The United Arab Emirates will not introduce an income tax for the time being, a senior official said, weeks after the Gulf nation unveiled a new company levy as part of an effort to shed its tax haven image.
“It is not at the table at all now, Thani Al Zeyoudi, the minister of state for foreign trade, told Bloomberg TV in an interview Monday.
The Gulf country said earlier this year it would impose a 9 percent corporate tax starting in 2023 as it seeks to align itself with new international standards, particularly the move toward a global minimum tax on multinational corporations endorsed by the Group of 20 major economies.
The UAE’s new corporate tax has been received in a “positive manner by businesses, said the minister. The new levy is going to replace most of the fees companies now have to pay, according to Al Zeyoudi.
The Gulf nation has already taken several steps to dilute its reputation as a tax haven for both businesses and individuals. It introduced a 5 percent value-added tax in 2018. It already taxes banks and insurance companies operating outside of the country’s vast network of free zones as much as 20 percent on their profits. The oil and gas sector of OPEC’s third-biggest producer is also taxed under a separate program.
Over the next few weeks, the Ministry of Finance is expected to announce more details clarifying how the corporate tax will be imposed.