The United Arab Emirates said on Monday, it will introduce a 15 per cent tax on corporate profits beginning in January 2025, aligning with global efforts to establish a minimum corporate tax rate.

This move marks a significant shift for the UAE, which has long been considered a tax haven, attracting multinational companies with its low-tax policies.

The UAE’s finance ministry stated that the decision is in line with the country’s commitment to the Organisation for Economic Cooperation and Development’s two-pillar solution, which aims to create a fairer and more transparent global tax system.

“This strategic step reflects the engagement of the Emirates to implement the two-pillar solution of the Organization of Economic Cooperation and Development which seeks to establish an equitable and transparent fiscal system,” the finance ministry said in a statement reported by AFP.

The OECD’s initiative, supported by 140 countries in 2021, aims to combat the practice of profit shifting by multinational firms to jurisdictions with low tax rates.

The new tax rate builds on reforms introduced by the UAE in 2023 when the country began taxing companies with annual profits exceeding 375,000 dirhams (approximately $102,000) at a nine per cent rate.

By adopting the global minimum tax, the UAE seeks to strengthen its position as a business hub while reducing its dependence on oil exports.

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