UAE to Enact 15% Corporate Tax in 2025, Moving Away from Tax Haven Status
The United Arab Emirates (UAE) announced on Monday that it will introduce a 15% tax on corporate profits, effective January 2025. This policy shift signifies a departure from the country’s longstanding reputation as a tax haven, which has been a major draw for multinational corporations due to its previous low-tax framework.
The UAE’s finance ministry highlighted that this decision aligns with the nation’s commitment to the Organisation for Economic Cooperation and Development (OECD) and its two-pillar solution aiming to foster a more equitable and transparent global tax system. “This strategic initiative underscores the UAE’s dedication to adopting the OECD’s two-pillar framework, which strives for a fair fiscal environment,” the ministry stated, as reported by AFP.
The OECD’s initiative, which has the backing of 140 nations since its launch in 2021, seeks to curb the trend of multinational corporations shifting profits to jurisdictions with lower tax rates. The new corporate tax will build on previous reforms introduced in 2023, when the UAE began taxing companies with annual profits exceeding 375,000 dirhams (approximately $102,000) at a rate of 9%.
By embracing the global minimum tax, the UAE aims to reinforce its position as a key business hub while also diminishing its reliance on oil revenues.
Join our Channel...