Corporate tax in UAE ‘is going to happen’

[ih8socialism]

Has anyone told them the ONLY reason businesses are in UAE is because its tax free? Do they think people actually like living or doing business under a one man dictatorship with no rights, voting ability or political representation and then have to pay tax for that privilege? Such GCC arrogance. They are having a laugh if they think taxation with no representation will work. Unless they have the lowest (> 0%) tax rate in the world it sounds ominous.

Then following that they will consider introducing personal tax.....lol. Hey good luck to them.

IMO UAE could survive a small corporate tax like 5% but not much higher. And well a personal tax would be suicide for UAE lol. Without expats you could literally just close down whole UAE or integrate it into KSA lmao

 

[Martin Everson]

I would expect at least 10% or more corporate tax rate to remove tax haven status.

Also:

UAE businesses need to soon be in sync with 'Economic Substance Regulations'

 

[Davis123]

IMO UAE could survive a small corporate tax like 5% but not much higher. And well a personal tax would be suicide for UAE lol. Without expats you could literally just close down whole UAE or integrate it into KSA lmao

Businesses already have vat of 5 percent. They are already suffering due to Corona and could not survive Covid and shut down now. They will just leave. Already happened with implementation of VAT in 2018 when plenty of companies left for 0 tax havens as evident by closure of Ajman freezone office in Dubai. It will be like suicide. Remember tax attorneys and CPAs want to keep doing this to make their $$ and that is why we see IRS gaining nothing from overseas taxes on its citizens living overseas. Only the compliance industry in USA is happy. US didn't sign on OECD treaty to share but shoved it on every govt threatening them with their correspondence accounts in USD. Many trusts, corporations, wealthy rich from many EU and the rest of the world moved their offices from Switzerland to gain 0 percent taxation and reporting. The information is available out there. This was just to get money from the rest of the world to deposit in its banks and keep their economy floating.

 

[ih8socialism]

Businesses already have vat of 5 percent. They are already suffering due to Corona and could not survive Covid and shut down now. They will just leave. Already happened with implementation of VAT in 2018 when plenty of companies left for 0 tax havens as evident by closure of Ajman freezone office in Dubai. It will be like suicide. Remember tax attorneys and CPAs want to keep doing this to make their $$ and that is why we see IRS gaining nothing from overseas taxes on its citizens living overseas. Only the compliance industry in USA is happy. US didn't sign on OECD treaty to share but shoved it on every govt threatening them with their correspondence accounts in USD. Many trusts, corporations, wealthy rich from many EU and the rest of the world moved their offices from Switzerland to gain 0 percent taxation and reporting. The information is available out there. This was just to get money from the rest of the world to deposit in its banks and keep their economy floating.

Well the 5% VAT was still fine for people who were not doing business in the Gulf Area due its only charged when you make business with other GCC countries

I would expect at least 10% or more corporate tax rate to remove tax haven status.

Also:

UAE businesses need to soon be in sync with 'Economic Substance Regulations'

Why would we choose then UAE over lets say ireland with 12.50%. Unless you do business in UAE there is no real reason to stay there then with yout company

 

[Davis123]

Davis123 said:
Businesses already have vat of 5 percent. They are already suffering due to Corona and could not survive Covid and shut down now. They will just leave. Already happened with implementation of VAT in 2018 when plenty of companies left for 0 tax havens as evident by closure of Ajman freezone office in Dubai. It will be like suicide. Remember tax attorneys and CPAs want to keep doing this to make their $$ and that is why we see IRS gaining nothing from overseas taxes on its citizens living overseas. Only the compliance industry in USA is happy. US didn't sign on OECD treaty to share but shoved it on every govt threatening them with their correspondence accounts in USD. Many trusts, corporations, wealthy rich from many EU and the rest of the world moved their offices from Switzerland to gain 0 percent taxation and reporting. The information is available out there. This was just to get money from the rest of the world to deposit in its banks and keep their economy floating.

Well the 5% VAT was still fine for people who were not doing business in the Gulf Area due its only charged when you make business with other GCC countries



Why would we choose then UAE over lets say ireland with 12.50%. Unless you do business in UAE there is no real reason to stay there then with yout company

Well EU citizens can but not the rest of the world can move to Ireland easily like UAE and by far Ireland is superior. If Ireland can give residencies like UAE we will all move to Ireland. Then EU might be happy but UAE will loose.

 

[JustAnotherNomad]

So then everybody will go to Qatar instead? If the UAE makes itself less attractive, someone else will profit.

 

[Davis123]

Well the 5% VAT was still fine for people who were not doing business in the Gulf Area due its only charged when you make business with other GCC countries



Why would we choose then UAE over lets say ireland with 12.50%. Unless you do business in UAE there is no real reason to stay there then with yout company

EU is already mad at Ireland due to taxation on Apple and Luxembourg for Amazon.com. Hmm let's see they might change Ireland's low rate ?

 

[Davis123]

So then everybody will go to Qatar instead? If the UAE makes itself less attractive, someone else will profit.

Qatar no way. Doha is creepy. Dubai is best and so is Abudhabi but Dubai is still best hands down. Too bad all good things come to an end by their own doing.

 

[ih8socialism]

Qatar no way. Doha is creepy. Dubai is best and so is Abudhabi but Dubai is still best hands down. Too bad all good things come to an end by their own doing.

Qatar indeed is weird and boring as hell, even Saudi is more fun tbh. Qataris are very arrogant and narrow minded. Well Al Thani means "the second ones", so they are named like that for a reason lol

 

[buenosdias]

Wow! I never would’ve guessed that UAE would come to this. Well, such is life.

Personally, I don’t think any legit business would want to stay in that expensive desert with a tax rate. @Martin Everson is right. They’ve spent too much time in lockdown in that desert, they’ve gone nuts.

Also, thx for OP for sharing.

 

[JustAnotherNomad]

I would not be surprised if the corporate income tax affected businesses that do local business, like with VAT. Let them tax the malls a bit more, it won’t kill them.
But the moment they start taxing international businesses, I’m sure it would backfire.

 

[Martin Everson]

Why would we choose then UAE over lets say ireland with 12.50%. Unless you do business in UAE there is no real reason to stay there then with yout company

Thats the whole point of these actions being taken against UAE the Caribbean etc - to remove those countries competitive advantage . Then later force them into a system of debt servitude to weaken their independence.

 

[Martin Everson]

EU is already mad at Ireland due to taxation on Apple and Luxembourg for Amazon.com. Hmm let's see they might change Ireland's low rate ?

Yes EU is eyeing Ireland's tax practices. Harmonizing taxes across EU with a minimum tax rate is almost certain with proposals going on for a global solution. They will start with multinational companies before reaching smaller companies. And you know how it goes just like CRS if you don't sign up for it then expect that country to be on a blacklist at some point in time .

Pillar Two: global effective minimum taxation

Minimum effective tax rate on global multinational profits | VOX, CEPR Policy Portal


--- start quote

A minimum effective tax of 20% on multinationals’ foreign profits would dampen fiscal competition across countries by reducing the incentive of low- or no-tax jurisdictions whose effective tax rate is below this rate. A 20% minimum tax should also reduce the incentive of firms to locate in these countries as long as profit shifting implies positive costs.

--- end quote

 

[Konstanz]

I think if they introduce CIP it would be at least 9%. At least a minimum what EU has.
Anyway, this would be the start of the end of Dubai, UAE what we know of.
The personal income tax would remain at 0%. But I don't believe many expats would have this motivation to move there only about personal income tax.
What do you think?

 

[JustAnotherNomad]

I don’t think anything like that would happen. I feel that the UAE government is well aware why everyone is there. Quite the opposite, I feel that even the substance regulations are only lip service. So now you need to have a proper office and not a flexi desk solution for your company. So they have all these empty offices. Everybody knows they don’t care.

KSA tripled the VAT - the UAE didn’t follow.
I would think they will probably implement some CIT, but it will be territorial or only apply to transactions GCC transactions. They can’t be so stupid to kill the only thing they have going for themselves.

Also, even if they introduce CIT - so what, then you just use a UK LLP or some other structure that is taxed on the partner level.
I’m sure the Apple Store in the Dubai Mall will survive some CIT.

 

[Konstanz]

We will see how it goes, but under this pressure of EU it could well be back on the blacklist again if they don't introduce CIP.
It's not only about UAE, but rather EU politics sitting in Brussells and Strasbourg. UK is now Brexit and don't have voice to backup UAE

 

[Davis123]

Malls are affected by Corona so much already. They do realize the economic effects by studying net flow of traffic and low amount of VAT collected. UAE govt has told landlords to delay their service charge payments to developers for one year. Don't know how this Covid 19 will end up.