The former tax haven’s Ministry of Finance began rolling out a 9% corporate tax last week as part of the once tax-free oil producer’s efforts to boost non-oil revenue and remain a regional commercial hub, Reuters reports.
The ministry said: ‘Given the position of the UAE as a global financial centre and an international business hub, the UAE Corporate Tax regime will support investment and headquarters activities and ensure the free flow of capital, trade, financing, and services.’
The tax applies to businesses and individuals carrying out business activities in the UAE under a commercial business license. Some exemptions apply, including for dividends and capital gains earned by a UAE business from its eligible shareholdings.
According to Reuters, the ministry said qualifying entities in the UAE’s more than 30 free zones – which exported tens of billions of dollars of goods to neighbouring states – would be subject to a 0% rate, even when dealing with the mainland on certain strategic activities such as manufacturing, goods processing and logistics services.
The ministry’s Shabana Begum is quoted as saying: ‘The regime has been designed to ensure strategic sectors will thrive in the free zones. Some level of migration may happen, but the overall objective is ensuring the UAE remains attractive.’
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