This is in line with the new Royalty Guidelines for the Local Telecommunication Sector issued by the Ministry of Finance for FY 2024. The difference this year is that the UAE corporate tax aspect is also taken into account.
“In accordance with the Corporate Tax Law, a tax rate of 9 percent will be applied to profits from January 1, 2024 to December 31, 2026,” the statement said. “We believe the new royalty structure is more simplified and avoids calculation complexity. Additionally, based on our initial assessment, the combined impact of royalties and corporate tax will be neutral to e&’s financials.”
For du, the total royalty and corporate tax payable will not be less than Dh1.8 billion per year. On what the new terms mean for the bottom line, Du said it “ensures clarity and simplicity, while promoting fairness by linking calculations solely to net profit.”
“Based on our initial assessment, the aggregate amount of corporate tax and royalties will not be higher than royalties under the old regime.”
As for e&, he said that the royalty payment formula for 2024 does not extend to what is generated by its international operations. Excluded items include: