UAE Country by Country Reporting Update
The Ministry of Finance (MOF), UAE amended the Country by Country Reporting (CbCR) with the following effect.
- Filing is restricted to MNE groups headquartered in the UAE
- No secondary or surrogate filing by the Constituent Entities is permitted, other than by Ultimate Parent Entities.
- Amendments apply for all reporting years starting January 1, 2019.
What is Country by Country(CbC) Requirements in the UAE:
Country by Country Reporting requirements applies to the UAE-headquartered MNE Groups with ‘financial reporting years’ starting on or after January 1, 2019, if the consolidated group revenue in the preceding financial year is AED 3.15 billion or more. CbC report should include the following information such as; revenues, profits, employees count, business description, etc. and should be reported under three tables:
- Table I – This contains the quantitative information per tax jurisdiction such as third party and related party revenues, stated capital, taxes accrued and paid, employee count, etc.
- Table II – This contains the qualitative information per constituent entity on the main business activities undertaken during the year.
- Table III – This contains any additional information necessary to facilitate the understanding of Tables I and II (e.g., assumptions on exchange rates, source of data, etc.)
The purpose of CbC Reporting is to eliminate any gap in information between the taxpayers and tax administrations regarding the information on where the economic value is generated within the MNE Group and whether it matches the allocation of profits and taxes paid on a global level.
“MNE Group” means any Group that includes two or more enterprises where the tax residence for each is in different jurisdictions or includes an enterprise that is resident for tax purposes in one jurisdiction and is subject to tax with respect to the business carried out through a permanent establishment in another jurisdiction, and
The following would be considered as Constituent Entity:
- a separate business unit of an MNE Group that is included in the Consolidated Financial Statements of the MNE Group for financial reporting purposes, or would be included if equity interests of the business unit of an MNE Group were traded on a public securities exchange;
- any such business unit that is excluded from the MNE Group’s Consolidated Financial Statements solely on size or materiality grounds; and
- any permanent establishment of any separate business unit of the MNE Group included in the above provided the business unit prepares a separate financial statement for such permanent establishment for financial reporting, regulatory, tax reporting, or internal management control purposes.
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Senior Manager (Indirect Tax)