Worldwide Corporate Tax Guide 2022
United Arab Emirates
ey.com/GlobalTaxGuides
Abu Dhabi GMT +4
Ernst & Young
+971 (2) 627-7522
Mail address: Fax: +971 (2) 627-3383 P.O. Box 136 Abu Dhabi United Arab Emirates
Street address: Nation Tower 2 Corniche Abu Dhabi United Arab Emirates
Principal Tax Contact
Guy Taylor,
+971 (4) 701-0566
EY MENA ITTS Leader Mobile: +971 (50) 181-2093 Email: guy.taylor@ae.ey.com
Dubai GMT +4
Ernst & Young
+971 (4) 332-4000
Mail address: Fax: +971 (4) 701-0967 P.O. Box 9267 Dubai United Arab Emirates
Street address: ICD Brookfield Place Al Mustaqbal Street Dubai International Financial Centre Dubai United Arab Emirates
Principal Tax Contact
Guy Taylor, +971 (4) 701-0566
EY MENA ITTS Leader Mobile: +971 (50) 181-2093 Email: guy.taylor@ae.ey.com
International Tax and Transaction Services – International Corporate Tax Advisory and Transaction Tax Advisory
Guy Taylor, +971 (4) 701-0566
EY MENA ITTS Leader
Mobile: +971 (50) 181-2093 Email: guy.taylor@ae.ey.com
Rajan Parmar +971 (4) 312-9229 Mobile: +971 (56) 656-5191 Email: rajan.parmar@ae.ey.com
Brandon George +971 (4) 701-0326 Mobile: +971 (55) 791-8461 Email: brandon.george@ae.ey.com
Daniele Dal Corso +971 (4) 701-0449 Mobile: +971 (54) 792-2910 Email: daniele.corso@ae.ey.com
Mina Al-Khudairi +971 (4) 701-0791 Mobile: +971 (56) 522-7049 Email: mina.alkhudairi@ae.ey.com
Tim Dopmeijer +971 (4) 701-5852 Mobile: +971 (56) 357-5686 Email: tim.dopmeijer@ae.ey.com
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International Tax and Transaction Services – Transfer Pricing
Guy Taylor,
+971 (4) 701-0566 EY MENA ITTS Leader
Mobile: +971 (50) 181-2093 Email: guy.taylor@ae.ey.com
Adil Rao +971 (4) 701-0445
Mobile: +971 (56) 547-9922 Email: adil.rao@ae.ey.com
Jorge Novas
Senaka Senanayake
Business Tax Advisory
Chris Lord
Wadih Abounasr
Mobile: +971 (54) 455-1504 Email: jorge.novas@ae.ey.com
Mobile: +65 9178-8463 Email: senaka.senanayake@ae.ey.com
+971 (4) 312-9459
Mobile: +971 (56) 683-2109 Email: chris.lord@ae.ey.com
+971 (4) 701-0717
Mobile: +971 (50) 743-0606 Email: wadih.abounasr@ae.ey.com
Roula Dajani +971 (4) 701-0804
Mobile: +971 (54) 457-0889 Email: roula.dajani@ae.ey.com
Hannah Shipley, Foreign Account +971 (4) 701-0319
Tax Compliance Act and Mobile: +971 (56) 681-8855 Common Reporting Standard Email: hannah.shipley@ae.ey.com Mohamed Araji +971(4) 701-5819 Mobile: +971 (54) 422-9955 Email: mohamed.araji@ae.ey.com
Global Compliance and Reporting
Sam Maycock, Global Compliance +971 (4) 701-0334 Services and Tax Accounting Mobile: +971 (56) 547-6846 Risk Advisory Services Email: sam.maycock@ae.ey.com
Massimo Ottonello, +971 (4) 701-0458 Global Compliance Services Mobile: +971 (56) 547-7957 Email: massimo.ottonello@ae.ey.com Lyndsey Napier, +971 (4) 701-0853 Global Compliance Services Mobile: +971 (50) 890-8311 Email: lyndsey.e.napier@ae.ey.com Junaid Hanif, +971 (4) 312-9492 Accounting Compliance Mobile: +971 (56) 686-9754 and Reporting Email: junaid.hanif@ae.ey.com
People Advisory Services
Vivek Sharma
+971 (4) 701-0620 Mobile: +971 (56) 506-8086 Email: vivek.s@ae.ey.com
Ludivine Baque +971 (4) 701-0148 Mobile: +971 (56) 992-9230 Email: ludivine.baque@ae.ey.com
Tax Technology and Transformation
Stuart Halstead
+971 (4) 701-0621
Mobile: +971 (50) 768-3629 Email: stuart.halstead@ae.ey.com
Mary O’Leary +971 (4) 701-0600 Mobile: +971 (55) 709 6936 Email: mary.o.leary@ae.ey.com
EY Law
Alison Hubbard
+971 (4) 701-0975
Mobile: +971 (56) 683-3634 Email: alison.hubbard@ae.ey.com
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Franco Grilli
+971 (4) 701-0025
Mobile: +971 (56) 682-2780 Email: franco.grilli@ae.ey.com
Iwan Walters +971 (4) 701-0601 Mobile: +971 (50) 976-1106 Email: iwan.walters@ae.ey.com
Indirect Tax
Aamer Bhatti,
+971 (4) 701-5711 EY MENA Indirect Tax Leader
Sana Azam
Mobile: +971 (50) 805-0757 Email: aamer.bhatti@ae.ey.com
+971 (2) 417-4562
Mobile: +971 (54) 305-4736 Email: sana.azam@ae.ey.com
Stuart Halstead +971(4) 701-0621 Mobile: +971 (50) 768-3629 Email: stuart.halstead@ae.ey.com
Tina Hsieh
Global Trade
Ramy Rass
+971 (4) 701-5802 +971 (56) 357-5513 Email: tina.hsieh@ae.ey.com
+971 (4) 701-0900
Mobile: +971 (56) 409-4584 Email: ramy.rass@ae.ey.com
Pascal Cange +971 (4) 312-9330 Mobile: +971 (56) 578-6236 Email: pascal.cange@ae.ey.com
A. At a glance
Corporate Income Tax Rate (%)
Capital Gains Tax Rate (%)
Branch Tax Rate (%)
Withholding Tax (%)
* No taxes are imposed by the federal government of the United Arab Emirates.
Section B for further information.
B. Taxes on corporate income and gains
Corporate income tax. Although no federal taxation currently exists in the United Arab Emirates (UAE), each of the individual Emirates (Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain) has issued corporate tax decrees that theoretically apply to all businesses established in the UAE. However, in practice, these laws have not been applied. Taxes are currently imposed at the Emirate level only on oil and gas produc ing companies in accordance with specific government conces sion agreements, and on branches of foreign banks under specific tax decrees or regulations or in accordance with agreements with the Rulers of the Emirates in which the branches operate.
The preceding paragraph describes how the practice has evolved in the UAE at the level of the individual Emirates. No general exemption is contained in the Emirates’ tax decrees. Persons investing in the Emirates should be aware of the risk that the tax decrees may be more generally applied in the Emirates in the future and of the remote risk that they may be applied retroac tively. On 31 January 2022, the Ministry of Finance (MOF) of the UAE confirmed that the UAE will introduce a federal corporate tax (CT) for financial years starting on or after 1 June 2023. This announcement follows confirmation by the MOF in July 2021
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0*
0*
0*
0*
See
that the UAE would support the global minimum effective tax rate under the Organisation for Economic Co-operation and Development (OECD)/G20 Base Erosion and Profit Shifting (BEPS) 2.0 project.
Although the CT law has not yet been issued, the MOF has pub licly communicated key elements of the CT policy and design through a Frequently Asked Questions (FAQs) document.
Based on the FAQs document, the CT rates are 0% for taxable income up to AED375,000; 9% for taxable income above AED375,000; and “a different tax rate” (the FAQs do not specify a rate but 15% would be in line with the global minimum effec tive tax rate) for large multinationals that meet specific criteria set with reference to “Pillar Two” of the OECD BEPS project (referring to multinational corporations with consolidated global revenues in excess of EUR750 million [AED3.15 billion]).
Tax incentives. Several of the Emirates have free zones that offer tax and business incentives aimed at making the UAE a global financial and commercial center. The incentives usually include tax exemptions for a guaranteed period, the possibility of 100% foreign ownership, absence of customs duty within the free zone and a “one-stop shop” for administrative services. The free zones include, but are not limited to, the Dubai Airport Free Zone (DAFZ), Dubai International Financial Centre (DIFC) (typically for financial services), Dubai Internet City (DIC), Dubai Media City (DMC), Dubai Multi Commodities Centre (DMCC), Dubai South (DS), Jebel Ali Free Zone (JAFZ), and Abu Dhabi General Markets (ADGM; typically for financial services).
According to the FAQs document issued by the MOF (see Corporate income tax), businesses established in free zones (in cluding financial free zones) will be subject to CT, but the CT regime will continue to honor the CT incentives currently being offered to free-zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE. There is no indication whether the free zones will amend or update their incentive regimes. Free-zone businesses will be required to register and file a CT return.
C. Miscellaneous matters
Foreign exchange controls. Neither the federal government of the UAE nor the individual Emirates impose foreign-exchange controls.
Economic substance. The UAE has introduced economic sub stance regulations for businesses (companies and branches) registered in the UAE. These regulations apply for periods commencing on or after 1 January 2019. Businesses engaged in the following activities are likely covered by these regulations and subject to compliance requirements:
• Banking
• Insurance
• Investment fund management
• Financing and leasing
• Shipping business
• Distribution and service center
• Headquarters company
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Holding company
Intellectual property business
Businesses falling within the scope of the regulations are required to self-assess through an annual notification and report on their economic substance in the UAE by way of being directed and managed in the UAE; undertaking core income-generating activities in the UAE; and maintaining adequate employees, physical assets and expenses in the UAE.
Reduced economic substance requirements apply to holding companies. Exemptions from the economic substance require ments may apply to investment funds, businesses operating entirely in the UAE as defined in the economic substance regula tions, companies resident outside the UAE for tax purposes and branches of foreign entities that are taxed outside the UAE.
Country-by-Country Reports. The UAE has also introduced Country-by-Country Report filing requirements for businesses headquartered in the UAE, applicable for periods on or after 1 January 2019.
Transfer pricing. Further to the announcement of the introduction of corporate tax in the UAE and the FAQs document (see Corporate income tax in Section B), UAE businesses will need to comply with transfer-pricing rules and documentation require ments set with reference to the OECD Transfer Pricing Guidelines.
D. Tax treaties
The UAE has tax treaties currently in force with the following jurisdictions.
Albania Hong Kong SAR Paraguay Algeria Hungary Philippines Andorra India Poland Angola Indonesia Portugal Argentina Ireland Romania Armenia Israel Russian Federation Austria Italy (limited) Azerbaijan Japan St. Vincent and Bangladesh Jersey Grenadines
Barbados Jordan San Marino Belarus Kazakhstan Saudi Arabia Belgium Kenya Senegal
Belize Korea (South) Serbia Bermuda Kosovo Seychelles Bosnia and Kyrgyzstan Singapore Herzegovina Latvia Slovak Republic
Botswana Lebanon Slovenia
Brazil Liechtenstein South Africa
Brunei Darussalam Lithuania Spain Bulgaria Luxembourg Sri Lanka Cameroon Malaysia Sudan Canada Maldives Switzerland China Mainland Malta Syria Comoros Mauritania Tajikistan Costa Rica Mauritius Thailand Croatia Mexico Tunisia Cyprus Moldova Turkey
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Czech Republic Montenegro Turkmenistan
Egypt Morocco Ukraine Estonia Mozambique United Kingdom
Ethiopia Netherlands Uruguay Fiji New Zealand Uzbekistan
Finland Niger Venezuela
France North Macedonia Vietnam
Georgia Pakistan Yemen
Greece Panama Zimbabwe Guinea
In addition, treaties with the following jurisdictions are in various stages of negotiation, renegotiation, signature, ratification, trans lation or entry into force.
Angola Dominica Monaco
Antigua and Ecuador Nepal Barbuda Equatorial Niger
Benin Guinea Nigeria
Brazil Ethiopia Palestinian
Burkina Gabon Authority
Faso Gambia Paraguay
Burundi Ghana Peru Cameroon Guernsey Rwanda Chad Guyana St. Kitts and Chile Iraq Nevis Colombia Liberia Sierra Leone
Costa Rica Libya Suriname Congo (Democratic Malawi Uganda Republic of) Mali Zambia
Côte d’Ivoire Moldova
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