UAE Telecom Companies e& and du Pay AED 3.54 Billion in Federal Royalty
In the first half of the current year, UAE telecom operators e& and Emirates Integrated Telecommunications Company P.J.S.C. (du) have paid AED 3.54 billion in federal royalty to the UAE government. This is slightly less than the AED 3.73 billion paid in the same period of 2023.
According to financial results, e& paid AED 2.749 billion, while du paid AED 797.6 million in the first half of 2024. In comparison, e& paid AED 2.75 billion and du paid AED 978.9 million in the first half of 2023.
From 2012 to 2023, the total royalty payments by these two telecom operators amounted to AED 90.3 billion, with e& contributing AED 70.6 billion and du contributing AED 19.7 billion.
In November 2023, e& and du received the Royalty Guidelines for the local telecom sector issued by the Ministry of Finance for January 2024 through December 2026. The 2024 royalty payment formula excludes profits from international operations, including:
- Profits from international controlled entities
- Profits from international non-controlled entities (associates and joint ventures)
- Dividends or other profit distributions from international investments already subject to local corporate or similar tax at 9% or above
- Profit attributable to non-controlling interest holders of UAE-controlled entities
The federal royalty rate of 38% will be applied to the sum of regulated and non-regulated UAE net profit for both e& and du, along with a 9% corporate tax rate on profit. For e&, the aggregate annual amount of royalty and corporate tax shall not be lower than AED 5.7 billion. For du, it shall not be lower than AED 1.8 billion per year.
Doubts Revealed
UAE -: UAE stands for the United Arab Emirates, a country in the Middle East made up of seven smaller regions called emirates.
Telecom Companies -: Telecom companies are businesses that provide communication services like phone and internet. In this case, e& and du are the telecom companies in the UAE.
e& -: e& is a telecom company in the UAE. It used to be called Etisalat.
du -: du is another telecom company in the UAE, similar to e&.
AED -: AED stands for Arab Emirates Dirham, which is the currency used in the UAE.
Federal Royalty -: Federal royalty is a payment that companies make to the government for the right to operate in the country.
Corporate Tax -: Corporate tax is a tax that companies have to pay on their profits.
