In a significant move to enhance its investment environment, the UAE has amended its VAT law to exempt investment fund management services and certain virtual asset services. This change aims to stimulate growth and support innovation within the financial sector [252b21a9]. The Ministry of Finance has also introduced exemptions for in-kind donations up to Dh5 million ($1.36 million) between charitable and government entities, further simplifying the tax landscape for taxpayers [252b21a9].
These amendments come as part of the UAE's broader strategy to strengthen tax compliance and streamline procedures, aligning with international best practices and stakeholder recommendations [252b21a9]. Since the introduction of VAT at a rate of 5% in 2018, the government has focused on diversifying its economy, and the latest changes reflect a commitment to fostering a more favorable investment climate [252b21a9].
In related news, the UAE's government revenue for the fourth quarter of 2023 rose by 8% to Dh155.9 billion ($42.45 billion), indicating a positive trend in economic performance [252b21a9]. The recent developments in tax policy, including the new exemptions, are expected to further enhance the UAE's attractiveness as a destination for investment and innovation, particularly in the rapidly evolving sectors of fund management and virtual assets [252b21a9].
Additionally, the National Pension Authority has requested the National Board of Revenue to take action for tax rebates on Universal Pension deposits, aiming to provide financial benefits to individuals who have invested in the Universal Pension Scheme [929d1668]. Meanwhile, HM Revenue & Customs (HMRC) in the UK announced that it will be publishing additional guidance for UK businesses on complying with the OECD's Pillar Two global minimum corporate tax rules, highlighting the importance of compliance in the financial sector [6f91fca4].
Dubai Customs has processed 994,000 deposit claim refunds worth AED 6.8 billion in the first nine months of this year, marking a 22% increase compared to the same period last year [a105846f]. The increase in transactions aligns with Dubai's economic agenda and objectives to create an ideal investment environment. Dubai Customs' advanced innovations and systems are driving automation and streamlining deposit claim processes to support the expansion of Dubai's non-oil foreign trade [a105846f].
As the UAE continues to implement new tax regimes and streamline its financial regulations, businesses operating within its borders are encouraged to stay informed and compliant to maximize the benefits of these changes [252b21a9].