UAE corporate tax: Why it is crucial for businesses to collaborate

As human beings, we are inherently social creatures. We naturally gravitate towards one another when we share common ideals and needs. This is evident in the formation of national trade bodies, not only in the UAE , but also in countries worldwide. In certain countries, these trade bodies extend their reach by forming industry groups, which operate horizontally across various sectors. Despite being competitors, members of these industry groups come together to address shared trading challenges and potential external changes that could negatively affect the industry . However, one common oversight among these groups is the failure to collectively analyse and comprehend new regulatory frameworks. This reluctance may stem from a fear of inadvertently aiding their competitors. This is a pity because the combined experiences and expertise would benefit all. Fear is a significant obstacle that hinders supportive networks from fulfilling their intended purpose. Some individuals may doubt the ability of others to contribute equally, or they may lack the necessary skills to make a meaningful impact. Corporate tax in the UAE, now four months into its second year, remains an extremely complex puzzle with so many details unknown. In the next five months, the first reporting entities must submit their annual accounts and settle any outstanding payments. Businesses should at least be working on getting their accounts in place at this point. Additionally, many businesses may not have considered how the multitude of regulations released by various authorities can affect their operations. In some cases, participants may need a refresher on the available information before engaging in joint sessions, while others may require remedial corporate tax classes. This situation can feel reminiscent of being back in a nursery school setting. For those who have studied collaboration between competitive parties, the concept of game theory will be familiar. However, for those unfamiliar with this field, the film A Beautiful Mind , which won four Academy Awards in 2001 and starred Russell Crowe as Nobel-winning economist John Nash, provides insight into the creation of this area of study. If learning from the shared experiences of many cannot be found in traditional collaborative groups, where do entities willing to engage in these forums turn? Complex entities operating across multiple sectors face the greatest challenges in this regard. This was evident even before the launch of VAT in 2018. Seven years on, these entities must rely on their corporate memory to navigate the complexities of corporate tax. The challenges faced by such entities are vast. Operating in numerous markets means being subject to a wide array of legislation. To put it into perspective, it's akin to being afflicted with a multitude of contemporary diseases and being prescribed a mix of all relevant medicines at the pharmacy. Not everything will necessarily work well together or be suitable for the intended purpose. In the ever-evolving landscape of legislation, potential contradictions may arise in the future. However, our focus today should be on tackling the complex task of solving the five-dimensional Rubik’s cube that represents the multifaceted nature of our current business environment. For many professionals seeking solutions, there exists a third option that holds promise. In today’s commercial realm, where outsourcing non-core functions is a common practice, the key to finding solutions lies within the arcologies that house a diverse array of industries. Accounting, human resource management, IT and legal services are among the external partners that businesses often turn to for support. While some providers may specialise in specific industries, HR and legal is where this is most likely. Just as X, formerly known as Twitter, serves as a hub for the exchange of opinions, your outsourced partner can become a central point of interaction for businesses of all sizes and sectors. This convergence of diverse businesses creates a fertile ground for the sharing of questions, strategies and innovative ideas. Over the past year and a half, many of the articles I have written have been inspired by enquiries from the businesses I engage with. Analysing, comprehending, and interpreting complex corporate tax laws is just the initial step towards finding a solution. The subsequent step involves applying the same level of scrutiny to your business operations, taking into account your future objectives. For these foundational steps to be effective, a bridge must be built between them. This bridge is formed by aligning the tax legal framework with your business activities and plans. It is crucial to understand these elements in conjunction with each other, as isolating one from the other can be counterproductive. If you are a member of a business community, it is advisable to explore the support and resources it can provide. Collaboration and co-operation within these communities can lead to greater success, as we are more likely to achieve our goals when we work together harmoniously. David Daly is a partner at the Gulf Tax Accounting Group in the UAE

UAE corporate tax: Why it is crucial for businesses to collaborate

By tapping into diverse sources of knowledge and expertise, entities can better navigate the complex landscape of regulatory compliance