Latest news with #corporateTax
BBC News
10 hours ago
- Business
- BBC News
Outgoing Guernsey chief minister warns over corporate tax changes
Guernsey's next assembly should not make big changes to the island's corporate tax regime, the outgoing president of Policy and Resources (P&R) has warned. Deputy Lyndon Trott OBE led the campaign to introduce the zero-10 programme in 2008, which means some companies pay no corporation tax and others pay 10%.A number of candidates for the 2025 general election have said Guernsey should move to a zero-15 system or adopt a territorial corporate income tax scheme. "I caution the next States against doing anything unilaterally, only move when those of other size and status are willing to do the same," warned Trott. Proposals to change the island's corporate tax system were rejected on a number of ocassions during the last political States decided eventually to adopt a package of tax reforms, including a 5% GST, a lower income tax rate for earnings under £30,000 and reforms to social security contributions. In a wide-ranging interview with the BBC, before he leaves local politics on 30 June, Trott declared the changes to corporate tax in 2008 were the "biggest challenge" he had said the "damage that we would have done to our community, to our economy, would have been enormous" if the island had not voted for zero-10. Tax rises 'not heresy' Despite the States having agreed to introduce a GST, alongside other tax reforms, Trott suggested the States should look at other changes to make the island's tax system more progressive. He said: "I'm someone who thinks that we pay far too little in terms of income tax. I pay 20%. If 20% means 20% to me, I'd be very happy to pay 22% or even 25%. "There are colleagues of mine who throw their hands up in horror. It's heresy to speak in this way."Deputies rejected proposals from Trott for a temporary increase in the rate of income tax from 20% to 22%. "I genuinely believe in a progressive tax system," commented Trott."In other words, those who can afford to pay should pay. However, we absolutely can't touch the way we treat capital." Covid under-investment When confronted about why zero-10 had not led to greater economic growth, Trott complained that the island had "under-invested" in its infrastructure for "too long".He said: "Part of the problem was Covid. We ran down our reserves during Covid substantially. "We were lucky to have them. And we transferred £150m to support our community from our reserves."During the pandemic, as Vice-President of Policy and Resources, Trott was in charge of the financial support for businesses. He said: "It was essential. "But that is money that we would otherwise have invested directly into our infrastructure, which would have created a far more positive economic downturn than the one we've had."So I'm sort of hiding behind that."He blamed the lack of investment on infrastructure on the island's tax take. He said: "We take something like 21.5% of our GDP in tax. "Jersey takes 26%, the Isle of Man 29% and the UK is nearly 40%. So we are at the very bottom of that league table."
Zawya
a day ago
- Business
- Zawya
Oman's income tax: A strategic test of fairness and fiscal vision
Oman stands at a pivotal juncture in its fiscal evolution—where traditional oil revenues alone can no longer guarantee long-term sustainability, and where new financial tools are needed to anchor the state's ambitions under Vision 2040. Among the reforms under consideration, personal income tax remains one of the most consequential, though still subject to timing and public readiness. This is not about immediate implementation, but about preparing the groundwork for a modern taxation system that reflects the Sultanate's strategic maturity. Income tax, if introduced thoughtfully, represents more than just a new revenue stream. It embodies a shift in how a nation defines shared responsibility. In Oman's case, the proposed structure is highly selective—targeting only individuals with net annual earnings above RO 30,000, who represent a narrow segment of the population. The rate under discussion is a modest 5 per cent, placing Oman well below global tax averages. This approach ensures that those who have benefitted most from the country's economic system contribute a fair share, without burdening the broader population. It's a move rooted in equity, not austerity. The income tax proposal also signals the government's intent to close systemic loopholes that have enabled high-income individuals to shield earnings under corporate structures, avoiding the 15 per cent corporate tax. These practices, though technically legal, erode trust in the tax regime and weaken the state's fiscal base. A personal income tax helps balance the system—ensuring that revenue flows are not distorted by creative accounting or structural arbitrage. It complements other reforms, including VAT and customs adjustments, which aim to diversify income without compromising fairness. For foreign investors, the tax carries little to no direct impact. Oman has signed comprehensive double taxation agreements with key trading partners, meaning any tax paid in Oman reduces liabilities elsewhere. Moreover, the tax applies to individuals—not corporations—so the fundamentals that attract foreign capital remain intact. Contrary to alarmist narratives, the policy has been designed with competitiveness in mind, ensuring that Oman continues to offer one of the region's most stable and attractive investment climates. The most critical variable now is timing, not design. The government has made clear that income tax will only be enacted when conditions are favourable—when digital systems are in place, when enforcement is consistent, and when public understanding is sufficient to support the transition. This caution reflects lessons learned from international experiences: rushed implementation of tax reforms can backfire. Oman's methodical pace is a sign of policy prudence, not hesitation. VISION 2040 REQUIRES BOLD BUT BALANCED MOVES Oman's Vision 2040 aspires to a knowledge-driven, diversified economy. That ambition demands a stable fiscal platform—and that, in turn, requires a broad-based contribution model. Relying solely on oil or VAT is not sustainable. Income tax, even in its limited proposed form, is a strategic bridge toward long-term resilience. Moreover, by taxing only the wealthiest, the state affirms its commitment to social equity, while signalling to international partners that it is serious about transparency, governance, and economic discipline. While technical preparations continue, what is equally important is a national conversation around the role of tax in state-building. Citizens must see taxation not as a cost, but as an investment in shared prosperity. To win trust, future tax policy must be paired with clear communication, visible results in public services, and mechanisms for accountability. A fair tax system is not just about rates—it's about how the money is spent, and whether it improves lives. Income tax in Oman is not yet a reality—but it is on the horizon. When it arrives, it will do so as part of a larger national transformation: from a rentier state to a participatory economy. If implemented with foresight and fairness, it will mark a new chapter in Oman's fiscal independence. This is less about taxing wealth, and more about laying the foundation for a modern, accountable state—one where every rial paid is a step toward national strength.
Irish Times
04-06-2025
- Business
- Irish Times
Dublin paid half of State's 2024 income tax while Cork delivered most from corporates
Dublin accounted for the more than half the income tax and VAT receipts collected by Government last year while more than half of the State's record corporate tax take emanated from Cork. The Parliamentary Budget Office (PBO) has published a new 'interactive dashboard' that provides a more detailed breakdown – by economic sector and county – of the Irish tax base. It shows that €16.2 billion of PAYE income tax in 2024, out of total of €29.6 billion, was paid by workers in Dublin. Consumers in the capital were also responsible for the lion's share of VAT receipts, paying €11.7 billion out of the €20.5 billion total collected from the sales tax. READ MORE Cork, however, was responsible for €21.4 billion of the State's record €39 billion corporate tax haul last year. The €39 billion included €11 billion of the Apple tax money, covering most of the money owed as a result of a high-profile European court ruling last September, plus Apple's annual corporate tax liability for 2024. The iPhone maker Cork's campus serves as its European headquarters and employs over 6,000 people. The company is the biggest payer of corporate tax in the Republic. Dublin was responsible for €14.1 billion of corporate tax in 2024, meaning Dublin and Cork combined made up €35.5 of the €39 billion total in business tax receipts collected last year. The next biggest county was Galway with €405 million. On a sector-by-sector basis, the PBO's dashboard shows the wholesale and retail trade sector accounted for the biggest lump of corporate tax receipts at €16.2 billion followed by manufacturing (€9.5 billion); information and communication (€6.2 billion); and financial and insurance activities (€4 billion). While much has been made of the State's lopsided corporate tax base, with just 10 firms providing more than half the receipts, the PBO's data show the same multinational-dominated sectors (wholesale and retail, manufacturing, information and communication and financial and insurance activities) accounted for €13.5 billion of the €29.6 billion paid in PAYE income tax last year. The purpose of the dashboard 'is to present net tax receipts data published by Revenue Commissioners in a visual and interactive manner,' the PBO said. 'In doing so, it aims to enhance members' and committees' understanding of tax revenues which are used to fund public services,' it said. A previous report by the PBO, which acts as the parliament's budgetary oversight body, showed the top 8 per cent of earners in Ireland account for more than 54 per cent of the income tax paid to the State.
The National
26-05-2025
- Business
- The National
UAE corporate tax: Can charging different prices for the same product impact liability?
As June approaches, we are four months from the filing deadline faced by the majority of the country's businesses. Of course, it would be far better for everyone concerned if they didn't wait until the final weeks to file returns. Hundreds of thousands of entities trying to submit documents at the same time might cause a strain on the online systems that must be used to complete the process. Having managed many corporate tax returns already, the one element confusing people the most is arm's length trading. While I have written about elements of transfer pricing in the past, the subject is so broad that it could have its separate regular column. Today, I want to address the topic from two fronts. Firstly, explaining what it is and why it matters. Secondly, with so many people and their businesses moving to the UAE, why these types of migration come with their own compliance frameworks. Yes, very often it's plural. An arm's length transaction means the seller would charge the same price to all buyers. This is where the goods or services are of the same value and volume for all purchasers. Delivery can be anywhere in the world. For simplicity, imagine that the seller faces no competition. You either purchase from this entity or go without. That means it is extremely difficult to conceive of a circumstance where there would be different pricing for different people. I hear you say: 'How about if it's a family member or close friend? Am I not allowed to sell my wares for whatever price I like?' Interestingly, you are. Unless it's a legislated government-controlled item and there are few of these. While you can set whatever price you like to whomever you like, for tax purposes, the regulatory authorities want to be assured that you are not setting the price with an objective of gaining a tax advantage. Therefore, in your reporting, you would need to account for any changes in pricing driven by familiarity with one or more customers so that your UAE tax liability is not affected. How is that done? My advice is not to do it in the first place. If reviewed in an audit, this type of activity will raise questions that will remove you from driving your business forward. You might understand how trading with family members is a regulated space, but at what level of relationship does a friend get covered by the same requirements? To avoid doubt, a relation is anyone from great grandfather to great grandchild, and an individual to their second cousin twice removed. That said, what is the equivalent measurement for friends? I have not been able to find anything specific, however, transactions might be challenged if discrepancies in pricing are discovered and it is found that two parties know each other. Where ambiguity like this is found to exist and the amounts are sufficiently material, it would likely be inevitable that the matter might end up in court, with an adjudication being made in adherence to the spirit of the law. On to our second topic. An individual with an existing business in Europe has decided to move to the UAE. The intent is to replicate the operation of the original company. The first emigration is that of the business owner. For tax purposes, you cannot simply leave one country, particularly where you are a national, and move to another. There are rules and processes, coupled with much careful planning that is required to minimise having to satisfy two nations' reporting regimes simultaneously. While the foundational rules for this are reasonably similar in approach by most countries, there can be variability and continuing evolution. For example, when moving to the UAE, how many days of a tax year have you spent in the country you are leaving before you can avoid being a tax resident in that year? A potential second emigration is that of your business. This occurs if you seek to close the existing one and open it in the UAE. That will likely be deemed a sale. Sometimes the old business continues, there might be employees and certain customers who refuse to move, while a carbon copy is set up in the UAE. It's inevitable that some trading among the entities, management and operational staff will be shared and you have to now prove that transactions are being conducted at arm's length plus a connected party operating in two jurisdictions. This can be very messy. Get help.
The National
25-05-2025
- Business
- The National
What is the new UAE tax option for unincorporated partnerships?
The UAE's Ministry of Finance on Saturday issued a Cabinet decision to introduce an option for tax treatment for unincorporated partnerships. The federal Decree-Law No (47) of 2022 on the taxation of corporations and businesses gives unincorporated partnerships – businesses partnerships that are not registered as separate companies – the option to be treated as a taxable person with prior approval by the Federal Tax Authority (FTA), state news agency Wam said, quoting a ministry statement. The move is part of efforts to 'enhance tax transparency' and improve the UAE's business environment, the report said. 'This Cabinet decision provides businesses with much-needed certainty. The flexibility to choose how to be taxed aligns with international practices and supports smoother implementation of the corporate tax law,' Anurag Chaturvedi, chief executive of financial advisory Andersen UAE, told The National. The UAE introduced the federal corporate tax with a standard statutory rate of 9 per cent starting from the financial year beginning on or after June 1, 2023. It took the income of companies exceeding Dh375,000 ($102,100) within the taxable bracket. Business owners in the country would be subject to corporate tax only if their turnover in a calendar year exceeds Dh1 million, the ministry said at the time. The decision announced on Saturday is intended to clarify the tax options available to unincorporated partnerships. These are business partnerships that are not registered as separate legal entities, such as limited liability companies or corporations. Examples include joint ventures or professional service firms, like law or audit partners, that are operating under a partnership agreement without incorporation. The law applies to people or entities who are part of unincorporated partnerships in the UAE. Examples include two consultants operating under a profit-sharing agreement, a group of real estate agents or doctors working as a partnership and foreign partnerships with a UAE-sourced income, Dhruv Tanna, associate vice president at DIFC-based investment and wealth management firm PhillipCapital, said. Under the new law, unincorporated partnerships now have the option to be taxed as a company, rather than individual partners separately paying corporate tax on their business incomes. 'Upon approval of the application by the partners, the unincorporated partnership will be regarded as a legal person and a resident person for tax purposes,' according to the Wam report. 'It will receive the same tax treatment as other legal persons.' The move aims to 'promote tax neutrality' by allowing unincorporated partnerships to benefit from the exemptions and reliefs available to legal persons under the corporate tax law, it said. The new decision aims to clarify how unincorporated partnerships are taxed and provide them with flexibility on how they choose to be taxed, analysts say. The ministry's decision also makes doing business in the UAE easier. 'It gives businesses a clear framework and flexibility in how and when they want to be taxed at the partnership level and not as per their individual share of income,' Mr Chaturvedi said. 'This flexibility gives businesses the ability to choose what's most efficient for them, based on their structure and long-term plans.' Mr Tanna said this flexibility 'can make things easier for some businesses, especially those with many partners or complex structures, by simplifying reporting and allowing access to certain tax benefits'. 'It doesn't necessarily raise costs but gives partnerships the choice to manage their tax obligations in a way that suits them best,' he added. The partners may choose this option if it simplifies tax filing for multiple partners and if the partnership wants access to corporate tax exemptions or reliefs, Mr Tanna said. They may also take this option if they want clearer liability separation for legal or financial reasons. 'For example, a partnership with many foreign or corporate partners may benefit from streamlined reporting by being taxed as one entity,' he said. Opting in to treat the partnership as a taxable person also makes sense if the partnership wants centralised compliance, a cleaner capital structure – such as for external investors – or if it is simpler to have the firm handle tax instead of each partner individually, Mr Chaturvedi said. If the partners are taxed individually, each pays the UAE corporate tax of 9 per cent on their share of the business profits. This does not include unrelated personal income like salary from another job or investment income, unless it's linked to the partnership, Mr Tanna said. If the partnership opts to be treated as a single taxable entity, the partnership itself pays 9 per cent corporate tax on its taxable income – just like a company.
