Subscribe
Subscribe
Home » tax
Tag:

tax

GovernanceLatest NewsPolicy & Finance

UAE Set to Introduce New Tax on 1st January 2025

by rachel
written by rachel

The United Arab Emirates (UAE) is set to introduce a new tax at the start of 2025, and is considering options for incentives to support innovative businesses advancing the economy.

The UAE Ministry of Finance has announced updates in relation to specific provisions of Federal Decree Law No. 47 of 2022 on the Taxation of Corporations and Businesses.

A Domestic Minimum To-Up Tax (DMTT) will be effective in the UAE for financial years starting on or after the 1st January 2025 – this follows the issuance of Federal Decree Law No. 60 of 2023.

This step highlights the UAE’s commitment to implementing the Organisation for Economic Co-operation and Development’s (OECD) Two-Pillar Solution, targeted at establishing a fair and transparent tax system aligned with global standards.

The Pillar Two rules will require large multinational enterprises (MNEs) to pay a minimum effective tax rate of 15 per cent on profits in each country where they operate.

The DMTT will apply to multinational enterprises operating in the UAE with global revenues of $794 million or more in at least two out of the four financial years immediately preceding the financial year in which the DMTT applies.

In a bid to promote sustainable development, innovation and investment, the Ministry of Finance is considering the introduction of Corporate Tax Incentives under Federal Decree Law No. 47 of 2022.

In order to promote and encourage research and development activities, and foster innovation and economic growth in the UAE, a Research and Development Tax is being considered.

Following feedback received during public consultations conducted in April 2024, the proposed incentive is expected to take effect for tax periods starting on or after the 1st January 2026.

The research and development tax incentive will be based on expenditure, potentially offering 30-50 per cent tax credit and that will be refundable depending on the revenue and number of employees in the business in the UAE.

Refundable tax credit for high-value employment activities is being considered. This aims to encourage businesses to engage in practices that deliver significant economic benefits, inspire innovation, and enhance the UAE’s global competitiveness. This incentive is proposed to take effect on the 1st January 2025.

The final form and implementation of the aforementioned proposed incentives are subject to legislative approval. The Ministry of Finance will provide further details and guidance for taxpayers regarding these incentives in due course.

0 comments
0 FacebookTwitterPinterestEmail
GovernanceLatest News

UAE FTA Signs MoU to Promote Tax Culture

by Madaline Dunn
written by Madaline Dunn

The UAE Federal Tax Authority (FTA) has signed a Memorandum of Understanding (MoU) with the Mohammed bin Rashid Housing Establishment (MRHE) aimed at promoting tax culture on a wider scale.

Under the agreement, the two will organise joint events to continuously highlight the latest updates regarding tax legislation and procedures, focusing particularly on processes for UAE nationals to request Value Added Tax (VAT) refunds for taxes incurred on building new residences.

“Signing this Memorandum of Understanding with the Mohammed bin Rashid Housing Establishment contributes to establishing an effective framework for joint collaboration between our two entities,” said His Excellency Khalid Ali Al Bustani, FTA Director General. “This, in turn, supports our plans at the Federal Tax Authority to institute a tax environment that encourages compliance, in line with the highest standards of governance and transparency.”

According to HE Al Bustani, the authority aims to reach “all segments of the community,” especially UAE citizens, through ongoing awareness plans.

“The Authority implements tax legislation that reflect the UAE Government’s directives to ensure citizens’ wellbeing. With that in mind, we continue to intensify our efforts to provide proactive and sustainable services using innovative methods to meet all customers’ aspirations,” said HE Al Bustani.

The FTA Director General cited the Maskan smart application, which the Authority recently launched, as a step in that direction, offering additional facilities for UAE citizens to reclaim VAT they paid on building their new homes through 100 per cent digital and paperless procedures.

He noted the FTA’s focus on strengthening its strategic partnerships with public and private sector entities, critical role these partnerships play in the successful implementation of the tax system and in efforts to promote voluntary self-compliance.

His Excellency Omar Hamad Bu Shehab, CEO of the Mohammed Bin Rashid Housing Establishment, said: “Raising tax awareness among citizens, particularly regarding housing construction, is crucial.” He added: “Through this partnership, we aim at providing the necessary information and guidance to simplify the procedures involved and we look forward to offering the essential facilities associated with reclaiming VAT on housing construction.”

Alongside organising a series of workshops to spread tax awareness among business sectors, the MoU also aims to coordinate participation in economic events and meetings with trade delegations in areas related to the tax sector, it was shared, in addition to facilitating collaboration towards organising conferences, seminars, and specialised workshops within the scope of both parties’ work.

According to the FTA, the MoU also supports the its strategic plan for promoting tax awareness and education, driving closer cooperation towards educating all stakeholders about taxes implemented in the UAE, including VAT, Excise Tax, and Corporate Tax, as well as the categories of taxpayers who are subject to them and the standards, requirements, and mechanisms for tax compliance.

0 comments
0 FacebookTwitterPinterestEmail
FinanceSpecial Reports

Billionaire Tax Could Raise $250m Annually | Report

by Madaline Dunn
written by Madaline Dunn

A new report from economist Gabriel Zucman proposes taxing individuals with more than $1 billion in wealth, equal to 2 per cent of their wealth. The report, commissioned by the Brazilian G20 Presidency, states that this billionaire tax could raise $200-$250 billion per year in tax revenue from about 3,000 taxpayers globally while extending the tax to centi-millionaires would generate an additional $100-$140 billion.

This, he said, could be used to support sustained economic development through investments in education, health care, public infrastructure, the energy transition, and climate change mitigation.

According to Zucman, this standard could be flexibly implemented by participating countries through a variety of domestic instruments, including a presumptive income tax, an income tax on a broad notion of income, or a wealth tax. 

The report titled ‘A blueprint for a coordinated minimum effective taxation standard for ultra-high-net-worth individuals’ outlined that a common standard has become technically feasible and could be enforced successfully even if all countries did not adopt it by strengthening current exit taxes and implementing “tax collector of last resort” mechanisms as in the coordinated minimum tax on multinational companies.

Zucman notes that this international standard would “effectively address” regressive features of contemporary tax systems at the top of the wealth distribution and would not substitute for but support domestic progressive tax policies by improving transparency about top-end wealth, reducing incentives to engage in tax avoidance, and preventing a race to the bottom.

The report also acknowledges potential challenges associated with the blueprint, including, how to value wealth, and how to ensure effective taxation if some jurisdictions decline to implement this standards. 

In addition to this, the report outlines that another challenge is maximising compliance by taxpayers. 

“The goal of this blueprint is to offer a basis for political discussions—to start a conversation, not to end it. It is for citizens to decide, through democratic deliberation and the vote, how taxation should be carried out. I hope this report will contribute to this democratic discussion,” said Zucman. 

Read the full report here. 

0 comments
0 FacebookTwitterPinterestEmail
FinanceInnovation & EducationLatest News

EY conducts seminar to assist Kuwaiti businesses navigate evolving tax landscape

by Madaline Dunn
written by Madaline Dunn

EY Kuwait recently conducted its Annual Corporate Tax Seminar 2024 in Kuwait City, delivered by EY’s tax experts. The seminar, designed to assist businesses in navigating and understanding the Kuwaiti tax environment and systems in the broader MENA region, outlined significant developments within the country’s tax landscape over the past year. It also touched on anticipated changes in tax laws and regulations.

A large number of C-suite executives, finance professionals from multinational corporations, Kuwait-based companies, and regulatory bodies reportedly attended.

The agenda encompassed various facets of taxation in Kuwait and the MENA region, with key topics including:

  • Base Erosion and Profit Shifting (BEPS) Pillar 2, 
  • Corporate tax practice updates,
  • Zakat, and 
  • National labour support tax (NLST) laws. 

Discussions also looked into the imminent introduction of the business profit tax, the global minimum tax for Kuwaiti multinationals, and regulatory updates and tax trends in the MENA. 

Ahmed Al-Esry, EY MENA Tax Leader, commented: “The proposed introduction of the business profit tax in Kuwait marks a significant milestone. A well-structured and equitable tax system can foster economic stability, rendering the country more attractive to global investors. This, in turn, can stimulate economic growth and facilitate diversification away from oil dependence, funding sustainable ventures. Tax implementation also fosters transparency and accountability, fostering a responsible business ethos.”

Seminar topics also included the implementation of value-added tax (VAT), corporate income tax (CIT) regulations and e-invoicing protocols, as well as Environmental, Social, and Governance (ESG).

0 comments
0 FacebookTwitterPinterestEmail
© 2025 ESG Mena