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UAE Reports On VAT, Corporate Tax Developments

by Lorys Charalambous, Tax-News.com, Cyprus

19 August 2015


The Finance Ministry of the United Arab Emirates (UAE) has provided a progress update on the adoption of a value-added tax at Gulf Cooperation Council (GCC) level.

The GCC states – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE – previously agreed to introduce a VAT simultaneously. However, these negotiations are still ongoing, as GCC countries have yet to agree on a tax rate and a list of exemptions, the Finance Ministry said.

The UAE is currently undertaking studies on the impact of the VAT and is drafting three domestic laws, including a parent VAT law, which is to include the features agreed at GCC level. The other two laws would govern VAT procedures and establish a federal VAT authority.

The Ministry said the studies it is undertaking look at the potential social and economic implications of introducing a VAT, including reviewing the impact of a VAT on the UAE's global competitiveness. Alongside this, the Government is also drafting a new corporate tax law. It said a corporate tax rate has yet to be agreed.

The Government said that as soon as an agreement is reached, an announcement will be made immediately, to allow companies 18 months to prepare for the VAT and 12 months to prepare for a new corporate tax regime.

TAGS: United Arab Emirates | Finance | tax | economics | value added tax (VAT) | Kuwait | Saudi Arabia | fiscal policy | law | corporation tax | Bahrain | Qatar | tax authority | tax rates | tax reform | Gulf Cooperation Council | Oman

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