United Arab Emirates grasps the corporation tax nettle as free zones look set to escape the net
The UAE has announced that a 9% corporation tax will be apply to year ends falling from 1 June 2023 onwards. The tax will apply to “onshore” businesses and free zone companies not doing business in the country will remain with zero corporation tax. There will be a de minimis threshold, no withholding taxes and no taxes on dividend payments. The 9% tax rate will be competitive relative to the prevailing 10% to 20% rates across other territories in the GCC and Iraq.
The UAE is rapidly seeking to maintain its position as a regional and international corporate hub with added taxation, localisation and compliance legislation forcing concessions in relation to minimum local ownership, preferential rights for local commercial agents and flexible employment laws.
Hugh Fraser International has ramped up its DMCC Plus+ Corporate and Compliance Solutions in response to this changing investment horizon as the UAE continues to be a major draw for companies with advanced petroleum or energy transition technologies looking to grow in the Middle East region and further afield.