Now Reading
UAE considers new taxes

UAE considers new taxes

The country has already implemented a new selective tax

The UAE is considering the implementation of new taxes as it prepares to introduce a 5 per cent value added tax rate on January 1, according to reports.

The National cited a Ministry of Finance statement as confirming the country was “exploring other tax options according to best international practices”.

On top of the value added tax rate the UAE is introducing alongside Saudi Arabia next year the country has also introduced a 50 per cent selective tax on soft drinks and a 100 per cent selective tax on energy drinks and tobacco products in recent months.

Read: Revealed: Goods and services subject to VAT in the UAE

The laws surrounding this selective tax mean it can potentially also be applied to other luxury items at a maximum tax rate of 200 per cent.

The Finance Ministry said other tax options “are still under analysis and study and it is unlikely they will be introduced in the near future”.

However, it stressed that “the UAE is not currently looking at introducing income tax”.

The country’s status as a tax-free location has been one of the key attractions to the millions of expatriate workers that call the UAE home.

The IMF said in October that it may become necessary for the Gulf Cooperation Council States, which are collectively implementing the 5 per cent VAT rate over the next two years, to implement income and other taxes to balance their budgets in the future.

“Eventually I think the introduction of personal income tax may be necessary depending on development in the oil markets and also in terms of reforms and what type of yields they provide and how the overall budget looks like,” the IMF’s deputy director of fiscal affairs department Abdelhak Senhadji said at the time.

Read: IMF says income tax may become “necessary” for GCC states

© 2020 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top