5 things to know about UAE corporate tax

5 things to know about UAE corporate tax

The Federal Decree Law on ‘Taxation of Corporations and Businesses’ has been released in the public domain on 09/12/2022. The introduction of corporate tax will be a paradigm shift for the UAE economy, UAE businesses as also for certain individuals.

The key features of the corporate tax law were already shared by the Ministry of Finance (MoF) in early 2022 e.g. the highlight tax rate will be 9 per cent to be calculated on the taxable profits, not the gross revenue, of a business. The tax will be imposed on a slab basis as the initial Dh375,000 of the yearly taxable profits will not be taxed.

The Federal Decree Law has provided clarity on many other aspects of the corporate tax and a certainty on its implementation. To firmly ascertain the tax implications, one has to momentarily wait for the release of related cabinets decision(s). The cabinet decision(s) will provide details and regulations.

Here are the top five important aspects of the corporate tax:

Often referred to as ‘Corporate Tax (CT)’, the expression is a misnomer for individuals.

Though CT will not apply to an individual’s salary and other employment income, individuals who are engaged in a business would be covered under CT.

‘Business’ has been