UAE Taxes For Multinational’s

The corporate income taxes (CIT) which have been introduced by the United Arab Emirate’s government will exempt many companies , but multinationals will not get away with it.

Our previous blog about multinationals  covered the basic information. This includes which companies are considered multinational as well as the rate of the tax which will be payable. The subjected companies are ones which make an overall annual income of €750 million (AED 3.15 billion). The presumed payable rate of CIT is 15%.

Disclaimer:

Since the UAE Ministry of Finance (MoF) has not yet released the full details of the tax regime, this information is only provisional. The rates and rules are still subject to change in the coming months.

Will multinationals follow the same tax regime as smaller businesses?

The short answer to this question is no. While multinationals may be subject to some of the same guidelines as smaller companies, there are some differences in the way that they will be taxed. Firstly, since many multinationals operate in multiple jurisdictions, the filing will be somewhat more complicated. Secondly, a higher rate will apply to companies that are also subject to pillar two.

Will multinationals in free zones be exempt?

Unlike with regular free zone companies which will be exempt from paying the CIT, multinationals which are registered in free zones may still be subject to the tax.

How will the CIT regime mix with pillar two?

Under pillar two, multinational companies will have to pay at least 15% tax in each jurisdiction that they operate in. Due to this the filing of taxes for multinationals may be somewhat more taxing administratively.

Pending more clear information from the government itself, we already know that multinationals might be subject to both the tax regimes (CIT and pillar two). To learn more about pillar two, please head over to the following post: “The 2 Pillar System of the UAE Corporate Tax”.

Leave a Reply

Your email address will not be published.