Tax & Structuring
Architecting compliant structures for a world where the rules are being rewritten. BEPS Pillar Two, UAE Corporate Tax, transfer pricing, and free zone optimisation.
Income Inclusion Rule. Parent jurisdiction tops up to 15%.
Undertaxed Profits Rule. Backstop if IIR not applied.
Qualified Domestic Minimum Top-up. Country captures its own top-up.
International Tax Architecture
BEPS Pillar Two establishes a 15% global minimum effective tax rate for groups with EUR 750M+ consolidated revenues. The EU Minimum Tax Directive required transposition by December 2023. The UK enacted its Multinational Top-up Tax. Singapore confirmed implementation via the MNE Minimum Tax Act from January 2025. For groups built through Gulf free zones on zero or near-zero headline rates, the implications are existential to those structures as currently operated.
UAE Corporate Tax at 9% on taxable income exceeding AED 375,000 (from June 2023) is the most consequential fiscal shift in Emirates history. For Pillar Two groups, the 9% UAE rate triggers a top-up in the parent jurisdiction under IIR (or UTPR) unless the UAE implements a QDMTT. Singapore's territorial system (17% headline, often reduced to single digits through DEI/IDI incentives) faces analogous pressures — concessionary rates may generate top-up exposure.
The era of headline rate arbitrage is over. What remains requires the most sophisticated advisory: designing structures that are commercially substantive, compliant with both letter and spirit of international tax rules, and resilient to further iterations. Substance-based carve-outs under GloBE Rules exclude 5% of eligible payroll + 5% of tangible assets from the top-up calculation — rewarding genuine economic presence, not mailbox entities.
Transfer Pricing
UAE Ministerial Decision No. 97 of 2023 requires master file, local file, and CbCR for groups above EUR 750M. For entities that operated for decades without documenting intercompany pricing, the compliance burden is substantial and exposure to adjustment is real. Gulf family conglomerates operate through dense webs of related entities spanning trading, real estate, hospitality, manufacturing, and financial services — historically priced on internal logic rather than arm's-length benchmarking.
The databases practitioners rely on (Orbis, Capital IQ, Bloomberg) contain limited coverage of private Gulf entities — making reliable regional comparable sets difficult. This often necessitates pan-Asian or pan-European comparables with documented adjustments. The UAE FTA has signalled rigorous scrutiny, and inadequate documentation or unsupportable pricing will face assessment and penalties.
We advise beyond compliant documentation — on redesigning intercompany transaction flows ensuring pricing is both arm's-length and aligned with commercial substance. This involves restructuring management fee arrangements, formalising previously informal service agreements, implementing cost-sharing reflecting genuine value contributions, and establishing financing terms satisfying OECD financial transactions guidance and thin capitalisation provisions. The objective: not merely surviving an audit but creating a framework that is defensible, consistent, and sustainable as operations evolve and tax authority sophistication deepens.
Free Zone Advisory
40+ UAE free zones. Qualifying Free Zone Person status requires adequate substance, qualifying income (Ministerial Decision No. 139 of 2023), transfer pricing compliance, and audited financials. The choice of zone is a structural architecture decision where tax is one variable among regulatory permissions, court jurisdiction, speed, visa allocation, and scalability.
Notably, QFC's 10% rate (with generous deductions) may prove more advantageous than UAE's 9% when Pillar Two top-up obligations are fully modelled — a counterintuitive finding that illustrates why free zone decisions require integrated tax, regulatory, and structural analysis rather than headline rate comparison.
We are not a tax advisory firm and do not render tax opinions. Our role is upstream and structural: advising on the commercial architecture of multi-jurisdictional presence — which entity sits where, what function it performs, how it is capitalised — with acute awareness of the tax, regulatory, and substance requirements each choice engages. We coordinate specialist tax counsel across jurisdictions, ensuring the structure is not merely compliant today but designed to absorb changes already visible on the horizon.