Background
A holding company incorporated in ADGM owns subsidiaries int he UAE, Europe, China, and several other jurisdictions. The client engaged us to support accounting for the ADGM holding.
Our Analysis
While performing the holding’s accounting, we reviewed the group structure and confirmed that consolidated revenue exceeded EUR 2,000,000,000. Given the revenue level (above EUR 750,000,000), the multi-country footprint, and the fact that the holding is the Ultimate Parent Entity with tax residency in the UAE, we determined the group is in scope for Country-by-Country Reporting (CbCR) in the UAE.
Acting as a partner, we identified this requirement early and informed the client in advance. Although CbCR was outside the original engagement scope and responsibility, the client requested for our additional support once we raised the point and confirmed willingness to comply with CbCR requirements at the earliest.
We set the key deadlines (notification by fiscal year end; CbC report within 12months after year-end) and provided timelines for the client to coordinate with internal team so data from all subsidiaries was gathered on time.
We also highlighted potential Pillar Two implications to increase awareness of the group’s future global minimum tax position.
Outcome
The CbCR obligation was confirmed, internal coordination ran to schedule, and both the notification and the report were submitted on time. This prevented the AED 1,000,000.00 penalty exposure and kept the group compliant. The client formally engaged us for this additional work after our early alert and expressed strong appreciation for the timely guidance and organisation.
