The UAE Ministry of Finance’s (MoF) said August 18 that while Gulf Cooperation Council (GCC) countries have agreed to simultaneously launch a value added tax (VAT), the countries have yet to settle on important details of the tax. The MoF also said the UAE is considering adopting a corporate tax.
The MoF said the UAE and the other GCC nations — Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia — have still not agreed to the tax rate and tax exemptions for a regional VAT. The GCC countries have been negotiating the terms of a VAT for several years.
Meanwhile, the UAE has readied draft laws to create a federal tax authority, tax procedures, and a VAT based on the components agreed to in the GCC draft law, the MoF said.
“An immediate announcement will be made once a final agreement on imposing a VAT law is reached,” the MoF said, adding that taxpayers will have 18 months to implement and fulfill the requirements of the VAT after passage of the new law.
The MOF also said it is considering proposals to adopt a corporate tax in the UAE. The country currently has no federal tax laws; rather, each Emirate imposes taxes separately.
The Ministry said the rate of a corporate tax is still under study. Taxpayers will be given at least one year to prepare for the implementation and fulfillment of their tax obligations should a corporate tax be enacted, the MoF said.
