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Friday, December 8, 2023

Experts see UAE’s corporate tax as a key economic milestone

The introduction of corporate tax in the UAE represents a significant milestone in the nation’s economic journey, as highlighted by experts during an event organized by the Institute of Chartered Accountants of India (ICAI) Dubai chapter.

The event, titled “Impact of Corporate Tax – Is it Free for Free Zones?” aimed to delve into the impact of corporate tax regulations on UAE’s free zones, examining their role in shaping business dynamics, influencing investments, and fostering economic growth.

As the largest professional body in the UAE, ICAI played a pivotal role in raising awareness and understanding of crucial financial matters for regional businesses. The event provided participants with insights into the Corporate Income Tax (CIT) law and explored the motivations behind the UAE’s decision to implement increased taxation.

Harikishan Rankawat, Chairman of the ICAI Dubai Chapter, emphasized that the introduction of a 9% headline tax rate is expected to encourage transparent financial reporting, facilitating economic transformation and reducing dependence on oil-based revenues. However, the law also presents challenges for individuals with multiple sole-ownership companies.

Jaiprakash Agarwal, Secretary of the ICAI Dubai Chapter, stated, “The UAE, known for its business-friendly environment, has attracted global investors seeking favorable tax policies. The introduction of excise duty in 2017 and corporate tax in 2023 marks a pivotal step in the nation’s economic journey.

With a corporate tax rate of 9%, significantly lower than the global average of 23%, the UAE’s unique tax structure positions it as an attractive investment destination.”

Guest speaker Sharad Bandari, Managing Partner of Ardent Advisory & Accounting LLC, discussed the UAE Corporate Tax and its role in strengthening the nation’s position in both the national and international markets.

He emphasized how the UAE corporate law focuses on enhancing transparency, ensuring accurate reporting, and providing informed decision-making for investors, drawing inspiration from established tax jurisdictions worldwide.

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