In the recent report released by the World Bank and PricewaterhouseCoopers (PwC), the UAE retained its 1st position in the Global Rankings for the Ease of Tax Payments. “With the least-demanding tax framework, well below the world average, the UAE has a total tax rate of 15.9 per cent, four average numbers of payments, and an average time to comply of 12 hours,” said the World Bank’s “Paying Taxes report”*.
Let’s look at what it means for the economy in general and the way of doing business in specifics.
Though the report and the index offers quantitative indicators on business regulations and the protection of property rights compared across 189 economies, yet it’s important to take note. This report also measures the actions of improvements and obstacles affecting 10 key areas of business.
Ease of the tax payments structure leads to increase in the confidence levels for investors. Mandatory tax payments are an intrinsic part of any kind of business. So, a company setup in Dubai will have to carefully consider the tax payments that need to be given out to the Government by deducting it from the employees. Thus, understanding taxation policies in this scenario becomes all the more important.
For any investor, whether it’s a Dubai Freezone company setup, company setup in Dubai, new business setup in Dubai or business setup in UAE, it’s extremely critical to first understand the tax structure of that country. Numerous studies have shown that the existence of a close relationship between countries ‘good for investors’ and the durability of the economic structure of those countries is directly proportional. This actually ensures that the economy remains stable for good growth which is nothing but growth rates that are healthy in terms of GDP, income generation and jobs creation.
Simplifying the tax structure of the country means simply that the government is serious about doing business. At the same time, making the tax structure ensures that the government actually actively encourages the investor to invest and stay invested in the economy. Why? Because with easy tax policies, the investor, even a small one, who wants to start a business in Dubai or start business in UAE is assured of a simple, easy to understand taxation policy.
It’s true that the status of the UAE has reached out globally but that’s only because of the concerted efforts of the government and its pro-investor policies.
Keeping these details in mind ensures that you are now all set for that new business setup in UAE/Dubai!