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The UAE Will Keep VAT At 5% For The Foreseeable Future

VAT UAE tax

The UAE government plans to keep the value-added tax rate at 5% for the foreseeable future.

If you’re worried about the cost of value-added tax (VAT) going up in the UAE, we have some good news. The UAE government plans to keep the rate at 5% for the foreseeable future.

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This was confirmed by Obaid Al Tayer, Minister of State for Financial Affairs, at the recently held Arab Fiscal Forum, where he told reporters that, for the next five years at least, the rate of VAT will stay the same.

He also said that the excise tax, which applies to fizzy drinks, energy drinks and tobacco products, will stay the same during this period.

And more good news came in the fact that Al Tayer confirmed there were no plans to introduce income tax in the UAE. In many other countries, income tax is charged on your salary before it hits your account, but the UAE is so far avoiding that. Certainly the lack of income tax in the UAE is part of the reason why many expats choose to live here.

Al Tayer’s comments come off the back of a report released by S&P Global Ratings, which said that it expects some GCC countries to double the rate of VAT to 10%. Naturally that would raise government revenues. Thankfully, that looks like it won’t happen in the UAE any time soon.

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However, if you’re a business owner, Al Tayer did have more pressing news. He said that the UAE is studying possibilities for a framework for corporate tax. While he didn’t elaborate on what corporate tax would look like in the UAE, this does signal that the government is thinking about ways to implement it.

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