UAE to strengthen ties with global financial institutions

As part of its efforts to strengthen the UAE’s strategic relations with regional and international financial institutions, the Ministry of Finance (MoF) hosted a high-level delegation from the Eurasian Development Bank (EDB) in Abu Dhabi to discuss ways to enhance financial cooperation and explore new opportunities for joint projects and investments that benefit both sides.

The meeting was attended by Younis Haji AlKhoori, Undersecretary of the MoF, and Ali Abdullah Sharafi, Acting Assistant Undersecretary for International Financial Relations at the MoF.

From the Eurasian Development Bank, the delegation included Nikolay Podguzov, Chairman of the EDB; Evgeny Vinokurov, Deputy Chairman and Chief Economist; Daniyar Imangaliev, Deputy Chairman; and Anna-Mariya Chkoniya, Managing Director and Head of the International Cooperation Department.

The discussions focused on areas of collaboration in infrastructure, alternative energy, and food and water security, aligning with the Bank’s development objectives. Both sides also explored opportunities for joint financing of development projects and examined strategies for regional integration.

The meeting highlighted the important role of the Eurasian Development Bank in advancing economic development among member states and other partners. Strengthening International Partnerships Younis Haji AlKhoori said: “This meeting reaffirms the UAE’s commitment to fostering international partnerships aimed at achieving sustainable development on a global scale. With its leadership in infrastructure, clean energy, and food and water security, the UAE is dedicated to building effective bridges of cooperation with the Eurasian Development Bank to create opportunities that enhance strategic partnerships and contribute to positive economic and social impact aligned with global development ambitions.”

He added: “We are keen to explore additional opportunities for collaboration with the Eurasian Development Bank, especially as it leads major investment projects and initiatives that promote regional integration. By leveraging our advanced economic development experience, we aim to support the aspirations of member countries and strengthen channels of partnership for mutual benefit.”

The Eurasian Development Bank consists of six member states: Armenia, Kazakhstan, Russia, Kyrgyzstan, Belarus, and Tajikistan, with an investment portfolio worth $15.3 billion.

The Bank prioritises sustainable development projects, particularly in infrastructure and clean energy, and maintains strong global credit ratings, reflecting its pivotal role in fostering regional integration and sustainable economic growth.

Meanwhile the UAE Ministry of Finance (MoF) has announced updates in relation to certain provisions of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. These amendments include the following: Following the issuance of Federal Decree Law No. 60 of 2023, a Domestic Minimum Top-up Tax (DMTT) will be effective in the UAE for financial years starting on or after 1 January 2025. This strategic step reflects the UAE’s commitment to implementing the Organisation for Economic Co-operation and Development’s (OECD) Two-Pillar Solution, aimed at establishing a fair and transparent tax system aligned with global standards.

The Pillar Two rules require large multinational enterprises (MNEs) to pay a minimum effective tax rate of 15 per cent on profits in every country where they operate.

The DMTT will apply to multinational enterprises operating in the UAE with consolidated global revenues of €750 million or more in at least two out of the four financial years immediately preceding the financial year in which the DMTT applies. The UAE’s implementation of the DMTT will closely align with the OECD’s GloBE Model Rules.

Further details on this legislation will be issued by the Ministry of Finance in due course.

The UAE continues to enhance its business-friendly environment, reflecting its commitment to national strategic objectives such as strengthening economic competitiveness and improving ease of doing business.

To promote sustainable growth, innovation, and investment, the Ministry of Finance is currently considering the introduction of the following Corporate Tax Incentives under Federal Decree-Law No. 47 of 2022.

To encourage R&D activities, foster innovation and economic growth within the UAE, a Research and Development (R&D) Tax Incentive is being considered. Based on feedback received during public consultations conducted in April 2024, the proposed incentive is expected to take effect for tax periods starting on or after January 1, 2026.

The R&D tax incentive will be expenditure-based, offering a potential 30-50 per cent tax credit and will be refundable depending on the revenue and number of employees of the business in the UAE.

WAM