Ministry of Finance confirms Applicable Taxable Income Threshold for Corporate Tax

Ministry of Finance confirms Applicable Taxable Income Threshold for Corporate Tax

ABU DHABI, 31st January, 2023 (WAM) -- The Ministry of Finance (MoF) has published the approved Cabinet Decision 116 of 2022 on the Applicable Taxable Income Threshold for Corporate Tax.

The Decision follows the issuance of Federal Decree Law on the Taxation of Corporations and Business (the “Corporate Tax Law”) in December 2022.

Businesses will become subject to UAE Corporate Tax from the beginning of their first financial year that starts on or after 1st June 2023.

The rate has been set at 9 percent and is applicable to taxable income above AED375,000, in alignment with what the Ministry announced earlier, ensuring that the UAE's Corporate Tax regime is amongst the most competitive in the world and strengthening the country's position as a global financial and business hub.

Based on the Decision, a zero percent rate will apply to taxable income that does not exceed AED375,000 during the same tax period regardless of the number of businesses or business activities the taxable person is engaged in during that period.

A 9 percent rate will apply to taxable income exceeding AED375,000 during the relevant tax period.

Younis Haji Al Khoori, Undersecretary of MoF, said, "The Cabinet Decision on Applicable Taxable Income Threshold for Corporate Tax confirms the