UAE: The new corporate income tax will have ripple effects across the GCC

GULF COUNTRIES - Report 01 Feb 2022 by Justin Alexander

* The 9% tax could raise as much as 1.6% of GDP in incremental revenue, similar to the VAT.
* A higher rate of up to 15% is expected to be applied to large multinationals, but has not been specified yet.
* The change is motivated more by compliance with BEPS than the need for fiscal revenue.
* The methodology for distribution is not known and will be important for the northern emirates such as Sharjah.
* Oman’s relative competitiveness for FDI will improve versus the UAE.
* This leaves Bahrain as the only zero-tax Gulf state, but this is unlikely to last long.
* Other Gulf states with zero or low taxes on local firms may also reconsider.

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