Friday, December 1, 2023

UAE's Guide on Foreign Income

The UAE's Federal Tax Authority has recently unveiled a guide that acts as a compass for companies operating within the country. Let's dive into the key points:

Purpose Unveiled: This guide serves as a beacon for companies, shedding light on the intricacies of the Corporate Tax Law. It unravels the importance of foreign income under this law and clarifies which companies need to pay taxes on income earned beyond the UAE borders. The guide also delves into the when and how of taxing foreign income, helping companies determine both their taxable and exempt income.

Who's the Guide For? If you're a company in the UAE, especially one receiving income from outside the country, this guide is your go-to. It's not a standalone document, though, so it's best to read it in conjunction with other tax laws and advice provided by the Federal Tax Authority.

2. Norway's Progressive Move: A Global Minimum Tax

Norway is taking a significant leap toward ensuring fairness in global taxation for large multinational enterprises. Here's the comprehensive breakdown:

Norway's Strategic Move: On November 24, 2023, the Norwegian Government presented a groundbreaking proposal to the Parliament. This proposal aims to implement globally agreed-upon rules regarding a minimum tax that large companies should pay. The initiative stems from long-term collaboration on an international scale within the OECD Inclusive Framework, a cooperative body comprising over 140 member countries and jurisdictions.

Decoding the 15% Rule: Norway is set to enforce a minimum tax rate of 15% on profits earned by international companies with consolidated group revenues exceeding EUR 750 million. This concerted effort is designed to thwart profit-shifting tactics and ensure a fair tax contribution from these large entities. The rules, crafted through extensive collaboration with over 140 jurisdictions, will come into effect in Norway from January 1, 2024.

3. Malaysia's Generosity: Tax Incentives for Food Production

In a bid to encourage and support food production projects, the Malaysian Inland Revenue Board has rolled out tax incentives. Here's an in-depth look:

Tax Breaks for Food Projects: Malaysia is extending a generous hand to approved food production projects, offering a substantial tax exemption. Here are the details:

  • New Projects: If your food project is a newcomer, you're in for a treat with a complete 100% tax exemption for the initial 10 years!
  • Expanding Projects: Even if your project is expanding, you still get to enjoy a full 100% tax exemption for the first 5 years!

Approved Projects Encompass:

  • Cultivation of crops, fruits, and herbs
  • Aquaculture
  • Rearing of animals like cattle and goats
  • Deep-sea fishing ventures
  • Beekeeping endeavors
  • Cultivation of special feed
  • High seas fishing initiatives
  • Planting seeds for agro-food

The commencement dates for these tax breaks vary based on the project type, and you can find the specifics in the Public Ruling. Consider it a fiscal incentive to cultivate and grow more food projects in Malaysia.