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e& and du paid $963.78 million in federal royalty to UAE government in H1 2024

The aggregate amount of royalty payable by the e& group in the first half of 2024 reached $748.43 million
e& and du paid $963.78 million in federal royalty to UAE government in H1 2024
From 2012 to 2023, the two telecom operators' royalty payments totaled $24.58 billion. (Photo Credit: WAM)

The UAE telecom operators e& and Emirates Integrated Telecommunications Company P.J.S.C. (du) have paid a federal royalty of AED3.54 billion ($963.78 million) to the UAE government during the first half of the current year, compared to AED3.73 billion ($1.01 billion) in the same period of 2023, as per the Ministry of Finance’s Royalty Guidelines.

H1 2024 royalty payments

Based on the financial results announced by the two companies on the financial market websites, the aggregate amount of royalty payable by the e& group in the first half of 2024 reached AED2.749 billion ($748.43 million), compared to AED2.75 billion in the first half of 2023. Meanwhile, du paid AED797.6 million ($217.15 million) in the first half of 2024, compared to AED978.9 million for the same period last year.

Cumulative royalty payments

From 2012 to 2023, the two telecom operators’ royalty payments totaled AED90.3 billion or $24.58 billion (AED70.6 billion by e& and AED19.7 billion by du).

New Royalty Guidelines

In November 2023, e& and du announced they had received the Royalty Guidelines for the local telecom sector, issued by the Ministry of Finance, for the period from January 2024 through December 2026.

Read more: UAE’s e& records consolidated revenues of $3.5 billion in Q1 2023

Exclusions from royalty calculations

The 2024 royalty payment formula excludes certain items from the calculation, such as profits generated from international controlled entities, profits of international non-controlled entities (associates and joint ventures), dividends or other profit distributions received from international investments already subject to local corporate or similar tax of 9 percent or above, and profit attributable to non-controlling interest holders of the UAE controlled entities.

Royalty and corporate tax rates

The federal royalty rate of 38 percent will be applied to the sum of regulated and non-regulated UAE net profit for both e& and du, as well as the royalty and corporate tax rate of 9 percent on profit. For e&, the aggregate annual amount of royalty and corporate tax shall not be lower than AED5.7 billion. For du, the aggregate amount of royalty and corporate tax payable shall not be lower than AED1.8 billion per year.

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