GCC Tax Inform: Bahrain and UAE joined Inclusive Framework on BEPS

PUBLICATIONS / Articles / 2018 / GCC Tax Inform: Bahrain and UAE joined Inclusive Framework on BEPS
On 11 May and 16 May 2018 Bahrain and the UAE have joined the Base Erosion and Profit Shifting (BEPS) Inclusive Framework.  Being associates of BEPS IF the states need to implement the minimum standards of the BEPS Plan.

The minimum standards consist of measures against harmful tax practices (Action 5), model provisions against treaty abuse (Action 6), implementing a country-by-country reporting scheme (Action 13), and enhancing dispute resolution via Mutual Agreement Procedure (Action 14).

Countering harmful tax practices
This includes stressing on required substantial activity for any favoured regime and on improving transparency. Hence, requiring more transparency on Bahraini- and UAE-based entities.

Model provisions against treaty misuse
This will be implemented by meeting international standards and signing essential conventions.

Realizing a country-by-country reporting scheme
For compliance with a country-by-country reporting scheme, there might be new legislation. AT the moment Bahrain and the UAE do not have transfer such legislation.

Improving dispute resolutions
Bahrain and the UAE will have to collaborate with other jurisdictions to coordinate the execution of the minimum standard on dispute resolution. Hence, facilitating access to adequate and convenient mechanisms under bilateral tax treaties.

What will bring such amendment to taxpayers?
They will be subject to reporting and compliance requirements in Bahrain and the UAE. Therefore, it might occur in the revision of the structures and preparations adjusting toward international standards.

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