The unique selling point of theUAE was its tax-free status the united arab emirates
is losing that.
Now starting june 2023 corporates in the UAE will be asked to pay a federal tax will this force businesses to move.
UAE longer remain attractive to entrepreneurs and why is the ua suddenly introducing attacks after all these years our next report has the answers
it's hard to get this skyline wrong
this is the united arab emirates
home to ultra rich people
ultra fast cars
ultra tall towers ultra luxurious
airlines
and the coveted business hubs
there are at least 3
209 international companies in the uae
most of them are based in dubai
what makes this land a favorable
business destination
one taxes
you don't need to pay any
two ownership
foreign companies do not need emirati
shareholding
and three location
uae is halfway between europe and asia
it's a magic formula for minting money
but soon companies will be forced to
share their profits
uae has introduced its first ever
corporate tax businesses will be taxed 9
this will apply to profits exceeding 375
000 dirhams
which is around 102 000
corporates whose profits are below 102
000
will not need to pay tax
this is a federal corporate tax meaning
it does not apply to individuals
just businesses they will have to start
paying tax starting june 2023
this is the first time the uae is taxing
businesses directly one can't help but
ask why
why is the uae bent on losing its usp
maybe to stay in the business
we did some digging
here's what we think paved the way for
this tax regime
one the need to be a team player
countries worldwide want big corporates
to pay a minimum of 15 tax the proposal
was put forward by the oecd and 136
countries including the uae signed on it
in 2021
this corporate tax helps uae do its bit
in countering big tech's tax evasion
what it also does is save the uae from
grey listing
point number two may come as a shock to
some of you remember fatf the financial
action task force that's great listed
pakistan it is now discussing whether or
not to put the uae in the same category
fatf reportedly believes the uae has not
done enough to combat money laundering
if gray listed the uae's investments
could take a hit
taxing businesses on the other hand
helps it build a case before the
financial watchdog
point number three corporate tax also
helps the uae diversify its economy ever
since the pandemic struck oil-rich
countries began pivoting away from
over-reliance on petroleum
saudi arabia for example invested in an
indian retail chain
the uae 2 is exploring different avenues
of income
in 2018 the uae introduced vat or value
added tax on most goods and services
currently branches of foreign banks need
to pay 20
tax as do certain companies in the
energy sector
what changes now is that other
businesses too
come under the tax bracket
there is a possible fallout of this move
the uae may lose business especially to
saudi arabia riad has been offering
incentive to international companies
it wants businesses to shift their
offices to be fair the uae still has an
edge
for starters most other gulf countries
impose corporate tax on mncs too in
saudi arabia it is 20
in oman it is 15
and 10
in qatar the uae is proposing 9
what about tax havens outside the gulf
montenegro's tax rate is eight percent
gibraltar 10
hong kong's taxes start at 8.5
and go up to 16.5 percent
the uae's finance ministry has said that
the country's corporate tax regime will
be amongst the most competitive in the
world it's not like upsetting businesses
is an option before the uae