The United Arab Emirates (UAE), announced on Monday that it will implement a 15% tax rate on corporate profits starting in January 2025.
This move aligns the UAE with the global initiative to establish a minimum corporate tax rate.
In a statement, the UAE’s Ministry of Finance highlighted that the decision is part of the country’s commitment to the two-pillar solution proposed by the Organisation for Economic Co-operation and Development (OECD).
The OECD’s initiative aims to create a more equitable and transparent fiscal system for multinational corporations.
The global minimum tax rate was introduced in 2021 when approximately 140 countries signed onto the OECD-led agreement.
The goal of the agreement is to prevent companies from shifting profits to low-tax jurisdictions.
Historically known as a tax haven, the UAE had already begun taxing corporate profits in 2023, applying a 9% tax rate to companies with profits exceeding 375,000 dirhams ($102,000).
This new move to impose a 15% rate reflects the UAE’s ongoing efforts to diversify its economy and reduce its dependence on oil exports.
The finance ministry added that the country remains dedicated to fostering a business-friendly environment for companies operating in the region.
AFP
