UAE To Revise Service Fee Structures

On 23 March 2022, the UAE MoF announced that it will resume studying the service fee structures across all ministries and federal entities, with the aim to create a thriving business environment, bolster national economy and attract more foreign investments.

In the wake of the UAE's federal government's decision on 31 January 2022 to introduce corporate tax for business, the aim of this review is to revise the service fee structures that are related to commercial and regulatory activities.

Objectives of the service fee structure review

• Strike a balance between the country's financial policies and the financial sustainability of the UAE federal government.
• Enhance the role of the UAE in supporting business growth at both the local and at the international level.
• Establish the financial sustainability of the federal government in accordance with the best international practices.
• Promote the UAE as a regional business hub for international companies.

Key Takeaways

01 June 2023

• Following the announcement by the UAE MoF of the introduction of the UAE Corporate Tax on business profits for entities with financial years starting on or after 1 June 2023, this decision by the UAE MoF attempts to reduce government fees and to strike a balance between the country's financial policies and the financial sustainability of the federal government while supporting business growth and promoting the country as regional headquarters for major international companies.

Corporate Tax

• The Director of the Dubai's Department of Finance has announced that the fees imposed by the government of Dubai on commercial activities are affordable in the absence of corporate tax. However, following the introduction of corporate tax, a revision of the fees will be undertaken to examine the possibility of gradually reducing them in line with emergent trends.

UAE MoF

• The UAE MoF will co-ordinate with the local governments of the Emirates to promote the goals of the fees revision and support the competitiveness of the UAE's business environment. Such measures are especially welcomed after the global slowdown caused by the Covid-19 pandemic, which were countered with the introduction of several economic stimulus measures worth up to Dh388 billion ($105.65bn) to offset the effects of the pandemic.