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The corporate income tax on business profits will be effective for financial years starting on or after 1st June 2023. Registration is now open!
What is corporate tax?
UAE’s Corporate Income Tax or Business Profits Tax is a federal direct tax levied on profits of corporations, it will be chargeable on taxable income, which is the profit reported in businesses financial statements after some exceptions and adjustments.
Corporate Tax Law Published
The UAE Ministry of Finance (MoF) recently published the Corporate Income Tax Law has been published on December 9th, 2022, providing essential rules to help businesses get ready before the implementation in June 2023. However, some important details will further be clarified via issuance of Cabinet and Federal Tax Authority Decisions and guidances.
UAE corporate tax roadmap
How can we help?
As your corporate tax consultant we will help you assess your tax position and provide guidance and recommend the necessary actions that will help you comply with high efficiency.
We've gathered some answers
Corporate Income Tax or Business Profits Tax is a direct tax levied on profits of a company.
Corporate tax will be chargeable on taxable income, which is the profit reported in businesses financial statements after few exceptions and adjustments.
0% on taxable profits up to AED 375,000
9% on taxable profits greater than AED 375,000
Corporate tax is effective for financial years starting on or after 1/6/2023. if your financial year is a calendar year, the effective date is 1/1/2024.
- Dividends and capital gains earned by a UAE business from its qualifying shareholdings will be exempt from UAE CT
- Qualifying intra-group transactions and reorganizations will not be subject to UAE CT provided the necessary conditions are me
The following personal incomes are not subject to corporate tax:
- Individual’s salary and other employment income
- The investment in real estate by individuals in their personal capacity
- Dividends, capital gains and other income earned by an individual from owning shares or other securities in their personal capacity.
- Interest on bank deposits and saving accounts
Income earned from activities carried out under a freelance license or permit is subject to corporate tax (on net taxable profit grater that 375k)
UAE corporate tax will not be applicable on foreign investor’s income from dividends, capital gains, interest, royalties and other investment returns.
Foreign entities and individuals will be subject to UAE Corporate tax only if they conduct a regular, ongoing, trade or business in the UAE.
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