Abu Dhabi – Mubasher: The UAE government has begun preliminary studies to impose taxes on companies in the UAE, Younis Al Khouri, under-secretary of the UAE’s Ministry of Finance (MoF) said in a statement.
The ministry will coordinate with the concerned entities at the local and federal levels in order to reach an initial perception of a proposed system for imposing corporate taxes in the coming period, Al Khouri said.
He indicated that the tax procedure law, discussed by Federal National Council (FNC UAE) in June, has been submitted to the competent authorities to proceed with the issuance procedures, which will act as the main umbrella for transactions, systems, taxation laws once approved and issued.
Talks over the value-added tax (VAT) and selective tax have progressed and are moving forward, whereas the corporate tax law is still in its early stages, the MoF official stated.
The federal tax authority has made the necessary preparations with the competent authorities to begin the mandatory application of the selective tax in the fourth quarter of 2017, Al Khouri added.
He said that registration will be open to businesses that import, produce, or store selective goods during Q2-17.
The UAE will implement the VAT at 5% effective 1 January 2018.
UAE finance minister Obaid bin Humaid Al Tayer previously said he expected the VAT implementation to have a meagre effect of around 0.04% on the UAE’s gross domestic product (GDP).
The UAE forecasts returns ranging between AED 10 billion and AED 12 billion ($2.7 billion to $3.2 billion) from applying the VAT on all products and services in the first year, with the exception of 100 essential commodities.
