Except for VAT and corporate tax on oil and gas companies and branches of foreign banks, the UAE does not impose corporate tax on businesses registered onshore. However, several recently implemented transparency initiatives, related to the OECD’s BEPS project and international exchange of information, could have material impact on business operations (i.e. economic substance rules).

United Arab Emirates

Notable tax developments – Direct and indirect

(e.g. payment deferrals, rate reductions)

  • On 26 August 2020, Cabinet Resolution No. 44 of 2020 amended country-by-country (CbC) reporting rules in the United Arab Emirates (UAE), specifically the definition of “reporting entity”, to identify the ultimate parent entity of an MNE group (tax resident in the UAE) as the only entity of the MNE group required to comply with CbC reporting obligations. 
  • Additionally, on 28 August 2020, the UAE Ministry of Economy published Cabinet Resolution No. 58 of 2020 (the Decision) on the “Regulation of Procedures Related to Real Beneficiaries”. The Decision requires entities licensed in the UAE—except entities in financial freezones and entities directly or indirectly wholly owned by the federal or emirate government—to maintain registers of their beneficial owners and shareholders. Further, the decision also requires companies to file their registers with the relevant registrar and licensing authorities.
  • As part of the UAE’s commitment as a member of the OECD’s Inclusive Framework on BEPS, Economic Substance Regulations (ESR) were introduced effective from 1 January 2019. With the first year of ESR compliance completed for most businesses, UAE authorities have started reviewing ESR filings and have commenced information exchange procedures. Businesses that have conducted Relevant Activities must file a Notification within six months of the end of the financial year (e.g. for FY 31 December 2020, the Notification is due by 30 June 2021). Businesses that have derived income from Relevant Activities must meet the economic substance tests and file a report within 12 months of the end of the financial year (e.g. for FY 31 December 2020, the report is due by 31 December 2021). 
  • In determining whether businesses have met the substance requirements, the Ministry of Finance (MOF) advised that UAE authorities will consider the impact of Covid-19 on the usual operations of businesses. These considerations only apply to the substance requirements directly affected by Covid-19 measures (e.g. travel restrictions, self-isolation situations or quarantine requirements). Particular consideration will be given to the impact of restrictions on the ability to meet the ‘directed and managed’ test. As a prudent measure, businesses should consider alternative arrangements to address issues in meeting substance requirements due to Covid-19 restrictions. 
  • To further enhance its reputation as an investment-friendly jurisdiction, the UAE recently enacted several landmark changes. The most notable one is the amendment to the Commercial Companies Law, which has abolished the required minimum UAE ownership percentage (i.e. 51%) in mainland companies (in certain approved sectors) effective 1 June 2021. This will allow mainland companies (existing and new) to be 100% foreign owned upon obtaining approval from the relevant authorities in each emirate. Further details, such as the list of approved sectors and the application process, are yet to be released. 
  • On 1 July 2021, the UAE (along with Oman) became a signatory to the OECD BEPS 2.0 July Statement, in which OECD Inclusive Framework members agreed to adopt aspects of the BEPS 2.0 Pillar 1 and Pillar 2 proposals. One of the most significant features of this is that signatories agreed to a global minimum tax rate of at least 15%. The UAE currently does not have a corporate income tax regime, however based on the July Statement, the UAE may consider implementing a corporate tax regime in the future

Employment-related measures

(e.g. state compensation schemes, training)

  • The Federal Authority for Government Human Resources (FAHR) has issued a circular addressed to all ministries and federal entities, concerning the amendment of some procedures to deal with the Covid-19 pandemic at the federal government level in coordination with the Ministry of Health and Prevention.
  • All federal government employees are required to perform a nasal swab test PCR test every 48 hours, with the exception of employees who have received the two doses of the Covid-19 vaccine.
  • The UAE Cabinet has adopted a Strategy for Talent Attraction and Retention to contribute to strengthening the country's leading position as a preferred destination for living, working and investing.
  • The strategy for talent attraction and retention has three main targets: positioning the UAE among the top 10 countries in global talent competitiveness indices, ensuring the availability talent across all strategic sectors, and to cement the UAE’s image as an ideal destination for living and working

Economic stimulus measures

(e.g. loans, moratorium on debt repayments)

  • The UAE economy recorded its strongest upswing in 24 months as demand continued to rebound from the Covid-19 pandemic, according to the IHS Markit UAE Purchasing Managers' Index report for July 2021.
  • Employment rose at the fastest rate since January 2019 while a sharp rise in new orders drove increasing pressure on business capacity and a marked expansion in output.
  • The total economic support packages and initiatives provided by the federal and local governments since the beginning of the pandemic to date is AED 395 billion.
  • Dubai announced additional stimulus for January – June 2021—an amount of AED 315 million. Other emirates employed similar measures to support trade and businesses and to provide advantages to sectors that suffered the most from the pandemic.

Vaccination and testing

  • The UAE has seen a significant decrease in Covid-19 infections of 62% in August 2021 compared to January 2021.
  • 90.17% of the population have received the first dose of the vaccine, while 78.98% have received both doses (as of 10th September 2021).
  • The UAE has administered over 18 million doses of the vaccine.
  • According to the Ministry of Health and Prevention (MoHAP), total doses administered now stand at 18.17 million.
  • The cost of Covid-19 PCR tests across the UAE has been reduced to AED 50. This will be the standard rate at all medical facilities in the country, according to the National Emergency Crisis and Disasters Management Authority (NCEMA). Results of these tests must be released within 24 hours.
  • Schools across the UAE have resumed post the summer break with new Covid-19 protocols.
    • According to the Ministry of Education (MoE), students aged 12 and above who are not vaccinated against Covid-19 will need to take a PCR test every week for in-person learning. 
    • However, the protocols could be changed by education regulators in each Emirate.

Tourism and entertainment

  • The Federal Authority For Identity and Citizenship (ICA) and the National Emergency Crisis and Disasters Management Authority (NCEMA) have jointly announced that, starting from 30th August, application for tourist visas will be open to people from all countries, provided that they are fully vaccinated with one of the WHO-approved Covid-19 vaccines.
    • This comes as part of the country's strategy to create a balance between public health and the activities of vital sectors, and in support of national efforts to achieve sustainable recovery and economic growth.
  • Effective from August 20, 2021, Abu Dhabi requires the green pass on the Alhosn app for all tourists and residents in Abu Dhabi to enter most public places
    • The Abu Dhabi Emergency, Crisis and Disasters Committee will allow entry to these public places only for those vaccinated individuals with a green status on the Alhosn app. 
    • Public places where entry will be restricted include shopping centres, restaurants, cafes, and all other retail outlets, The list also includes universities, institutes, public and private schools and children’s nurseries in the emirate.


Employment-related measures

(e.g. state compensation schemes, training)

  • The Ministry of Manpower announced implementation of a labor law in 2021. 
    • 32,000 jobs would be provided to job seekers, as per the implementation of the plan.
    • As of the first quarter of the year, 10,000 new jobs have been provided to Omanis, 20% of which have been coupled with training.
    • The Ministry has appealed to all workers in the private sector to adhere to health procedures and follow instructions issued by their employer to protect them and to prevent the spread of Covid-19.
  • The Supreme Committee has announced that the vaccination will be a condition to go to work in the public and private sectors starting on 1 September. 
    • The Supreme committee will organize the mechanism for the return of employees who were unable to obtain vaccinations before September
    • Government sectors and institutions will be at 100% attendance starting September.
    • Obtaining at least one dose of vaccine approved in the Sultanate will be mandatory for the renewal of the residency visa of expatriates.

Economic stimulus measures

(e.g. loans, moratorium on debt repayments)

  • Oman’s Medium-Term Fiscal Plan (2020-2024) aims to strengthen and support economic growth and offset the impact of Covid-19. A set of initiatives has been implemented, following an estimated total revenue at OMR 8.64 billion in 2021, according to the FY2021 budget.
    • Oman introduced 5% value added tax on 14 April 2021 as economic stimulus to support the country’s economic recovery. It is forecasting an estimated collection of OMR 300 million this year.
  • The Central Bank Oman announced a raft of policy measures and financial incentives designed to unlock an estimated OMR 8 billion (USD 20.78 billion) in additional liquidity for the benefit of businesses impacted by the economic downturn during the pandemic. 
    • The Central Bank of Oman issued government treasury bills worth OMR 216.4 million during the month of May 2021, to promote the local money market by creating a benchmark yield curve for short-term interest rates.
  • Total FDI in Oman stood at OMR 15.4 billion by the end of 2020, and is expected to grow as new regulations and rules on foreign investments have been released in 2020.

Measures to ease the lockdown


According to Oman’s Ministry of Health, schools, stadiums and exhibition halls will be used as vaccination centers, as Oman enters the next phase of immunization

The Supreme Committee took two more decisions to be enforced with effect from 1 September 2021:

  • To endorse the principle of vaccination as a condition for entry to government and private sector establishments (including commercial complexes, restaurants and other business outlets), as well as venues hosting cultural, sports and group activities. The heads of government units have a duty to take necessary action to implement public safety measures.
  • To make two-dose vaccination mandatory for people aged 18 years and above who wish to enter the Sultanate through all land, sea and air outlets, in addition to a PCR test before or upon arrival to the Sultanate. Those who got infected with the virus must undergo a seven day quarantine and redo the PCR test on the eighth.

Other measures

Entertainment and tourism

Oman has recently eased restrictions to limit the spread of the coronavirus.

  • Oman has decided to open land borders from 1 September 2021, including 18 countries that were in the “red-list”, without prior entry approval.
  • All travelers (with the exception of Omanis) entering the Sultanate must be fully vaccinated, and all travelers with pre-negative PCR tests (96 hours prior) are exempt from quarantining.

All public and private sector establishments will allow entry to vaccinated people from 1 September 2021.

  • All commercial activities such as shopping malls, hotels, shops and restaurants are allowed to fully resume activities.
  • Outdoor activities, domestic tourism and beaches are open for leisure.

Contact us





News Details | UAE Coronavirus (Covid-19) Updates (ncema.gov.ae)

Khaleej Times: Coronavirus news bulletin from UAE



Arabian Business





UAE Ministry of Finance



The National



Central Bank Oman




Oman Observer




U.S. Embassy Oman


Oman News


Tax Alert on import of goods between companies via e-commerce channels

Customs Alert - KPMG United Arab Emirates (home.kpmg)


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