The United Arab Emirates is still studying a proposal to impose a value-added tax but introduction has been delayed by a lack of agreement among neighbouring states on rates and exemptions, the Ministry of Finance said on Tuesday.

"If the GCC countries reach a final agreement on issues related to the application of VAT, it will be announced directly," the ministry said in a statement carried by UAE state news agency WAM.

The six oil exporting states of the Gulf Cooperation Council have been studying whether to impose VAT for years. Analysts believe that to limit smuggling and damage to the competitiveness of economies, the tax would probably have to be introduced regionally rather than by individual countries at different times.

Once a decision to impose VAT is made, the public will be given "a time horizon of no less than 18 months to prepare for the implementation and discharge the obligations towards the tax requirements", the ministry said.

Separately, the ministry said it was still studying reforms to the UAE corporate tax regime and that the tax rate was under study. Businesses will be given at least one year to prepare for any changes, it added.

At present there is little corporate taxation outside the oil sector, apart from a 20 percent levy on foreign banks in Dubai. The government has been considering whether to impose a broad corporate tax across the economy. – Reuters