UAE Corporate Tax – What we know so far

Background

In recent years UAE has undergone significant tax changes to modernize its tax system to bring it in line with international best practices and standards and to diversify state revenue

In line with these GCC agreements, UAE introduced its first two taxes at the Federal level, Excise tax at the rate of 100% on energy drinks and tobacco products and 50% percent on carbonated drinks 2017 and VAT at the standard rate of 5 % with effect from January 2018

What is Corporate Tax?

A Corporate tax is a form of direct tax levied imposed on the net income or profit of the corporations and other legal entities. Many counties impose corporate tax at the national level and a similar tax may also be imposed at the state or local levels. Also known as “Corporate Income Tax” or “Business Profits Tax” in some jurisdictions, is a direct tax applied on the net income or profit of corporations and other businesses.

Corporate tax in GCC

• Saudi Arabia is charging corporate tax at the rate of 20 %.
• Oman and Kuwait are charging corporate tax at the rate of 15%, whereas Qatar is charging corporate tax at the rate of 10%
• Bahrain is the only country in GCC where corporate tax is not charged

New Corporate tax introduced by the UAE government is the lowest among the six national Gulf Cooperation Council, to keep a low base to maintain its attractiveness for businesses.

With a 9 % Statutory tax rate and exemptions and reliefs, the UAE corporate tax regime should remain one of the most competitive in the region

Why Corporate tax is introduced in UAE?

The introduction of the UAE Corporate tax regime would enable UAE to adopt and implement global minimum tax and to address tax challenges arising from the digitalization of the global economy.

• To cement the UAE’s position as a leading global hub for business and investment
• Accelerate the UAE’s development and transformation to achieve its strategic objectives
• Reaffirms the UAE’s commitment to meeting international standards for tax transparency and preventing harmful tax practices.

WATCH VIDEO: UAE Corporate Tax Presentation