UAE to remain income tax-free for residents
The introduction of employee tax is ‘not on the table’…
Minister of State for Foreign Trade, Thani Al Zeyoudi, has said that the introduction of employee income tax in the UAE is “not at our table at all now”.
Bloomberg TV pressed the minister on Monday February 21’s edition of Daybreak: Middle East with the question on everyone’s mind: Does the introduction of corporate tax mean we can expect an announcement introducing income tax? Al Zeyoudi quickly deflected “it’s not at all at our table”.
On January 31, the UAE’s Ministry of Finance announced that it will be introducing federal corporate tax in June 2023. Al Zeyoudi said that the response has been generally positive, with companies understanding that the UAE must align itself with international standards.
After June 1, 2023, a standard statutory tax rate of 9 per cent will apply to businesses earning over Dhs375,000 in profit. Any income earned that doesn’t arise from businesses or commercial activity will be exempt from corporate tax.
The minister mentioned that the corporate tax is intended to replace ‘most’ of the fees currently required of companies in the UAE.
To ensure companies are fully prepared for the introduction of corporate tax next year, ample time will be given to prepare, and businesses can expect more detailed information from the ministry by the middle of the year. Further information can also be found on tax.gov.ae