Strategizing International Tax Best Practices – by Keith Brockman

Posts tagged ‘MENA’

Kuwait: 100% FDI regime

The recent issue of PwC International Tax News highlights a recent development for taxpayers operating in Kuwait whereby they can retain 100% ownership rights.  This is a significant development in the Middle Eastern region signaling the foreign direct investment initiatives elicited by the Kuwaiti administration.

Click to access pwc-international-tax-news-april-2015.pdf

Additionally, the new regime introduces income / customs tax benefits that can be availed of.

Tax and customs tax incentives are of growing importance around the world.  MNE’s should have a proactive structure in place that focuses attention on these opportunities.  Most importantly, tax and customs should be integrated re: tax disputes and appeals in the future coupled with the initial attraction of tax savings.

MENA Regional Profile 2014: World Bank Report

The World Bank and the International Finance Corporation collaborated in providing a 2014 Doing Business Report for the Middle East and North Africa (MENA) Region.  A link to the report is attached for reference:

Click to access 834130DB140Mid0Box0382128B00PUBLIC0.pdf

Key observations:

  • Ease of Doing Business: UAE and Saudi Arabia were first (23) and second (26), while Libya rated 187th of 189 economies.
  • Total Tax Rate measures corporate income tax, social contributions and labor taxes, property taxes, dividend, capital gains and financial transaction taxes, waste collection, vehicle, road and other taxes.  Qatar, Kuwait, Bahrain, Saudi Arabia, UAE, the West Bank and Gaza all had a total tax rate less than 20%, while Tunisia was 62.4% and Algeria 71.9%.  The MENA Regional Average total tax rate was 32.3%.
  • Egypt made paying taxes more costly by increasing its corporate income tax rate.
  • Recent years have seen a reduction in Yemen’s corporate income tax from 35% to 20%, while UAE and Saudi Arabia have introduced online filing and payment systems for social security contributions.

The MENA Region is a significant area of focus for many MNE’s , with this report showing the tremendous progress and large gaps between countries in this interesting region.

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