Abu Dhabi: Businesses in the United Arab Emirates will now be subject to a new 9 per cent corporation tax from the beginning of their first financial year that starts on or after June 2023, reported Arab News.
Notably, this new programme will leave intact the exemption for individuals from income tax, capital gains tax on real estate and other investments, and other earnings that do not come from a business.
Earlier, in 2018, the UAE introduced a value-added tax on most goods and services at a standard rate of 5 per cent.
The UAE also imposes a 20 per cent tax on branches of foreign banks operating in the country, and on companies with concession agreements in the oil and gas sector of up to 55 per cent at the emirate level.
With this move, the UAE is following in the footsteps of other Gulf Cooperation Council countries in implementing corporate tax systems, with five of the six GCC countries currently doing so, reported Arab News.
Meanwhile, following the UAE, Qatar has the second-lowest corporate tax of 10 per cent, followed by Oman and Kuwait with 15 per cent. Saudi Arabia possesses the highest corporate tax rate of 20 per cent.