https://shorturl.at/NhuiA #UAE #CorporateTax #UAETaxPolicy #GlobalTaxReform Stay ahead in the tax landscape with our Newsletter: https://shorturl.at/fnaVc. Get the latest GCC tax updates directly to your inbox!

💡Tax Insights Dear Professionals,👨💻 As a matter of popularity, we seem to know the Company Income Tax, Withholding Tax, Value Added Tax, Personal Income Tax, however there are other taxes/levies payable by companies.. Let us discuss a few additional levies that may not be as widely recognized but nevertheless have significant tax implications for businesses operating in Nigeria. 🎯NATIONAL AGENCY FOR SCIENCE AND ENGINEERING INFRASTRUCTURE LEVY (NASENI LEVY): 👉Applicability: This levy targets commercial companies in specific sectors (banking, mobile communication, ICT, aviation, maritime, and oil & gas) with annual turnovers exceeding ₦100 million. 🪀Rate: The levy is computed at 0.25% of the company's Profits Before Tax. 🎯NIGERIA POLICE TRUST FUND LEVY (NPTF LEVY): 👉Applicability: This levy is imposed on all companies operating businesses in Nigeria.The FIRS is responsible for administering and collecting the NPTF levy. 🪀Calculation: The levy is charged at 0.005% of a company's net profit, typically calculated based on Profit Before Tax. 🎯NATIONAL INFORMATION TECHNOLOGY DEVELOPMENT LEVY (NITDA LEVY): 👉Applicability: This levy affects companies with an annual turnover of N100 million or more. 🪀Rate : The levy is calculated as 1% of the company's Profit Before Tax. 🗄Filing Requirements: The 3 levies are filed along with CIT returns within six months after the company's financial year-end. 📣Professional Advice: Consult with a tax professional to ensure accurate calculations, timely filings, and compliance with tax laws. 🙏I will appreciate if you can share the post with other professionals for more awareness. 🛡P.S. – Write-ups are mine and intended to provide a general guide to the subject matter as this do not constitute professional advice from any organization I am affiliated with. Best regards, Connect with Olamide Olaniran ACA for more insightful post. Have a great week!