Nov 29, 2017 
Accounting
Introduction of vat in uae unlikely to deter foreign investors analyst
- The possible introduction of value added tax and corporation tax in the United Arab Emirates is unlikely to deter international investors, an analyst has said.The UAE is hoping to finally complete drafting laws for VAT by the third quarter of 2015, after mulling the plan for several years, officials have said.
- The country, expected to post its first budget deficit since 2009 this year, has been hit hard by the recent drop in oil prices.The UAE, along with the Gulf Cooperation Council countries, are now seeking to diversify away from oil and are currently in the process of reaching a common agreement for the implementation of VAT.Once a decision to impose VAT is made in the UAE, the public will be given at least 18 months to prepare, the finance ministry has said.
- Founding partner of advisory company The Links Group John Martin St. Valery said: “Plans to introduce a federal tax system have been mooted for some time now as the UAE steps up efforts to consolidate non-oil revenues.“Although a major shift in fiscal policy from a country widely recognised for its low tax status, we consider this a sign of a maturing market, with a diminishing natural resource, taking the long term seriously.”Although the new taxes will necessitate changes to the administration of locally-registered companies, the anticipated low rate of taxation is unlikely to impact foreign investors, who are typically familiar with these types of taxes, he said.
- “These taxes are also an indication to foreign investors that the UAE government recognises offering and implementing world-class infrastructure services comes at a cost.“The benefits of existing infrastructure, geographical location and ease of travel, communication, and safety and security of the country more than outweigh any perceived costs,” he stated.While
