A proposal to introduce corporate taxes is still under study, UAE’s minister of state for financial affairs was quoted on Wednesday as saying.
Obaid Humaid Al Tayer repeated previous statements that the UAE, a major OPEC oil producer, has no plan to impose income taxes on individuals despite a steep fall in crude prices over the past months.
UAE not affected by drop in oil price
Speaking to reporters after a Federal National Council session on Tuesday, he said the drop in oil prices has had no impact on the federal budget and projects.
He noted that the federal budget is financed through contributions by Abu Dhabi and Dubai as well as government investments and other sources, Emirates 24|7 has reported.
Remittance tax under study
“There is no plan to impose income tax on individuals. There has been a study to introduce fees on cash remittances by foreign workers in the UAE, but no decision has been taken yet as we need to know the size of these remittances and the workers’ categories.”
Tayer said a draft law to introduce corporate income taxes is still in its first stages and that there are consultations between local governments in this respect.
“This income tax on companies is still within the framework of the corporate tax draft law…it is still in the first phase and no agreement has been reached yet,” he said.
VAT could be enforced in 2018
Asked about the planned value-added tax (VAT), the minister said it could be enforced in 2018 or 2019 in case it is approved by the six-nation Gulf Cooperation Council.
“The private sector needs to know which items would be taxed and needs to be given 18 months to enforce it after it is endorsed,” he said.
“Things will become clear in the first quarter of 2016…but there will be no individual decision to enforce this tax as it will be enforced by all GCC members.”