Plan ahead for UAE corporate tax: Qashio
This includes assessing the application of the various rules and regulations and developing the processes and procedures to manage compliance. It is also necessary for the F&B industry to review the systems and implement plans, and build wiser forecasts, as the new tax could have profound implications for them.
In collaboration with Crowe, Qashio recently hosted a roundtable to discuss the implications of the introduction of corporate tax for finance leaders from the F&B industry. The event highlighted how the implementation of corporate tax will affect the UAE restaurant industry and what restaurant operators can do to ensure their compliance.
With the involvement of huge capital investments, competitive profit margins and a levy of municipal taxes and VAT on the F&B industry, the addition of 9 per cent corporate tax could have a negative impact on budget and pricing
– Armin Moradi
The event was attended by 50+ influential senior finance leaders from various restaurant groups and chains, including CFOs and finance managers of major hospitality groups, such as Bulldozer Group, Sweetheart Kitchen, Pickl and Gourmet Gulf.
As an operator in the F&B industry, being aware of one’s real-time business’ financial health is an important factor in ensuring that it is not being run blindly. With the involvement of huge capital investments, competitive profit margins and a levy of municipal taxes and VAT on the F&B industry, the addition of 9 per cent corporate tax could have a negative impact on the company’s budget and/or pricing.
Given that corporate tax is a novel concept to UAE businesses, it is essential for them to fully comprehend the concept in order to budget the time and resources needed to implement these changes.
Armin Moradi, CEO & Co-Founder of Qashio told TTN: “We understand the difficulties restaurant operators face in managing the increasing cost of supplies and operating with slim margins, combined with handling already complex accounting requirements. Corporate tax will add an additional layer of complexity, so the sooner F&B operators start working towards its implementation, the easier the transition will be.“The wider hospitality industry, in particular hotels, will also need to plan long-term and put processes and systems in place as soon as possible. As many hotels in UAE are franchised or part of a chain, they would face the same considerations as restaurants in planning for relationships between freezone and mainland entities, tax groups and the subject of transfer pricing. They will also need to consider the topic of permanent establishment when factoring in relationships with stakeholders outside of the UAE.”