Latest News

The UAE introduces its first-ever corporate taxes, set to start in 2023

0
A general view of the downtown area in Dubai, United Arab Emirates, December 08, 2021.
Satish Kumar | Reuters

DUBAI, United Arab Emirates — The United Arab Emirates will be introducing a federal corporate tax on business profits for the first time, the Ministry of Finance announced Monday.

The news represents a significant shift for a country that’s long attracted businesses from around the world thanks to its status as a tax-free commerce hub. Businesses will be subject to the tax from June 1, 2023.

The country’s statutory tax rate will be 9% for taxable income exceeding 375,000 United Arab Emirates dirhams ($102,000), and zero for taxable income up to that amount “to support small businesses and startups,” the ministry said, adding that “the UAE corporate tax regime will be amongst the most competitive in the world.”

Individuals will still not be subject to tax on their incomes from employment, real estate, equity investments or other personal income unrelated to a UAE trade or business, the ministry said. The tax also won’t be applied to foreign investors who don’t conduct business in the country.

As for what constitutes profit, corporate tax will apply on “the adjusted accounting net profit” of the business.

Free zone business, meanwhile — thousands of which exist in the country — can “continue to benefit from corporate tax incentives” as long as they “meet all necessary requirements,” the ministry said, without elaborating. Companies within the UAE’s many free zones have long enjoyed zero taxes and full foreign ownership, among other benefits.

“The UAE corporate tax regime has been designed to incorporate best practices globally and minimise the compliance burden on businesses,” state news agency WAM wrote.

“Corporate tax will be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with internationally acceptable accounting standards, with minimal exceptions and adjustments. The corporate tax will apply to all businesses and commercial activities alike, except for the extraction of natural resources which will remain subject to Emirate level corporate taxation.”

China names blockchain trial zones after its crackdown on cryptocurrencies

Previous article

Stocks making the biggest moves in the premarket: Citrix Systems, BlackBerry, Spotify and more

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News