fDi Markets Newswire:

Home / Locations / Middle East & Africa / UAE / UAE to impose value-added tax in 2018

Introduction of VAT has put a question mark over the UAE’s status as a tax-free haven. Natasha Turak reports.

The United Arab Emirates (UAE) ministry of finance says it intends to introduce value-added tax (VAT) to most goods and services by January 1, 2018. VAT is expected to be applied at 5%, and extended to the wider Gulf Co-operation Council (GCC) region.

The move is largely designed to increase and diversify the region’s revenue base as it decreases reliance on hydrocarbons, the mainstay of the economy. The International Monetary Fund estimates GCC governments will face a combined deficit of about $530bn over the next five years, based on an oil price of $56 a barrel.

The UAE Ministry of Finance’s website says: “VAT will provide our country with a new source of income, which will contribute to the continued provision of high-quality public services into the future. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.”

Some worry that this may blemish the UAE’s status as a tax-free haven as legally, occupants of the country’s many free zones are guaranteed a 30-year tax holiday. Whether the VAT will be applied to companies in the country’s free zone community is not yet known. 

This article is sourced from fDi Magazine
fDi Magazine

fDi Markets - request a demo

fDi Markets

Crossborder investment monitor

fDi Markets - Cross border investment monitor

fDi Markets is the only online database tracking crossborder greenfield investment covering all sectors and countries worldwide. It provides real-time monitoring of investment projects, capital investment and job creation with powerful tools to track and profile companies investing overseas.

Click here to find out more about fDi Markets

Corporate location benchmarking tool

fDi Benchmark is the only online tool to benchmark the competitiveness of countries and cities in over 50 sectors. Its comprehensive location data series covers the main cost and quality competitiveness indicators for over 300 locations around the world.

Click here to find out more about fDi Benchmark

Research report

fDi Intelligence provides customised reports and data research which deliver vital business intelligence to corporations, investment promotion agencies, economic development organisations, consulting firms and research institutions.

Find out more.
Follow us on Twitter

By continuing to use this site you consent to the use of cookies on your device as described in our cookie policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them.