The UAE has been ranked at 74th position in the list of 94 countries, in terms of complexity of accounting and tax compliance. China stands at the first position, while Cayman Islands (ranked at 94th) continuous to be the least financially complex country in the world. The said Financial Complexity Index was released by TMF Group, a global provider of accounting, tax, HR and payroll services.
The UAE is close to being among the world’s top 20 countries with the least complex finance (tax and accounting) system.
However, the data shows that the UAE has fallen from its last year’s ranking of 92. The rise in complexity can be mainly attributed to the introduction of the VAT in January this year. “The VAT is a fundamental change to the way businesses operate locally.
The transaction tax is embedded in virtually all functions of a company; from sales contracts to accounting and bookkeeping. So it is an important one for businesses to document and report correctly,” said Jonathan Wheeler, TMF Group’s regional director for Middle East and Africa.
TMF’s survey included 94 jurisdictions across the Middle East, Asia Pacific, Africa, Europe and the Americas, with the most complex jurisdiction ranked at first.
Wheeler further added that the UAE continues to remain one of the least complex financial regions globally and a very popular choice for international business. “While the UAE may not be on our ‘top 5 easiest’ list in this year’s Financial Complexity Index, it remains at 74th, one of the less complex jurisdictions globally for accounting and tax compliance – and a very attractive market for business.”
A ranking released by the real estate consultancy Knight Frank confirms that the UAE may soon become one of the top 20 countries in the world in terms of “ease of doing business”. The country has moved 5 ranks up from its last position and is now the 21st top choice for business.
In a recent survey held by the United Nations Council for Trade and Development (UNCTAD) and Investment Promotion Agency (IPA) Observer, the UAE was ranked 13 in terms of Most Promising Home Economy for Investment in 2017-19.
“When it comes to cross-border business success, knowing and understanding the local requirements for financial compliance can prove vital. Seeking the support of in-country experts, such as TMF UAE, allows companies of all sizes to maintain focus on their core business,” said Juraj Gerzeni, TMF’s head of EMEA.
He added that the companies in the UAE and Saudi Arabia are still going through the adjustment period. As the remaining 4 GCC countries implement the VAT, rules for inter GCC transactions will become more clear.