For a considerable period of time, the UAE enjoyed an international reputation as a "tax-free haven". Indeed, a tax-free system was commonplace in the Emirates just a few years ago. However, in an effort to respond to new global and local economic challenges, the UAE authorities have gradually begun to transform the country's tax policy. At present, the country's tax system, while still at its early stages of development, is actively evolving with the adoption of new legislative acts.
This article examines current legislative changes in the tax law of the UAE, types of main taxes in the UAE, and main features of the local tax system.
In 2016, the Federal Tax Authority (FTA) of the UAE was established, marking a significant step in the development of the local tax system. Following this step, in 2017 the UAE introduced excise tax, which represents an indirect tax on specific goods that are considered harmful to human health or the environment. The excise tax is governed by Federal Decree-Law No. 7 of 2017 and is currently applicable to certain groups of goods.
In 2018, following the example set by many...