Dubai plans to cut government taxes on business activities – News

The department has announced plans to introduce a federal corporate income tax starting in June 2023.

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By Isaac John

Published: Tue 1 Feb 2022, 19:06

Last update: Tue 1 Feb 2022, 22:45

Dubai will consider reducing government taxes on business activities to further improve the business environment in the emirate following the introduction of a federal tax on business profits, Dubai’s media office said on Tuesday.

Dubai’s Ministry of Finance (DOF) said it was stepping up its efforts to further improve the growth-friendly business environment for businesses in the emirate, particularly small and medium-sized enterprises (SMEs), following of a federal corporate tax of 9.0% on business profits announced Monday by the United Arab Emirates‘ Ministry of Finance.

The new tax regime, which is part of the UAE’s ambitious diversification effort aimed at accelerating its economic growth, will come into effect from January 2023. The new tax policy, which will be implemented in accordance with best international practices, marks a significant change in the status of the UAE as a tax haven for investors and businesses.

The DOF’s decision to examine the possibility of gradually reducing fees on business activities in Dubai is under the guidance of Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council of Dubai.

Abdulrahman Al Saleh, director general of the DOF, said the department’s efforts, which are aligned with the framework of federal financial laws, are aimed at enabling businesses to be more successful.

The DOF noted in a statement that corporate taxes are consistently applied in many countries around the world in a way that serves the interests of the government and takes into account the long-term interests of businesses. “The federal tax announced by the UAE Ministry of Finance on Monday, which will be at a low rate of 9%, is considered competitive and reflects best practice. It is among the lowest in the world and the lowest in the region.

Al Saleh revealed a government program to study all current and emerging variables related to companies working in Dubai.

“Under the guidance of our wise leadership, and as part of the Government Revenue Structuring Program, the DOF is reviewing royalties from companies that contribute, along with other sources of government revenue, to fund government projects. obliges to study and revise the system of government fees, in order to facilitate businesses and entrepreneurial projects,” said Al Saleh.

“The fees imposed by the Government of Dubai on business activities are affordable in the absence of corporate tax. Following the introduction of this tax, however, we will be keen, under the supervision of the General Secretariat of the Council executive, to study these fees and study the possibility of gradually reducing them according to emerging trends,” said Al Saleh.

The revenue structuring program includes an in-depth study of the fees collected by all government entities within the framework of the general government budget, in order to serve the aspirations of the emirate to achieve sustainable development of public revenues and to align them with global best practices. The program aims to ensure revenue sustainability and activate the emirate’s fiscal policy by supporting economic growth and the business environment.

The DOF said it will continue to work in cooperation with relevant authorities to develop policies considered ideal and attractive for foreign investment in key sectors, especially SMEs.

The DOF reiterated its support for companies based in free zones and affirmed the continuation of current tax incentives offered to companies in free zones that “comply with all regulatory requirements and do not conduct business activities on the mainland. of the UAE”.

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