Medsol plans new diagnostic labs

Medsol, the Dubai-based medical services company, plans to double the number of diagnostic laboratories it operates in the Gulf as private medical care booms across the region. The size of the medical sector in the UAE was expected to reach nearly US$12 billion (Dh44.06bn) by 2015, more than tripling in size within a decade. Medsol, which is owned by Global Capital Management, the Kuwaiti private equity firm, planned to purchase an additional 16 laboratories to grow its specialised medical business in the GCC, a senior executive said. Its laboratories can perform roughly 4,000 different procedures including cholesterol checks, swine flu tests and MRI scans.

"We're looking to focus on existing private laboratories with a solid business plan to integrate within our organisation," said Ravi Dhir, the acting chief executive and vice president of Medsol's Kuwaiti operations. The expansion had been focused on Saudi Arabia, but more acquisitions in the UAE had not been ruled out, he added. Medsol now controls 10 laboratories in Dubai, five in Kuwait and one in Saudi Arabia.

As the UAE continued to make significant investments in health care, including a number of new hospitals and medical speciality centres under construction, the sector's value was expected to grow from approximately $3.2bn in 2005 to $11.9bn by 2015, according to Santeum Partners, a healthcare consultancy. "The region is very attractive to us because of the ageing population, amount of disposable income available and the insurance-based market forces," said Mr Dhir.

Since Medsol started in 2006 with four laboratories in Dubai, the diagnostic business had been a major revenue driver for the company, said Wayne Hidge, the finance director for Gulf Healthcare International, Medsol's parent company. "On average, our labs generate profit margins of about 65 per cent," he said, adding the company's capital was "sufficient" to meet its targets. The company had seen its revenues grow by 150 per cent and profit increase 100 per cent in the past two years, Mr Hidge said.

Diagnostic laboratories have a promising future in the region as pharmaceutical firms required local test results to fine-tune their drugs to better serve patients in the region, said Ruch de Silva, a consultant with Datamonitor. @Email:dgeorgecosh@thenational.ae

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer