UAE Corporate Tax- Effective for financial years starting on or after 1 June 2023.
UAE Corporate Tax : The Ministry of Finance to introduce federal corporate tax on business profits that will be effective for financial years starting on or after June 1, 2023.
- 9% headline corporate tax rate for taxable income exceeding AED 375,000.
- 0% Tax rate for taxable income up to AED 375,000 to support small businesses and startups.
Key features: UAE Corporate Tax
- Individuals will not be subject to corporate tax on income from employment, real estate, investment in shares or other personal income related to a UAE trade or businesses.
- No corporate tax will apply on foreign investors who dont carry on business in the UAE.
- Corporate tax will apply on the adjusted accounting net profit of the business.
- Free Zone business that meet all the necessary requirements, can continue to benefit from corporate tax incentives.
- The extraction of natural resources will remain subject to Emirates level corporate taxation.
- No withholding tax will apply on domestic and cross border payments.
- No corporate tax will apply on capital gains and dividends received by a UAE business from its qualifying shareholdings.
- No corporate tax will apply on qualifying intragroup transactions and restructurings.
- Foreign tax will be allowed to be credited against UAE corporate tax payable.
- Cementing the UAE’s position as a world leading hub for business and investment
- Meeting international standards for tax transparency and preventing harmful tax practices
- Accelerating the UAE’s development and transformation to achieve its strategic objectives
Corporate tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business. Corporate tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions