Deloitte ME Tax webinar
The issue of a Global Minimum Tax rate has become one of the most widely discussed issues in international taxation and understandably so. On 5 June 2021, the G7 Finance ministers agreed on a Global Minimum Tax rate of at least 15%. Under the proposal, the minimum 15% income tax will apply on multinationals’ profits that are currently not subject to corporate income tax (e.g. United Arab Emirates (UAE) profits) or subject to corporate income tax at a rate lower than 15%. The intention behind this proposal is to “end” tax competition between countries.
Countries like the UAE and Bahrain will now need to evaluate the potential implications of this agreement including what their options are and how they might respond. Likewise, businesses operating in these countries will need to evaluate how they will be impacted under different scenarios.
In light of the above, we held a webinar on Wednesday, 7 July 2021 where we discussed this historic development from the perspective of the UAE and Bahrain as both countries currently do not levy direct corporate income tax. Our tax experts covered the following topics:
- What are the potential options on how the UAE and Bahrain might respond?
- What are the implications and pros/cons of the scenarios, both for UAE and Bahrain based businesses?
- What might a UAE and Bahrain corporate income tax system look like and how might Free Zones be treated?
- Will the Global Minimum Tax end tax competition? What might be the impact on Foreign Direct Investment?
- What might be the effect on non-tax competition between countries?
Mohamed Serokh
