The United Arab Emirates (UAE) is among the 20 least complex jurisdictions in the world for accounting and tax compliance, according to TMF Group’s Financial Complexity Index 2018.
The global business and compliance services provider has ranked 94 jurisdictions across Europe, the Middle East, Africa, Asia Pacific and the Americas; one being most complex through to 94 the least complex.
The UAE came in at 74th, indicating an increase in complexity since its 2017 inaugural ranking of 92. China is at number one, while the Cayman Islands at 94 is once again the least complex jurisdiction for financial compliance.
To determine the rankings with its in-country experts, TMF Group used a 74-question survey with weighted complexity parameters, namely; regulatory compliance, tax, statutory reporting and bookkeeping.
“The UAE’s rise in complexity this year is largely driven by the introduction of the emirates’ first VAT in January 2018. The VAT is a fundamental change to the way businesses operate locally. The transaction tax is embedded in virtually all functions of a company; from sales contracts to accounting and bookkeeping. So it’s an important one for businesses to document and report correctly. “While the UAE may not be on our ‘top 5 easiest’ list in this year’s Financial Complexity Index, it remains at 74th, one of the less complex jurisdictions globally for accounting and tax compliance - and a very attractive market for business,” said TMF Group’s Regional Director, Middle East and Africa Jonathan Wheeler, commenting on the AUE’s ranking.
Juraj Gerzeni, Head of EMEA, added that the adjustment period for companies operating in the UAE – and Kingdom of Saudi Arabia – is very much ongoing, as four Gulf Cooperation Council countries are yet to implement the VAT. When they do, special rules for inter GCC transactions will begin to apply.
“When it comes to cross-border business success, knowing and understanding the local requirements for financial compliance can prove vital. Seeking the support of in-country experts, such as TMF UAE, allows companies of all sizes to maintain focus on their core business,” said Gerzeni.