- The UAE has recently introduced a Corporate Tax rate of 9% that applies to profits exceeding AED 375,000.
- According to an article from Arabian Business, the UAE and the wider GCC region are set to experience a surge in specialized accounting firms.
- We reached out to Hany Elnaggar, an Associate Tax Partner at WTS Dhruva, to gain insights into outsourcing opportunities in the UAE.
UAE to witness an inflow of Specialized Accounting Firms
The UAE has introduced a Corporate Tax rate of 9% applicable to taxable profits exceeding AED 375,000.
According to an article published by Arabian Business, the UAE, along with the wider GCC region, is poised to witness a significant surge in specialized accounting firms.
This surge is expected to grow, as the deadline of January 2024 for the implementation of the global minimum tax (GMT) approaches, as mandated by the members of the bloc.
Consequently, an influx of overseas accounting and auditing firms, as well as professionals, is anticipated in the region.
We spoke to Hany Elnaggar, a leading tax expert and Associate Tax Partner at WTS Dhruva in the Middle East and GCC region, to understand his views.
Outsourcing opportunities in the UAE
“Outsourcing is not a new concept in the UAE,” says Hany.
However, the availability of outsourcing opportunities depends on the specific company or firm and its requirements.
In some cases, certain tasks or functions can be outsourced. For example, you can outsource work to someone in India.
Especially during the COVID-19 pandemic, we have seen increased automation by most tax authorities in the GCC and Middle East countries.
As everything becomes more online-oriented, you can perform tasks from any country.
Companies and taxpayers can extract financial or accounting data online and share it for necessary reconciliations or work. Additionally, filings can be prepared and submitted online.
In some instances, physical presence in the country may be required, such as for client meetings, working with management, or fulfilling strategic or advisory roles.
These aspects need to be considered in combination.
I have observed many outsourcing services for VAT filings in the UAE, and I believe the same trend will continue for filing annual Corporate Tax.
However, for the assessment phase, I haven’t seen any specific markets being outsourced yet.