[World Tax News] UAE Releases Public Consultation on Implementation of Global Minimum Tax and More

Editorial Team – [2024] 160 taxmann.com 580 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. UAE releases public consultation on implementation of Global Minimum Tax

The UAE Ministry of Finance has issued a public consultation to know the views on the Global Minimum Tax or Global Anti-Base Erosion Model (Pillar Two) (GloBE) Rules approved by the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS). The objective of this consultation is to gather the views of stakeholders with respect to the potential policy design options to respond to the implementation of the GloBE Rules worldwide.

The submissions will help inform the UAE Ministry of Finance on domestic implementation issues, such as interactions with the UAE’s corporate tax system and ways to minimize compliance costs, while exploring the policy options for potential implementation of the GloBE Rules.

This consultation paper is split into the following documents and sections –

(a) Consultation questionnaire

This will cover the following areas:

(i) Pillar Two implementation in the UAE covers GloBE implementation, the design of a potential UAE DMTT and administration matters.

(ii) Substance-based incentives

(b) Guidance Paper

A separate Guidance Paper has been prepared alongside the consultation questionnaire, which provides details on the specific aspects of the GloBE Model Rules.

The Ministry of Finance welcomes comments on this consultation by April 10th, 2024.

Source: Public consultation by UAE Ministry of Finance on Global Minimum Tax

2. OECD publishes report on the design of Presumptive Tax Regimes for Small Businesses

The Organisation for Economic Co-operation and Development (OECD) has released a working paper on structuring presumptive tax systems.

Presumptive tax systems, also known as simplified tax systems, aim to lower tax compliance burdens for small and micro businesses, as well as reduce enforcement costs for tax administrations, while imposing a reduced tax load compared to standard tax systems.

This paper consolidates comprehensive data on presumptive tax systems across various OECD and non-OECD nations, identifies shared practices among the countries surveyed, and offers numerous instances of effective strategies found within these systems. These instances can offer direction to policymakers and tax authorities in enhancing specific aspects of presumptive tax systems within their jurisdictions.

Additionally, the paper outlines common challenges observed in the studied presumptive tax systems, which may hinder their role in encouraging business formalization and enhancing tax compliance over time.

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