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Navigating uncertainty and adapting to a new normal
The TP landscape has changed and evolved significantly in the last 12 months. With an increasing number of Middle East countries introducing TP legislation, TP is becoming complex and critical for businesses in the region. This growing complexity for groups operating in the Middle East (both headquartered in the region and elsewhere) has made tax authority disputes on TP (‘TP controversies’) a reality in many multinational groups’ day-to-day business.
92%
feel that TP as a concept is important to their group
77%
believe there is more certainty in the international tax and TP environment.
81%
have a strategy to preparing TP documentation but the approach varies significantly.
53%
expect changes to TP policies or the introduction of new transactions due to COVID-19.
The combination of extensive new compliance requirements, a refresh of business models becoming a necessity in the era of Covid-19 and the beginning of TP controversies means that today TP in the Middle East is no longer a tax related afterthought, but instead, is a fundamental pillar of tax and business strategy for most groups.
In the last year, we have seen the following key developments in the region:
On a global level, we also saw the G20/OECD Inclusive Framework continue its work addressing tax challenges in the digitalised economy and more recently the finalisation of the OECD paper on Financial Transactions.
What does this all mean for multinationals in the region? We decided to ask the multinationals themselves. We asked over 50 questions to tax and TP professionals with responsibilities in the region on a variety of topics from BEPS related issues, TP controversy and litigation, country specific topics to managing the TP function, the role technology plays and the impact of Covid-19. We have analysed and provided our thoughts on the responses within this report.
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