The United Arab Emirates will impose a federal levy on corporate earnings for the first time next year, as it dismantles a tax-free regime that’s made it a magnet for global business but drawn scrutiny over transparency.

The measure comes as the UAE 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 last year. The ambitious plan aims to eventually set 15% as the base levy to stem international competition to offer more attractive rates.

The UAE announced in July its support for global tax standards and said Monday that its new 9% rate, which will come into effect in June 2023, would provide a basis to apply that support, though in the UAE many of these large corporations operate inside free zones and will remain exempt provided they don’t do business with the mainland.

“Introducing a CT regime reaffirms the UAE’s commitment to meeting international standards for tax transparency and preventing harmful tax practices,” it said in a statement on its website.

source : https://www.aljazeera.com/