8.92 billion dirhams “Franchise” and “Corporate Tax” for “Du” and “End” in 2024

The financial statements of each of the company «Ed and the Emirates Integrated Communications Company“ du ”shows that the value of the“ concession right ”and“ corporate tax ”due to the two companies during the year 2024 exceeded 8.921 billion dirhams, at 6.958 billion dirhams“ concession right ”, and 1.963 billion dirhams dirhams“ corporate tax ”dues.

And the “concession right” is an annual fee paid by the state telecommunications company to the federal government represented by the Ministry of Finance in exchange for the use of federal facilities, in what must be paid “the franchise right” fees and corporate tax within five months from the date of the end of the fiscal year.

“Du” and “End”

In detail, according to the financial data of the communications company sent to the Dubai Financial Market and Abu Dhabi Securities Market, the financial dues on the company «End» reached about five billion and 282 million and 497 thousand dirhams “the right A thousand dirhams.

The financial dues on the company “D” amounted to one billion and 675 million and 882 thousand dirhams “the right to concession”, in addition to 246 million and 955 thousand dirhams “companies tax”, with a total of about one billion and 922 million and 837 thousand dirhams.

Draw the franchise right

In November 2023, the two companies announced that they received from the Ministry of Finance a list of guidelines related to the application of the Federal Franchise Right to the Communications Sector during the period from January 2024, until December 2026, where the Federal Franchant Rights fee is applied by 38% to the total annual and unorganized annual profits of the two companies, which were achieved in the UAE.

It is excluded from the calculation of the Federal Franchise Right: The profits resulting from the international operations under the control of the company, as well as the profits resulting from international operations that are not under the control of associate companies and the joint project.

It is also excluded, dividends of stock profits or other profits resulting from international investments that are already subject to the tax of local companies or a similar tax by 9% or more, as well as profit returned to minority rights owners in companies under the control of the two companies in the UAE.

According to the regulation, it is required that the total annual amount to draw the franchise and corporate tax for IDs should not be less than 5.7 billion dirhams annually, while the total amount of franchise fees and corporate tax owed should not be less than 1.8 billion dirhams annually.

Strong profits

It is noteworthy that the Emirates Integrated Communications Company (du) recorded a strong growth in revenue by 7.3% to 14.6 billion dirhams in 2024, while the profit margin was before deducting interest, taxes, depreciation and consumption 44.2%, and the level of profits increased before deducting interest, taxes, depreciation and consumption by 11.6% to 6.5 billion dirhams.

Du recorded a 49.1% jump in net profit to 2.5 billion dirhams, reflecting the company’s ability to enhance the growth of revenues and increase profit rates.

In turn, “End” announced its financial statements for the year 2024, which witnessed its registration in record financial performance; As the net profit reached 10.8 billion dirhams, a growth of 4.3% on an annual basis. The group recorded unified revenues of 59.2 billion dirhams.