UAE to impose federal corporate tax for the first time
Dubai, Jan 31: The United Arab Emirates announced Monday it is introducing for the first time a federal corporate tax on business earnings. It's the latest measure to bring the country in line with many governments worldwide but one that also chips away at its competitive advantage.
The UAE home to Abu Dhabi, Dubai and five other emirates has been steadily introducing new taxes as it seeks to diversify revenue from its mainstay of oil. It is unclear how the new 9% corporate tax on earnings will impact consumers as some businesses could raise their prices as a result.
Businesses across various sectors in the UAE are still reeling from the effects of the coronavirus pandemic. Untold numbers of foreigners, who comprise around 90% of the UAE's population, lost their jobs amid the pandemic and salaries were slashed in key industries such as tourism, real estate and the construction sector.
The UAE has recently taken steps to try and retain foreign investors, including loosening restrictions on business ownership rules and granting longer-term visas for some. It has also liberalised some of its Islamic laws around alcohol and unmarried couples, and moved to a Monday-Friday workweek.
Still, the UAE faces steep competition from neighbouring Saudi Arabia, which is working overtime to attract businesses and families to relocate to the kingdom.
The UAE's Ministry of Finance said the new federal tax of 9% on profits would be effective starting June 1, 2023. The corporate tax will not apply to personal income from employment, real estate and other investments, or to income earned from a business licensed outside the UAE.
The UAE has long positioned itself as a place where foreign investors are welcome and where incomes are tax free. Low taxes and a friendly business environment helped to transform the 50-year-old nation over the years.
The new corporate tax also does not apply to companies in Emirati free zones unless they conduct their business onshore. Another exception are oil and gas companies, which are subject to their own tax schemes.
Business profits of up to roughly 102,000 will not be taxed, the ministry said, in order to support small businesses and startups. Furthermore, foreign taxes can be credited against the UAE's corporate tax to avoid double taxation. The tax scheme will allow UAE business groups to be taxed as a single entity or apply for relief amid losses or restructuring.
Various emirates in the UAE have been steadily introducing fees and taxes in past years. After oil prices dipped dramatically in mid-2015, the government reduced some subsidies and imposed a 5% value added tax on most goods and services, a standard tax that is still lower than in many countries around the world.
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Mangaluru: Teacher booked for allegedly beating student in school
Vittla (Dakshina Kannada): A case has been registered at the Vittla Police Station against a school teacher on charges of seriously assaulting a student with a cane at an English-medium school in Idkidu village here near Vittla in Dakshina Kannada district.
According to the complaint, the student, who attends the school regularly, had gone to school as usual. Around 2 pm, the child’s parents received a call from the school office stating that their child had allegedly disturbed other students. The school informed them that when the teacher scolded the student over the issue, the child became frightened and urinated, and the parents were asked to come and take the child home.
The parents reportedly told the school staff that no one was at home at the time and requested that the child be sent home in an autorickshaw.
After returning home, the student told the parents that a teacher identified as Istikaar had beaten him severely on the hand with a cane. The child also said that he urinated out of fear while the assault was taking place.
When the parents contacted the teacher over the phone to question him about the incident, he allegedly responded in a dismissive manner.
Following this, the parents lodged complaints with the Vittla Police Station and the Child Development Project Office, seeking justice and strict action against the teacher for allegedly assaulting the child without any valid reason.
Police have registered a case against the teacher and have taken up further investigation.
