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Thriving Through Seven: The journey of MS Beyond Seventh and further!

Thriving Through Seven: The journey of MS Beyond Seventh and further!
Thriving Through Seven: The journey of MS Beyond Seventh and further!

#MSBeyondSeventh

In the quiet corridors of a tiny one-seater office situated in Abu Dhabi Mainland, we started our journey in 2017. MS or being fondly called Team MS – A journey filled with trials, setbacks, and moments of doubt. Yet, from the very confines of that first office, we dared to dream, to strive, and to endure. With seven years under our belt, we have mastered the art of excellence. From managing compliance to crunching numbers and staying ahead in tax and tech, we’ve got it down pat. 

Our story 

Back in 2015, our Founder C A Mohammed Shafeek, took a leap of faith. He left his tax and advisory job at a UAE-based company to chase his dream: building a tax and business advisory firm focused on helping entrepreneurs and businesses thrive. Fast forward to today, and we’ve got a dedicated team ready to support our clients anywhere across the globe, every step of the way. 

Starting from our modest roots in Abu Dhabi, MS embarked on a journey of growth and expansion. With each step forward, we navigated the obstacles with determination, expanding our world to the ADGM and MASDAR in 2022 and to DMCC jurisdiction in 2023. The journey from Abu Dhabi mainland to ADGM jurisdiction was not just a progression of location, it is a story of resilience, obstacles overcome, and the relentless pursuit of excellence to meet market demands.

Not only has MS garnered numerous industry awards and expanded our client base, but we’ve also actively participated in and celebrated our clients’ achievements, fostering mutual success. By providing sound advice and timely insights, we’ve helped them make the right decisions at the right time. It’s been a joyous journey celebrating these achievements together over the past seven years.

2023: A Year of Triumphs and Transformations

“Reflecting on our journey through 2023, we’ve demonstrated resilience, turning challenges into opportunities and reaching milestones together. As we celebrate our 7th Anniversary in March 2024, we’re excited about the developments ahead, all aimed at serving our GCC market with excellence. Let’s unite and channel our energies towards nurturing growth and success together in the coming years”.

Our Founder and Group CEO C A Mohammed Shafeek

MS kicked off 2023 with a resounding triumph: our entrance into the prestigious DMCC jurisdiction in Dubai. This marked the first of many milestones as we continued our journey toward excellence. Swiftly followed by the momentous launch of our R&D Hub in India, further solidifying MS’s commitment to innovation and global reach.

Progressing further, MS made waves at the Hub71 event. Our Founder and Group CEO C A Mohammed Shafeek stood out as a true leader during the interactive session on Corporate Tax in the UAE, showcasing his impressive knowledge and expertise. 

We seized a fantastic opportunity to sponsor and launch the Midfield Community Cup 2023, here in UAE, where we proudly served as the title sponsor.

Adding to our string of successes, MS clinched the prestigious Finnext Award 2023 for Kitaab and MS, recognizing us as an innovative company in finance. This remarkable achievement marked the first accolade of the year.

To our surprise, a tribute video which was a product of our Marcom team, created for ADGM’s 8th anniversary gained notable recognition from the ADGM authorities. Witnessing the video being played in the ADGM atrium by none other than the ADGM CEO marked a groundbreaking moment for MS, showcasing our impact and significance within the industry.

Remarkable final quarter of 2023: “Hayyakum” Abu Dhabi Finance Week to Cop28

As part of our ongoing vision, MS launched its significant initiative, phase one of ‘Hayyakum: To Your Destiny’, a week-long event aimed to offer valuable insights to the Abu Dhabi business community, regarding the expansion of Al Reem Island. Furthermore, MS has solidified its media presence by successfully collaborating with Times Network to capture the essence of ADGM and AD Financial Week 2023. It has been immense for us to explore and showcase the vibrant landscape of opportunities emerging from this thriving hub, propelling us into new realms of growth and prosperity.

A significant milestone in MS’s journey unfolded in 2023 with the partnership forged alongside the Global Alliance for a Sustainable Planet (GASP), marking a monumental step towards global climate action and sustainable development. The announcement of this partnership gained widespread attention at the COP28 UAE event. It’s moments like these that underscore MS’s commitment to driving positive change and shaping a more sustainable future for all.

As we reflect upon the journey that unfolded, we find ourselves standing at the intersection of accomplishment and introspection, poised to embrace the lessons garnered from both triumphs and tribulations. 

Our visionary future

We know each business is like a unique puzzle, that needs to be crafted and tailored based on the client’s requirements. So, we MSians dive in, work together, and tailor strategies that fit just right. At MS, our clients reign supreme, serving as the cornerstone of our growth, evolution, and unparalleled success. We are making our vision clear and broad as we step into this new phase. You might wonder, what’s our focus? It’s all about accelerating our growth in where we work and what we offer. In this seventh year, we aim for progressive global growth, delivering top-notch solutions across different regions and industries. With MS’s remarkable jurisdictional expansion, burgeoning client base, and numerous successes, we stand poised and eager to extend our exceptional service to DIFC, a testament to our unparalleled growth and dedication.

As we set sail into our seventh year, ‘MSBeyondSeventh’ becomes more than just a tagline; it’s a profound tribute to our origins nestled in the heart of the seven Emirates, The UAE. It encapsulates our journey, not merely spanning seven years, but transcending boundaries, propelling us towards boundless success and unprecedented growth. It symbolizes our collective aspiration to venture beyond the familiar, forging a path toward a future rich with promise and achievement.  As we step into this thrilling new chapter, we embark on a journey pulsating with innovation, growth, and a profound reverence for our roots. Here’s to ‘MSBeyondSeventh’ and the limitless possibilities that await us on the horizon!

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News & Press Releases

Non-Dom Tax in the UK Repealed: Global Impact on the UAE and Beyond

UK's non-dom tax repealed: UAE welcomes influx of High-Net-Worth migrants
UK's non-dom tax repealed: UAE welcomes influx of High-Net-Worth migrants

Jeremy Hunt, United Kingdom’s chancellor of the Exchequer, shook up headlines with a game-changing move in the Spring Budget – waving goodbye to the non-domiciled tax regime in the UK and unveiling an exciting, revamped ‘tax holiday’ for those making the move to the kingdom. The significant transformation is likely to impact not just the UK tax system but also other tax-friendly nations, including Western European jurisdictions such as Greece, Malta, and Ireland, as well as countries in the MENA region.

Before that, let us journey through the story of the epic non-dom tax.

Tracing the history of non-dom tax in the UK

The origin of the non-dom tax regime can be traced back to the inception of income tax in 1799 when residents were solely taxed on income earned abroad if it was received within the country. This marked the introduction of the ‘remittance Basis’ of taxation, a concept that underwent modification in 1914, restricting eligibility to residents not domiciled or ordinarily resident in the UK. The ‘remittance Basis’ regime, utilized by non-domiciled individuals, has largely retained its core principles since the 1900s, with significant reforms in 2008 and 2017. Despite these changes, the fundamental principle persists that non-doms are only taxed on overseas income and capital gains to the extent that funds are brought into or used in the UK. Since 2017, non-domiciled individuals have had the option to elect for the remittance basis of taxation for 15 years. Beyond this period, they are treated as ‘deemed domiciled’ for tax purposes, and subjected to worldwide taxation. However, a non-dom can establish a non-UK trust before the 15-year term expires, theoretically exempting the trust from UK tax concerning non-UK sources. The concept that one’s domicile should determine their tax assessment is unusual. Domicile, inherited from one’s father at birth, is often considered an outdated and complex concept. In recent years, Her Majesty’s Revenue and Customs (HMRC) has increased inquiries to ascertain non-UK domicile status, revealing a degree of subjectivity in the assessment process.

But now the non-dom tax has been phased out and the recent changes have introduced new players into the game.

UAE’s attraction for global migrants: A boon amidst UK tax reforms

With its tax-friendly regime, the UAE is emerging as an irresistible destination for high-net-worth individuals (HNWIs), promising both fiscal efficiency and a top-notch quality of life. The UAE’s magnetic appeal is drawing UK millionaires and professionals with its blend of lower living costs, enticing salary benefits, economic stability, and global hi-tech prominence. Offering long-term residence visas, a high quality of life, and public safety, the UAE stands out as the ideal destination. Meanwhile, the UK grapples with a 50 percent surge in living costs, triggering an exodus of HNWIs. The Henley Private Wealth Migration Report 2023 predicts the loss of 3,200 more HNWIs in 2023, adding to the 12,500 already departed between 2017 and 2022.

Also, the UAE’s real estate sector is set to flourish, fuelled by UK nationals contributing 21.2 percent to international property transactions in 2023. As Abu Dhabi emerges as a bridge between East and West, UK entrepreneurs flock to set up businesses, injecting diverse investments into the thriving UAE economy. This shift signifies the UAE’s ascent as the top choice for migration, driven by economic growth, political stability, and abundant job opportunities. The existing English Common Law system of ADGM in Abu Dhabi can also be an add-on to the migrants for seamless shifts. The traditional allure of the UK, especially London, for migrating millionaires has waned in the face of Brexit and the declining importance of the London Stock Exchange. Being a solution for that, the UAE stands as a global financial hub, beckoning with unprecedented opportunities for these migrating individuals.

Crafting strategies in the face of changing tax landscapes

The impending non-dom tax changes hold substantial implications, particularly for clients in the MENA region, with a specific emphasis on the UAE. Individuals in the UAE and elsewhere should assess their UK residence intentions and seek professional advice to proactively plan for these tax adjustments. Keep in mind that these changes might continue to evolve, especially with the upcoming UK general election set before January 28, 2025, which precedes the implementation of most of these rules by April 2025.

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Elevating your business with ethical leadership through advanced Executive Search

Elevating your business with ethical leadership through advanced Executive Search
3d magnifying glass team leadership red blue

Hiring a C-suite talent for your business can have effects on the future of your growth. Companies select executives in different situations based on their unique needs. When considering the need to bring in an executive, there are various positive scenarios to explore. For instance, your company might be in a phase of expansion or establishing a new department, requiring the recruitment of a capable leader. Additionally, forward-thinking businesses often engage in succession planning to ensure a smooth transition in leadership.
Conversely, the situation takes a more challenging turn when the objective is to replace an underperforming leader, either in the process of being terminated or already dismissed. In such instances, the focus shifts to finding an executive with an optimal skill set to not only address the existing issues but also propel the company forward, recapturing momentum and advancing towards its objectives.
But what if the unethical behavior of the leader is the reason for the replacement. Ethics-driven terminations highlight the need for executives with a strong ethical foundation in the recruitment process. Finding leaders with the right skills and unwavering ethical principles sets the stage for outstanding results and long-term success. Trustworthy leaders prioritize moral integrity, putting others first and avoiding unethical behaviour even in challenging situations.

Qualities of an Ethical Top-notch Leader

  1. Honesty as a Foundation: Ethical leaders prioritize honesty in their actions and communications. While not obligated to divulge every detail, they avoid bending the truth or evading direct answers. Striking a balance between transparency and discretion is key, and consistent dishonesty raises a red flag.
  2. Respect Across Hierarchies: Recognizing that organizational charts are social constructs, ethical leaders treat every individual with respect. Whether engaging with interns, IT department members, or fellow C-suite executives, they uphold a culture of respect, understanding the intrinsic value of each team member.
  3. Leading Through Example: Ethical leaders don’t merely delegate tasks; they lead by rolling up their sleeves and actively participating. While delegation is necessary, demonstrating a willingness to be on the frontline inspires others to follow suit. Leading by example fosters a sense of unity and commitment within the team.
  4. Compassion in High-Stakes Decision-Making: Ethical leaders navigate the complexities of leadership with a compassionate approach. In making tough decisions driven by budgets or personnel management, they remain empathetic to the individual experiences of their team members. This blend of analytical prowess and emotional intelligence creates a supportive work environment.

How MS can aid you in placing an ethical leader for your business:

MS can provide unparalleled expertise and support to meet your executive talent needs, ensuring a seamless and strategic hiring process. We collaborate closely with your organization to understand its unique culture, goals, and leadership requirements. Our proven track record in working in various industries can attract top-tier executive talent. MS ensures the selection of individuals who not only possess the requisite skills and experience but also align with your company’s vision and values. From initial candidate sourcing to final onboarding, our end-to-end solutions streamline the hiring journey, saving your valuable time and resources. Trust us to be your strategic partner in securing the executive talent essential for propelling your company towards sustained success and grow

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Blogs

AI in Mergers & Acquisitions: A paradigm shift in streamlining deals for success

AI in Mergers & Acquisitions: A paradigm shift in streamlining deals for success
Imagine stepping back into the not-so-distant past, a time when Mergers and Acquisitions (M&A) were complex, and solved by people armed with experience and gut feelings.

Imagine stepping back into the not-so-distant past, a time when Mergers and Acquisitions (M&A) were complex, and solved by people armed with experience and gut feelings. Deals with every move carefully planned, and success often hangs in the balance of unpredictable market shifts. It was the era of handshakes and late-night strategy sessions – a world where human touch reigned supreme in the business tango.

Now, fast forward to the present, the global AI market is on a roll, growing at a breathtaking pace – from $100 billion to a projected $2 trillion by 2030. The M&A game is changing, and the change is powered by artificial intelligence. It’s not about replacing the old guard but about joining forces, creating a dynamic duo of human expertise and digital precision. The skeptics are slowly turning into believers, and the confidence in companies using AI to up their game is skyrocketing – 65% and counting.

Our story is about this shift, this evolution in the world of M&A. It’s about moving from handwritten contracts to computer-generated insights, from gut feelings to algorithmic precision.

The evolution in M&A Processes:

Analyzing data from financial statements and market trends to identify a target is a critical and time-consuming task in M&A. However, AI tools have streamlined and simplified this process by efficiently analyzing large volumes of data in a shorter time frame. This approach not only enhances efficiency but also proves to be a cost-effective method. Furthermore, AI contributes to cost reduction in various M&A activities by minimizing the reliance on manual labor.

When it comes to due diligence, a significant stage in M&A has undergone automation with the advent of AI tools. Tasks such as document analysis and review, traditionally reliant on human involvement, are now entirely dependent on AI. This shift not only diminishes the likelihood of errors or oversights but also results in significant time savings. For both buyers and sellers, the precise risk assessment facilitated by AI aids in making well-informed decisions regarding their deals.

In the realm of post-merger integration, the landscape has been transformed by the infusion of AI automation. Tasks such as data migration, employee onboarding, and process standardization now benefit from advanced tools that meticulously analyze datasets, recognizing trends, patterns, and insightful information. The incorporation of AI not only expedites the integration process but also significantly reduces errors. Beyond operational enhancements, this evolution allows for the seamless integration of strategic planning and value creation as complementary elements, enriching the overall integration experience.

Along with all these processes, ensuring legal and regulatory compliance in M&A processes is crucial but often involves significant time and costs. AI automation has simplified the task of mitigating risks by adhering to rules and regulations. AI tools now facilitate the review of contracts, legal documents, and filings, minimizing the likelihood of potential errors in the process.

Navigating the pitfalls of AI usage in M&A

Depending heavily on AI tools may undermine human capabilities, diminishing their effectiveness. Using flawed datasets can lead AI tools to draw inaccurate conclusions, raising concerns about their reliability. Also, the ethical dimension comes into play when integrating AI tools into M&A processes, particularly during due diligence. The potential for biases in language, algorithms, and sampling methods during this stage calls for careful consideration.

Your Strategic Mergers and Acquisition Partner

In the ever-evolving landscape of M&A, MS emerges as your indispensable service partner. We navigate the complexities of AI integration, ensuring your deals are not only effective but also ethical and reliable.

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How exceptional leaders prepare organizations for the AI-driven future 

How exceptional leaders prepare organizations for the AI-driven future 
How exceptional leaders prepare organizations for the AI-driven future 

In the wake of the AI revolution, our world is witnessing an unprecedented surge in technological advancements, driving artificial intelligence (AI) into the forefront of innovation. The once speculative capabilities of AI models are now unfolding rapidly, leaving us not to question what AI can do, but rather pondering what it can’t. This transformative shift assures to reshape the way we work, learn, and communicate. As organizations grapple with this inevitable technological disruption, the focus turns to leadership and organizational readiness. 

Executives are acutely attuned to the myriad opportunities that AI presents, particularly in the realm of office jobs. From machine learning and natural language processing to expert systems and generative AI, the spectrum of AI applications is vast. The key opportunities identified by leaders encompass the potential for increased efficiency through the effective use of AI, signaling a paradigm shift in workplace dynamics. Beyond efficiency gains, executives foresee enhanced decision-making, improved risk management, and the birth of innovative products and services as additional fruits of embracing AI. 

How can organizations better prepare for the future of AI? 

Leaders recognize the pivotal role they play in steering their organizations towards preparedness for the challenges posed by AI. It comes as no surprise that these leaders are actively taking steps to enhance their organizational readiness for the AI revolution. One crucial initial step leaders are taking involves sharing their personal journey of learning and understanding AI. Recognizing that knowledge is power, they understand that being well-versed in AI is essential to spearhead any transformative efforts within their organizations. Even in the face of uncertainties, leaders are embracing the idea that starting the adoption process, no matter how small, is far better than remaining inert. 

However, simply understanding AI is not sufficient. The dynamic nature of AI, with its ever-changing landscape of possibilities and risks, makes strategy development a complex task. While the disruptive potential of AI is acknowledged, leaders also see immense opportunities that come with it. Yet, a business-as-usual mindset won’t suffice for organizations aiming to thrive in the age of AI. Leaders must recognize that profound change and robust cultural development are imperative.  

To achieve organizational readiness for AI, business leaders need to act boldly and strategically. This entails gaining a deep understanding of current market capabilities and identifying potential gaps within themselves and their organizations. By doing so, leaders can pave the way for their organizations to not just adapt to AI but to flourish in this exciting era of technological innovation. 

How can MS help in identifying AI-savvy leaders: 

MS is actively involved in the identification and cultivation of top-tier leaders with a profound understanding of AI.  The team is committed to pinpointing individuals who possess the requisite expertise and visionary insight in the dynamic AI field. The company leverages its global network and platforms to connect with emerging leaders, provides them with opportunities to showcase their talents, and contributes significantly to the ever-evolving domain of AI leadership within the company. 

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Blogs

Calling Al Reem Island Businesses: Secure Your ADGM License Before Opportunities End!

Calling Al Reem Island Businesses: Secure Your ADGM License Before Opportunities End!
Calling Al Reem Island Businesses: Secure Your ADGM License Before Opportunities End!

The expansion of Al Reem Island to ADGM’s jurisdiction marks a groundbreaking moment in Abu Dhabi’s path to financial leadership. With Al Reem joining Al Maryah Island as a financial-free zone, the expansion aims to offer tax-friendly jurisdiction, attracting international companies with eligible income to establish their presence in Abu Dhabi’s expanding financial landscape. The expansion was confirmed in line with the UAE Cabinet Resolution No. 41 of 2023 on April 24, 2023, reinforcing Abu Dhabi’s economic vision, positioning ADGM as the global financial hub. 

Unlocking Opportunities: Advantages of Establishing Your Business in ADGM

Whether you are a startup looking to flourish in Al Reem Island or an established corporation seeking new opportunities, ADGM offers you the ideal environment to unlock your full potential and achieve sustainable growth. Businesses in ADGM leverage distinct advantages in the direct application of English common law, fostering legal certainty. With an array of in-house services, companies streamline operations. Digital registration simplifies setup processes, and activating the e-records, e-contracts, and e-signatures enhances working efficiency. Access to the ADGM ecosystem provides better networking opportunities and synergies, improving growth and sustainability.

Al Reem businesses: Prepare for Your 100% Fee Waiver!

The business operating at Al Reem should be conscious of the timeline and deadlines required to access ADGM’s incentives. As of now, 31st December 2024 marks the final date of the transition period for the existing Al Reem Island businesses. After the designated timeline, the existing license becomes invalid in Al Reem by 1st January 2025. Obtain the ADGM license before the deadline and consider the key dates and ADGM regulations for a smooth transition process.

The transition period marks its final expedition on 31st December 2024. Companies undergoing transition can benefit from fee waivers and incentives based on the completion of the transition process. Al Reem businesses including, healthcare, hospitality, retail, construction, real estate, professional service businesses, etc. (excluding financial services) can secure an ADGM license without any registration fee until October 31, 2024. Simply ensure your license lists an Al Reem address and has no outstanding fines.

Business Future with ADGM

MS Group offers comprehensive advisory services for new businesses seeking licenses to operate within the ADGM jurisdiction on Al Reem Island. It’s not just a jurisdictional expansion—it’s a strategic leap toward establishing ADGM as the ultimate destination for businesses worldwide. With MS Group by your side, brace yourself for a business adventure in ADGM, where opportunity and innovation converge to propel your business toward success. 

Disclaimer :

Registered in Abu Dhabi Global Market (Registered No. 000007218),
We are not an ADGM Registered Corporate Service Provider.

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UAE’s rising M&A market sparks investor interest: Explore the key steps of M&A to ensure success.

UAE’s rising M&A market sparks investor interest: Explore the key steps of M&A to ensure success
UAE’s rising M&A market sparks investor interest: Explore the key steps of M&A to ensure success


The Mergers and Acquisitions (M&A) market in the MENA region showed a huge rise in 2023. UAE reported the region’s largest M&A of the year with the announced acquisition of Univar Solutions by Apollo Global Management and ADIA for $8.2 billion. In line with this trend, 2024 is also augmenting in terms of M&A. This growth may inspire investors to think about M&A as their next business step. All you need is to brush up your understanding of M&A so the beginners can get down into this opportunity. With the new changes on the horizon, we are giving an overview of M&A and its important steps.

Why M&A in UAE?

Mergers and Acquisitions (M&A) have emerged as an essential business strategy in the ever-changing business landscape for organizations looking to grow, expand, and get a larger market share in the UAE. In the competitive market dynamics, it is important to diversify and access more talent by cutting down the combination. To flourish the business, improving the market share is also an essential factor that can give your business an upper hand. You will also be entitled to tax benefits through M&A and can also unlock synergies, which are the additional value created by transactions. M&A can always keep the success rate high if it is done correctly at the right time.

Check out the steps in M&A:

We tend to think a lot and go through a series of steps even for ordering food from a restaurant online. The steps included in M&A play a key role in tomorrow’s success of your business. Let’s glance through the steps:


 Due diligence:
It is just like how we enquire about the ratings and quality of a restaurant before ordering the food. The process of looking into a potential business, its management, its board of directors, its operations, assets, and finances is due diligence. Finding out more about the target business will enable you to make an informed decision about the acquisition. Following this step, you get a chance to determine at this point whether the acquisition is beneficial to your company or not. It is a key step in the whole M&A process.
 Negotiation:
It happens like how you see offers for food items, and unintentionally both you and the restaurant are negotiating. Here, both the company representatives will negotiate the deal and it tends to be very time-consuming.
 Signing:
In this stage, you are signing the deal like you are selecting your favorite food and adding it to your cart.
 Finalizing:
After adding the food to the cart in your online food ordering platform, you get a window where you can finalize the order and proceed. In M&A, this step is where the execution happens, and the deal proceeds further. At this point, standard legal procedures are fulfilled, including completing the purchase of assets, documenting the agreement, and due diligence of the stakeholders.
 Closing:
The actual closing of the deal happens here like how we confirm our food order. The formalities are completed from both parties and the necessary license to operate is given to the acquirer at this stage.

Why MS for M&A?

The world of M&A is complex. Even though we explained the whole M&A process in a way we order food online, at some point, you may need aid to clear your confusion and difficulties. To maximize the benefits for all parties engaged in M&A, you must do rigorous due diligence and seek professional guidance. Team MS can be your touch point to help you in successful M&A transactions by providing a seamless journey.
Please feel free to contact us with your M&A requirements.

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Blogs

Urgent Compliance Alert: Deadline Approaching for CRS/FATCA Self-Assessment in DIFC and ADGM

Urgent Compliance Alert: Deadline Approaching for CRS/FATCA Self-Assessment in DIFC and ADGM


You might be familiar with the current outreach efforts from the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), urging entities to promptly address the pressing need for compliance with the CRS/FATCA self-assessment. This latest regulatory push serves as a reminder of the crucial importance of keeping pace with the continually evolving realm of financial standards.
A Roadmap for CRS/FATCA Self-Assessment Compliance in DIFC and ADGM
The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has levied fines totaling AED 170,000 on six financial institutions due to violations of the Common Reporting Standard Regulations (CSR) 2017. This case is a true indication of how crucial is to stay informed about the latest requirements to ensure compliance in the financial landscape. Both the Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) have issued urgent directives related to CRS/FATCA self-assessment.

Understanding more about CRS and FATCA can be an add-on:

Common Reporting Standard (CRS)

Common Reporting Standard (CRS), a regulatory cornerstone developed by the Organisation for Economic Co-operation and Development (OECD) and established in the UAE in 2017 is for guiding the gathering and international exchange of financial account and tax-related information. The CRS outlines the specific parameters within which financial institutions are required to operate, defining the scope of financial information to be collected and reported. Moreover, it sheds light on the due diligence procedures these financial entities must follow.

The Foreign Account Tax Compliance Act (FATCA)

The Foreign Account Tax Compliance Act (FATCA) is a law intended to curb the practice of using offshore accounts and financial assets to evade U.S. taxes. Passed as part of the HIRE Act in 2010, FATCA requires U.S. persons, foreign financial institutions (FFIs), and other non-financial foreign entities (NFFEs) to provide the United States Department of the Treasury reporting on foreign assets or be subjected to serious penalties.

Let’s go through the requirements of both DIFC and ADGM:

Time is of the essence when it comes to compliance.

Entities in DIFC are required to complete and submit the self-assessment form to [email protected] by February 28, 2024, to avoid penalties.

If your entity was newly licensed in ADGM during 2023, the Entity Self-Certification Form (SCF) must reach [email protected] by April 30, 2024, to mitigate potential consequences.

For all the other ADGM entities, you may complete the updated SCF within the stipulated deadline informed to you by the authority.

How MS can help you for your seamless compliance with CRS/FATCA self-assessment:

Stay ahead of the curve! Our Regulatory and Compliance Assistance Team will guide your organization through all the compliance requirements detailed in the latest directives from DIFC and ADGM. Don’t hesitate to get in touch; together, let’s ensure that your entity not only fulfills but exceeds its obligations under these vital directives.
In conclusion, staying informed and compliant with the latest DIFC and ADGM requirements for CRS/FATCA self-assessment is vital for the financial growth of your entity. Act promptly, meet deadlines, and consider partnering with MS for a smooth and reliable compliance journey. Your entity’s financial well-being is our priority!

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Disclaimer:  Content posted is for informational & knowledge-sharing purposes only and is not intended to be a substitute for professional advice related to tax, finance or accounting. No warranty whatsoever is made in this regard, and it is not intended to provide and should not be relied on for tax/finance/legal/complaince advice. The content posted is subject to future amendments/changes/clarifications in the regulation by the authorities. For any clarifications, you may contact our tax team.

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Blogs

FTA Issues VAT Clarification on SWIFT Messages for Financial Sector Tax Recovery

FTA Issues VAT Clarification on SWIFT Messages for Financial Sector Tax Recovery
The Federal Tax Authority of the UAE has released VAT Public Clarification offering directives on using SWIFT messages for both VAT documentation and the recovery of input tax.

The Federal Tax Authority of the UAE has released VAT Public Clarification offering directives on using SWIFT messages for both VAT documentation and the recovery of input tax.

The UAE financial institutions are treated as engaging in self-supplies when availing of interbank services from foreign banks. This means they must handle VAT obligations as if they were the service providers, including fulfilling all tax-related duties and generating tax invoices for the services received. However, SWIFT (Society for Worldwide Interbank Financial Telecommunications) messages, commonly used to document international bank charges and their underlying transactions, might not satisfy the required criteria to be acknowledged as tax invoices for UAE VAT compliance. But On February 5, 2024, the United Arab Emirates Federal Tax Authority (FTA) issued VAT Public Clarification VATP036 that addresses the use of SWIFT messages for VAT documentation and input tax recovery, initially focusing on the Financial Services (FS) sector but potentially impacting companies across various industries.

The question is, what made FTA simplify the process?

The FTA emphasizes that due to the substantial volume of SWIFT messages received, mandating Financial Institutions to self-issue a tax invoice for each SWIFT transaction would be impractical. Hence, the FTA introduces a simplification measure. If a SWIFT message, termed a “Qualifying SWIFT message,” includes adequate information to ascertain the details of the supply, UAE Financial Institutions are exempted from self-issuing tax invoices for interbank services received from non-resident banks when such SWIFT communications are received. Consequently, for input tax recovery purposes, a SWIFT message is deemed acceptable documentary evidence if it provides the necessary particulars of the supply.

A SWIFT message becomes a ‘Qualified SWIFT’ message if it includes;

• Name and address of the non-resident bank (SWIFT sender/supplier).
• Name of the UAE financial institution receiving the service (SWIFT receiver/customer).
• Date of the transaction.
• SWIFT message reference number.
• Transaction reference number.
• Description of the transaction.
• Consideration charged, and currency used.

Let’s explore who stands to gain from this simplification;

Financial Services Sector: The provided clarification serves as a beneficial simplification for the UAE FS sector, reducing administrative burdens. Businesses within this sector need to assess whether their exchanged SWIFT messages meet the criteria of a “Qualifying SWIFT Message” to benefit from this simplification. Adjustments to existing documentation and governance may be necessary to take full advantage of this provision.

Potential Broader Industry: The FTA explicitly states in the Public Clarification that, for service imports, the recipient must issue a valid tax invoice to itself, as the VAT legislation places the responsibility for “all tax obligations” on the recipient. If this clarification is intended as a general statement, it implies that any UAE business importing services, regardless of industry, would be obligated to self-issue a tax invoice to comply with UAE VAT invoicing requirements. This additional requirement, along with reporting output tax and recovering input tax if applicable, could become standard practice for all industries. Whether this self-invoicing mandate extends beyond the services discussed in this clarification remains to be cleared, as the FTA’s practical enforcement in various industries is yet to be determined.

How can MS help you with VAT Clarification on SWIFT Messages for Financial Sector Tax Recovery?

If you are uncertain about the appropriate course of action in the use of SWIFT messages for VAT documentation and input tax recovery, seeking guidance from experts like us could be a prudent decision. There’s a risk that the government might reject your request to claim the Input VAT if the documents did not have ample information. MS can make sure that you completely adhere to the regulations and make best use of the recent simplification.

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“UAE is the perfect combination of ambition, resources, and motivation”.

UAE is the perfect combination of ambition, resources, and motivation
Check out this insightful conversation in the recently concluded COP28 between Satya S. Tripathy, Secretary-General of GASP, and MS CEO Mohammed Shafeek.

Check out this insightful conversation in the recently concluded COP28 between Satya S. Tripathy, Secretary-General of GASP, and MS CEO Mohammed Shafeek.

The private finance is for the public good, that is what Satya S. Tripathi, the changemaker of Global Alliance for a Sustainable Planet (GASP) has always leveraged. Adding to the vision of the country and solidifying Team MS’s commitment to sustainability, Our CEO, Mohammed Shafeek, engaged in a noteworthy conversation with Satya S. Tripathi on the momentous occasion of COP28 hosted by the UAE marking a pivotal step towards a resilient and environmentally conscious future. With the largest number of registered delegates in history, COP28 addressed the issues of rapidly changing Earth’s climate and the urgent action needed to avoid the most damaging consequences for people and nature.

UAE: The nation with visions and actions

The discussion with Satya S. Tripathi highlights the imperative for sustainability and underscores the role of platforms in addressing crises such as Global Warming. During the conversation, he emphasized that the UAE holds a pivotal role in COP28, focusing on actionable measures. The President of the UAE, HH Sheikh Mohammed bin Zayed Al Nahyan, committed to a $30 billion fund and announced the establishment of a global center for Climate Finance and Food Systems Declaration. Tripathi commended the nation for directing resources toward worthy causes, citing examples like MASDAR, Abu Dhabi Global Market (ADGM), and MUBADALA, which have substantial investments in sustainability. According to Tripathi, this combination of ambition and resources creates an ideal environment for addressing and combating climate challenges.

The challenges and solutions

In answering the questions related to the global challenges, Tripathi with no doubt pointed out that there is a heightened awareness among people regarding the escalating climate issues, and they are grappling with a sense of being overwhelmed by it. He stressed that it is crucial for actions to align with this awareness, particularly as countries in dryland regions like the Middle East are poised to be disproportionately affected. Tripathi further emphasized that technological advancements, innovation, and the active involvement of young people can play a substantial role in bringing about meaningful change in the situation. He commended the positive development of young negotiators participating in Climate Youth, expressing a warm welcome to their engagement.

Watch the full video of the talk between Satya S. Tripathy and CEO Mohammed Shafeek on COP28. Click the link below.

https://youtu.be/vMu5Bvb7oeU