United Arab Emirate is planning to introduce corporate tax from mid 2023. The announcement was made by Finance Ministry. Dubai, one of the seven Emirates has attracted businesses for years because of its tax free policies. This change is being done to expand the income source of the country.
UAE is considered as financial centre of Gulf as it serves as regional headquarters of huge array of multinational companies. The Finance Ministry has decided to tax business profits over 375,000 AED at 9% from June next year. At current exchange rate it converts to 102,000 dollars.
UAE has also made a significant change in operations as it has shifted its weekend. Earlier weekend used to be on Friday and Saturday; Sunday used to be a working day. To match with the world it has decided to make Saturday and Sunday as weekend. It comes as a big change as people of Islamic faith consider Friday as a holy day.
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A 9% corporate tax will ignite a competition in the world as it is on the lower end. Ministry also said that it is not planning to introduce personal income tax or capital gains tax from real estate.
United Arab Emirate has been trying to grow sources of income other than crude. The government has worked intensely on growing tourism, trade and business in the country. It is not hidden that Dubai has made its name in the world and businesses keep coming to the city. The introduction of corporate tax will diversify economy and lower its dependency on crude.
The growing wave of renewable energy and concerns over depletion of crude are something that have started bothering Gulf. In a sustainable world there is no place of crude and Gulf needs to find other sources of income if it wants to prevent itself from going into crisis.
