Ruling on Attribution Taxation: Implications for Foundations in non-EU Countries Adjusting the Application in Light of Free Movement of Capital

Looking closer at the VAT regulations effective since November 2024 that alter the treatment of multi-component supplies, impacting various industries

The FTA, in collaboration with the Ministry of Finance, has initiated a temporary waiver of these penalties. This initiative encourages voluntary compliance and provides a grace period for entities to fulfill their tax obligations without incurring fines.

Tax audits in the UAE often trigger apprehension among businesses due to the country’s rigorous tax compliance regime. This article outlines the legal foundation of tax audits under UAE law, delineates the rights of both the Federal Tax Authority (FTA) and taxpayers, and provides strategic guidance for businesses to prepare effectively. Emphasizing readiness, procedural awareness, and system reliability, the article aims to foster a proactive compliance mindset among UAE-based enterprises.

The guide reflects the UAE’s intention to bring its corporate tax regime in line with international best practices, particularly the OECD’s BEPS (Base Erosion and Profit Shifting) framework, specifically Action 4, which addresses excessive interest deductions. Companies are well advised to incorporate these rules into their tax planning strategies to avoid adverse consequences and to benefit from the flexibility that the legislation offers when applied correctly.