No New Taxes In 2012 For UAE

by Lorys Charalambous, Tax-News.com, Cyprus

28 November 2011

A UAE Finance Ministry official has confirmed that the UAE will not impose any new taxes in 2012, with the implementation of a value-added tax (VAT) across the Gulf Cooperation Council (GCC) now not likely for at least two more years.

Younis Haji Al Khouri, Undersecretary of the Ministry of Finance, told Al Khaleej newspaper that the imposition of VAT, probably at 5%, will not take place until all GCC member countries have the necessary administrative systems in place to implement the tax. This is a process which he says pushes any implementation date out to beyond 2013.

A pan-GCC VAT, receipts from which would offset the loss of customs revenues arising out of the removal of internal customs duties, has been discussed for many years, but there remain many technical obstacles to overcome, and some member states are more ready than others to implement the tax.

A timeframe of 2012 to 2015 has been tentatively proposed for the imposition of VAT, but there is currently no consensus on an implementation date.

The GCC comprises Kuwait, Bahrain, Saudi Arabia, Qatar, the UAE and Oman.

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