“The draft of the corporate tax law and the value-added tax law has been discussed with the local and federal governments,” said Younis Haji Al Khouri, under-secretary at the Ministry of Finance, according to Gulf News.
The ministry is still considering the impact of the laws, but Al Khouri said that the draft will be finished "very soon, within the third quarter of this year," Gulf News reported.
Al Khouri did not say what the proposed tax rates were likely to be, nor when they would be introduced.
The UAE currently has no VAT and levies no corporate tax, except for a few exceptions: branches of foreign banks; hotels; courier companies; and oil, gas and petrochemical producers.
Doha-based Ian Anderson of Pinsent Masons, the law firm behind Out-Law.com said: "Member countries of the GCC have been working towards the introduction of a common VAT system, although the project received added impetus recently with the adoption of a draft VAT framework agreement which established the principles each country will follow. Introduction could be as early as 2016."
"The work in the UAE on a draft corporate tax law is interesting as it is the only Gulf State apart from Bahrain that does not have some form of general tax on companies," Anderson said. "The plan to impose it on local companies as well as international companies is another indication of the region moving from being a tax free zone, which in my view is a positive step."
Last week the UAE and US signed an agreement to share information on any UAE-based finances of US citizens, under the US's Foreign Account Tax Compliance Act (FATCA).