UAE and OFID discuss enhancing working relations, joint cooperation

Younis Haji Al Khoori, Undersecretary of Ministry of Finance (MoF) on Tuesday met with Dr Abdulhamid Alkhalifa, Director-General of the Opec Fund for International Development (OFID) at MoF’s headquarters in Abu Dhabi.

The meeting sought to discuss bolstering working relations and joint cooperation between the UAE and OFID.

The meeting was attended by Majid Ali Omran, a Consultant at MoF, and Tarek Sherlala, Opec Fund Assistant Director-General of the Financial Operations Department.

Younis Haji Al Khoori reiterated the importance of the bilateral relationship between the UAE and OFID. He noted that the UAE contributes to supporting the fund’s plans and directions by providing assistance and devising development and technical programmes and economic projects to support sustainable economic development in poor and developing countries.

Younis Haji Al Khoori said: “The UAE is committed to continuing cooperation and coordination with all regional and international bodies, institutions and organisations to support and develop strategic plans aimed at combating poverty and unemployment. This is to achieve comprehensive and sustainable economic and social development in various countries across the world.”

During the meeting, the Director General of OFID presented an overview of the fund’s latest plans, projects, and the 2021-2023 work plan. Both parties discussed bonds issuance and investments, as well as OFID’s efforts in responding to the COVID-19 pandemic.

OFID is an international development finance institution established by the member states of OPEC in 1976 as an international bank account. In 1980, Member States decided to turn the temporary fund into a permanent legal entity. The UAE became a member of the fund by virtue of Federal Decree No. 56 of 1976.

Meanwhile earlier the Ministry of Finance (MoF) has announced that the UAE will introduce a federal corporate tax on business profits that will be effective for financial years starting on or after June 1, 2023.

Businesses will become subject to UAE corporate tax from the beginning of their first financial year that starts on or after June 1, 2023.

The UAE corporate tax regime has been designed to incorporate best practices globally and minimise the compliance burden on businesses. Corporate tax will be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with internationally acceptable accounting standards, with minimal exceptions and adjustments.

The corporate tax will apply to all businesses and commercial activities alike, except for the extraction of natural resources which will remain subject to Emirate level corporate taxation.

With a standard statutory tax rate of 9 per cent and a 0 per cent tax rate for taxable profits up to Dhs375,000 to support small businesses and startups, the UAE corporate tax regime will be amongst the most competitive in the world.

No corporate tax will apply on personal income from employment, real estate and other investments, or on any other income earned by individuals that does not arise from a business or other form of commercial activity licensed or otherwise permitted to be undertaken in the UAE.