A common view of the downtown space in Dubai, United Arab Emirates, December 08, 2021.
Satish Kumar | Reuters
DUBAI, United Arab Emirates — The United Arab Emirates will likely be introducing a federal corporate tax on enterprise income for the primary time, the Ministry of Finance introduced Monday.
The information represents a big shift for a rustic that is lengthy attracted companies from world wide thanks to its standing as a tax-free commerce hub. Businesses will likely be topic to the tax from June 1, 2023.
The nation’s statutory tax charge will likely be 9% for taxable revenue exceeding 375,000 United Arab Emirates dirhams ($102,000), and 0 for taxable revenue up to that quantity “to help small companies and startups,” the ministry mentioned, including that “the UAE corporate tax regime will likely be amongst essentially the most aggressive in the world.”
Individuals will nonetheless not be topic to tax on their incomes from employment, actual property, fairness investments or different private revenue unrelated to a UAE commerce or enterprise, the ministry mentioned. The tax additionally will not be utilized to overseas traders who do not conduct enterprise in the nation.
As for what constitutes revenue, corporate tax will apply on “the adjusted accounting internet revenue” of the enterprise.
Free zone enterprise, in the meantime — 1000’s of which exist in the nation — can “proceed to profit from corporate tax incentives” so long as they “meet all crucial necessities,” the ministry mentioned, with out elaborating. Companies throughout the UAE’s many free zones have lengthy loved zero taxes and full overseas possession, amongst different advantages.
“The UAE corporate tax regime has been designed to incorporate greatest practices globally and minimise the compliance burden on companies,” state information company WAM wrote.
“Corporate tax will likely be payable on the income of UAE companies as reported in their monetary statements ready in accordance with internationally acceptable accounting requirements, with minimal exceptions and changes. The corporate tax will apply to all companies and business actions alike, aside from the extraction of pure assets which is able to stay topic to Emirate stage corporate taxation.”