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You will not have to pay income tax in UAE

Issac John/Dubai
Filed on November 2, 2016 | Last updated on November 2, 2016 at 06.58 am
Picture used for illustrative purposes alone
Picture used for illustrative purposes alone

(Alamy Image)

Companies whose revenues range between Dh1.87 million and Dh3.75 million will have an option to either register under the system or not during the first phase of rolling out the system.

 The UAE has no plans to impose personal income tax, a top government official said. Younis Al Khouri, under-secretary at the finance ministry, told Arabic daily Al Bayan that the UAE is also not studying the introduction of any new fees on services.

 Al Khouri's assurance of no new taxes came in the wake of the UAE announcing the establishment of a Federal Tax Authority (FTA) ahead of the planned introduction of five per cent VAT (value added tax) in early 2018.

Also read: Is personal income tax in GCC on the horizon?

The FTA, which will facilitate a smooth transition to a tax era, will issue guidelines and clarifications to taxpayers. It will also inspect taxpayers' records and documents, review tax returns and audit reports submitted to the authority. Khouri said projects in the UAE's new five-year Dh248 billion budget unveiled on Sunday would not rely on new taxes or additional fees, or revenues from VAT.

"The budget will not be affected by changes in global oil prices," the under-secretary was quoted as saying.

Also read: VAT will be a source of income in UAE

Khouri said the finance ministry, which has been studying the social and economic impact of a proposal on corporate tax, is taking those studies to the cabinet, with a view to building a comprehensive tax regime.

He did not elaborate on any possible changes to corporate tax but said an initial step in developing the tax regime had been taken with establishment of the FTA.

Under the VAT system, companies in the UAE that record annual revenues over Dh3.75 million will be obliged to register and will accordingly be taxed.

Companies whose revenues range between Dh1.87 million and Dh3.75 million will have an option to either register under the system or not during the first phase of rolling out the system.

For long, the International Monetary Fund has been urging GCC countries to increase government revenues through various taxes, including VAT, corporate income taxes as well as property and excise taxes.





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