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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Bengaluru: Amid soaring mercury levels in the state, the Indian Meteorological Department has forecasted sunny and dry weather conditions to prevail across the state for the next two weeks. In this background, the state government has released guidelines and also has instructed district administrations to strictly keep vigil till April 15th.
As per IMD data, Kalaburagi recorded a maximum temperature of 40 degree celsius, while Mangaluru registred a temperature of 31 degree celsius on Thursday (March 28).
The Karnataka Health Department taking to its official ‘X’ account posted regarding the heat-related health advisory
The guidelines issued are as follows:
► Increase water intake. Consume buttermilk, fresh water, and fruit juice frequently.
► Include vegetables and fruits with high water content in your diet.
► Wear loose, light-colored cotton clothing and breathable footwear.
► Take precautions when going outside, such as wearing sunglasses, carrying an umbrella, or using sun protection.
► Stay informed about local weather conditions through radio, television, or newspapers and plan outdoor activities accordingly.
ಬಿಸಿಲಿನ ತಾಪದಿಂದ ರಕ್ಷಣೆ ಪಡೆಯಲು, ಆರೋಗ್ಯವನ್ನು ಕಾಪಾಡಿಕೊಳ್ಳಲು ಸಾರ್ವಜನಿಕರು ಇಲ್ಲಿ ನೀಡಲಾಗಿರುವ ಸಲಹೆಗಳನ್ನ ಪಾಲಿಸಿ#HeatWave #Summer #StayHydrated #Karnataka pic.twitter.com/C5sUy5M0CN
— K'taka Health Dept (@DHFWKA) March 27, 2024