ShareDUBAI: The United Arab Emirates will introduce a corporate tax from mid-2023, the finance ministry said yesterday, in a major change of course as the country seeks to diversify its income. The Gulf financial center, long known as a tax haven and the regional headquarters for a swathe of multinationals, will tax business profits over AED 375,000 ($102,000) at 9.0 percent from June next year, a statement said.
The announcement is the latest significant move by the UAE, which switched from Friday-Saturday weekends to Saturdays and Sundays this year to align closer with global markets. "The UAE corporate tax regime will be amongst the most competitive in the world," said a statement carried by the official WAM news agency. Nine percent is at the lower end of corporate taxes worldwide.
There are no plans to introduce personal income tax or capital gains tax from real estate or other investments, the ministry said. The UAE, a major oil exporter but also a big player in business, trade, transport and tourism, is diversifying to reduce its reliance on crude. It is also facing rising competition from neighboring Saudi Arabia, the world's biggest oil exporter, which is pursuing its own drive to diversify its economy and attract foreign businesses.
"With the introduction of corporate tax, the UAE reaffirms its commitment to meeting international standards for tax transparency and preventing harmful tax practices," Younis Haji Al-Khoori, Undersecretary of the Ministry of Finance, said in the statement. Tax incentives in the UAE's free-trade zones will remain in place, it added.
Meanwhile, the UAE shot down a ballistic missile fired by Yemen's Houthi rebels during a visit by the president of the Zionist entity yesterday, the latest attack to rattle the Middle East financial hub. Nobody was hurt in the early-hours attack, the third in consecutive weeks on the wealthy Gulf nation that is part of the Saudi-led coalition fighting Yemen's Iran-backed insurgents.
"Air defense forces... intercepted and destroyed a ballistic missile launched by the Houthi terrorist group at the UAE," the ministry said, according to the official WAM news agency. It said fragments of debris fell "outside of populated areas", without giving further details. The ministry said it responded by destroying the missile launch site in Yemen's northern Al-Jawf region, releasing black-and-white footage of the explosion.
The latest rebel missile was fired as Isaac Herzog makes the first visit to the UAE by a Zionist president, after the countries established diplomatic ties under the 2020 Abraham Accords. Herzog, who met Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan on Sunday, visited Dubai's Expo 2020 site yesterday and held talks with the UAE Prime Minister and ruler of Dubai, Sheikh Mohammed bin Rashid Al-Maktoum.
Herzog said his visit "symbolizes hope, peace, and a great future for our nations, the region, and the world at large" in contrast with Iran which he accused of "destabilizing the region and using its proxies to employ terror". The Houthis' top political leader, Mahdi Al-Mashat, said "these three consecutive weekly operations show our ability and determination to carry out what we threatened until the Emirates gives up its aggression and siege", quoted by the Houthi-run Saba news agency.
Saudi Arabia and France joined the United States in condemning the Houthi attack. Yesterday's attack was the latest in a series against the Emirates. Three oil workers were killed in a drone-and-missile attack on Abu Dhabi on Jan 17 - the first deadly assault in the UAE claimed by the Houthis - and two ballistic missiles were intercepted over the capital a week later.
The attacks, which follow a spike in hostilities in Yemen, have raised Gulf tensions further at a time when international talks over Iran's nuclear program are floundering and have helped push oil prices to seven-year highs. The Iran-backed Houthis began attacking UAE interests after a series of defeats on the ground in Yemen, inflicted by the UAE-trained Giants Brigade militia. In early January, the rebels seized a UAE-flagged ship in the Red Sea, saying it was carrying weapons - a claim denied by the Emirates.
Houthi military spokesman Yahya Saree said the rebels targeted Abu Dhabi with a number of ballistic missiles and Dubai with multiple drones. He also warned "citizens, residents and companies to stay away from... vital facilities as they are at risk of being targeted in the coming period". The UAE's defense ministry said it blew up the launch site at 12:50 am UAE time (2050 GMT), exactly 30 minutes after the missile was intercepted.
The Emirates affirms its "full readiness to deal with any threats" and will "take all necessary measures to protect the UAE from any attacks", it added. The UAE authorities said that the incident had no impact on air traffic, with flight operations proceeding normally. A senior Emirati official last week vowed that Houthi attacks will not become a "new normal" for the Gulf country, a trade, business and tourism center and a major oil exporter. The UAE withdrew its troops from Yemen in 2019 but remains an influential player. It also hosts American troops and is one of the world's biggest arms buyers. - AFP
