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The UAE is planning to introduce federal tax on corporate earnings for the first time, scrapping the levy-free regime that’s helped make it a magnet for businesses from across the world. Picture: BLOOMBERG
The UAE is planning to introduce federal tax on corporate earnings for the first time, scrapping the levy-free regime that’s helped make it a magnet for businesses from across the world. Picture: BLOOMBERG

The United Arab Emirates is planning to introduce federal tax on corporate earnings for the first time, scrapping the levy-free regime that’s helped make it a magnet for businesses from across the world.

The government is set to introduce a 9% federal corporate tax on business profits from June 2023, state-run WAM news agency said on Monday. Corporate tax will not apply on personal income from employment, real estate and other investments, and incentives for free zones will continue.

The move comes in the face of rising competition from neighbouring Saudi Arabia, which has been increasing pressure on international firms to shift their Middle East headquarters to the kingdom.

The UAE is oil cartel Opec’s third-biggest oil producer and the capital, Abu Dhabi, as well as business hub Dubai were hit by the coronavirus pandemic and the subsequent crash in energy prices.

Bloomberg. More stories like this are available on bloomberg.com

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