MOVERS & shakers
Everything you need to know about... Corporate tax and VAT in the UAE
How will the introduction of corporate tax and VAT affect the UAE’s competitiveness?
The UAE’s strong economy, growing market, efficient government, free zones and its move towards becoming a smart city are aspects that draw investors to the country and will continue to remain high on the list of deciding factors for inbound investments. Despite these, the government should implement incentives such as tax breaks for investors and entrepreneurs looking to set up their business in the UAE. The government could also consider keeping the UAE’s free zones tax free as an added incentive; however, practical implementation should be taken into consideration. Tax is not the only key factor for attracting in-bound investments. However, it could be argued 38
implementing taxes in the UAE may urge investors to look at other developing markets such as Asia and Africa; however, we must bear in mind that these countries already have indirect tax, corporate tax and income tax systems in place.
What are the pros and cons of introducing corporate tax and VAT in the UAE?
The introduction of any new taxation system is a major change and individuals and organisations, as well as the government itself, are going to take some time to adapt to any new system. It is important to provide proper guidance and support to all the UAE businesses to acquaint themselves with the requirements. Further motivation in the form of a reasonable adjustment period, trainings and revenue threshold
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