Skip to content Skip to Search
Skip navigation

OECD rates UAE’s free zone corporate tax ‘non-harmful’

REUTERS/Phil Noble
The UAE’s free zone corporate tax regime was evaluated and confirmed to align with global initiatives to prevent tax avoidance and harmful tax practices

The UAE free zone corporate tax (CT) regime has been recognised as ‘non-harmful’ by the Paris-based policy forum Organisation for Economic Co-operation and Development (OECD), the Gulf state’s finance ministry said.

The findings were disclosed in the results from an October 2023 meeting on harmful tax practices, the UAE state-owned Wam news agency reported.

The rating is part of the OECD’s comprehensive review of 322 taxation regimes worldwide.

According to the findings, the UAE’s free zone corporate tax regime was evaluated and confirmed to align with global initiatives to prevent tax avoidance and harmful tax practices.

“The OECD rating of ‘non-harmful’ is a testament to the UAE’s commitment to transparency, non-harmful taxation, and the implementation of best practices in tax policy,” said Mohamed Hadi Al Hussaini, minister of state for financial affairs.

The ministry remains dedicated to further refining the country’s nation’s tax framework, ensuring its economic diversification and development, he added.

The UAE introduced its nationwide corporate tax regime in 2023 as a strategic move designed to accelerate the UAE’s development and transformation, aligning with its long-term strategic objectives to diversify its economy.

As per the finance ministry, corporate tax rates are zero percent for taxable income up to AED375,000 ($100,000) and nine percent for taxable income above AED375,000.

Free zones are central to the UAE’s economic growth, attracting foreign direct investment and fostering a favourable business environment.

The recognition by the OECD comes as AGBI reported last week that the UAE has made “positive steps” to meet anti-money laundering and terrorism funding standards and is likely to be removed from an international grey list later this month.

Experts say this will provide a major boost to the Gulf state’s economy.

The country was placed under enhanced supervision – known as the grey list – in March 2022 after the Financial Action Task Force (FATF) cited “strategic deficiencies” in the systems it uses to counter financial crime.

A decision on the UAE’s grey list status is expected to be made on February 23.

Latest articles

Knight Frank predicts that the value of the Saudi Arabia's construction projects will grow to $181.5 billion by the end of 2028

Riyadh dominates Saudi Arabia’s construction market

Riyadh and its surroundings account for nearly 40 percent of the value of existing construction contracts in Saudi Arabia, at US$54 billion, according to new research. The provinces of Mecca – which includes Jeddah – and Tabuk in the north of the kingdom follow the capital region, with $28.7 billion and $28.5 billion in awarded […]

Mubadala injects $250m to revive Turkey’s Getir

Abu Dhabi’s Mubadala Investment Company will invest $250 million in Turkish grocery delivery startup Getir as part of a restructuring programme that will split it into two standalone units. The first standalone business will focus on domestic online groceries and food delivery services, with Mubadala, an existing shareholder, holding the management and majority stake, Reuters […]

Properties overlooking the bay in Muscat. Property prices in the capital fell more than 5 percent

Oman’s real estate sector continues to slide

Apartment prices in Oman dropped more than 17 percent in the first quarter of 2024, while villa prices rose a meagre 0.8 percent, according to the latest government figures. Residential real estate prices were down across the board quarter on quarter, including those for land. The Musandam region recorded the largest overall decline at 15.7 […]

Shoppers choose vegetables in Istanbul; inflation means people are spending on essentials

Turkish retailers’ confidence wavers as inflation bites

Confidence is falling among Turkish retailers, according to a survey from the country’s statistics agency Turkstat. Shoppers have been scaling back on big-ticket purchases, spending instead on basic consumer goods as inflation piles pressure on household incomes. May’s business confidence report, released by Turkstat on June 24, showed sentiment in the retail sector at its […]