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July 10, 2017

Establishing a Tax Department in a GCC Based Business

Discussions around taxation are frequenting the regional business community as the broader tax spectrum becomes a reality in the GCC. Businesses are now having to deal with the upcoming VAT implementation in 2018 and need to keep in mind the potential introduction of other tax policies which GCC governments are considering for future. Such developments have impacted the workplace creating the demand for VAT jobs and have posed the question “Do I need to establish a tax department?”, for many businesses.

 

Tax
Cooper Fitch Dubai
Cooper Fitch Dubai
Cooper Fitch Dubai
Cooper Fitch Dubai

Although there is no precise estimation as to when a business should hire a Head of Tax or a Tax Manager, Global practices show that there are some factors which GCC businesses can take into consideration when determining the right time to hire tax professionals.

Business Specifications

Firstly, it should be noted that according to the research provided by a professional services firm, the decision to establish a tax department may be driven by the complexity of the business, the environment in which it operates and the size of the business. Other factors which may be considered include the geographical and operational scope of the business. Consequently, the more diversified the company the greater the need to hire a tax specialist.

In-House vs Outsourced Tax Department  

As a result, businesses are continuously faced with the decision of whether or not to hire in-house tax specialists or outsource the tax function and use tax advisors.  One should understand that outsourcing tax professional may become costly and inefficient over a lengthy period of time and tax advisors may not fully understand all the intricacies of a particular organisation if they are outsourced.

One of the most recent Cooper Fitch placements - Head of Indirect Tax in a GCC based business, commented that having an internal tax resource is inevitable in order to exercise full control over tax matters, develop strong relationships with tax authorities and educate internal stakeholders on relevant tax affairs. In turn, the business can still use external tax advisors when a highly specialist or second opinion is required. It is worthwhile to remember that a tax department allows the business to personally control tax affairs and thus can be a pivotal function of the overall business strategy.

Urgency

In terms of GCC based businesses, their immediate need may be related to hiring an Indirect Tax Specialist to manage their indirect tax matters. Global practices show that companies with the most efficient and robust indirect tax compliance functions usually have an indirect tax resource. This should be strongly considered by businesses in the GCC as ultimately, VAT compliance may become a large burden if not properly managed.

On the other hand, GCC businesses are under constant pressure from other tax issues arising from BEPS or Corporate Tax compliance matters arising regionally (some GCC states) as well as internationally.

Some GCC businesses have already hired tax specialists in order to manage the upcoming VAT implementation as well as the other above mentioned tax matters. Cooper Fitch has been at the heart of the tax recruitment in the region as the only GCC based recruitment consulting firm with a dedicated tax service line.

Cooper Fitch has a proven track record in advising private and public sector organisations on building their tax departments. If you are interested in recruiting for your business or are looking for a tax role in the region please get in touch with me via email vshakhov@coopefitch.ae

Viacheslav Shakhov By Viacheslav Shakhov

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