UAE to introduce new federal corporate tax on business profits from 2023

UAE to introduce new federal corporate tax on business profits from 2023

The UAE will introduce a federal corporate tax on business profits from the financial year starting on or after June 1, 2023, its Ministry of Finance has said. The corporate tax has been set at a standard statutory tax rate of 9 per cent. However, a zero per cent tax rate will be applicable on taxable profits up to Dhs375,000, in an attempt to support small businesses and startups. No corporate tax will apply on personal income from employment, real estate and other investments, or on any other income earned by individuals that does not arise from a business or other form of commercial activity licensed or permitted to be undertaken in the UAE, according to state-run news agency The 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. The new tax regime will also continue to honour the corporate tax incentives currently offered to free zone businesses that do not conduct