Analysis: UAE corporate tax may dilute competitive edge, as Saudi Arabia steps up | Reuters
The United Arab Emirates' plans for a corporate tax risk eroding one of its main attractions as the Gulf's premier destination for foreign firms, at a time when Saudi Arabia is opening up and pressuring multinationals to shift regional headquarters there.
As the UAE aligns itself more with the global economy, Saudi Arabia is using its clout as the world's top oil exporter and biggest Arab economy to vie for capital, giving firms until 2024 to set up regional bases in Riyadh or lose out on lucrative contracts.
The standard UAE corporate tax rate of 9%, to be imposed from mid-2023, is below the 20% Saudi levy on foreign-owned firms. But tax experts said large multinationals are likely to pay 15%, in accordance with an OECD agreement on global minimum tax to which the UAE is a signatory. read more
"There will be a different rate for large multinational organisations. We expect this to be 15%," Tatyana Rahmonova, international tax senior manager at accounting and consulting firm PwC Middle East, said in a presentation this month.
Freewheeling UAE, the region's commercial hub and a magnet for the global ultra-rich, is taking tax cooperation and the tackling of illicit finance more seriously, but still retains much of its tax-free system, including within free zones.
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