UAE corporate tax: MoF issues transitional rules for businesses; covers assets, liabilities

UAE corporate tax: MoF issues transitional rules for businesses; covers assets, liabilities

The UAE’s Ministry of Finance (MoF) has issued a decision detailing new guidelines for adjusting a taxable person’s opening balance sheet under the corporate tax law, which comes into effect on June 1. The aim of Ministerial Decision No 120 of 2023 is to ease the process of determining the opening balance sheet, ensuring a fair and transparent approach for assets and liabilities held prior to the implementation of the new corporate tax regime, said Younis Haji Al Khouri, Undersecretary of the . “Transitional rules for corporate tax provide important clarifications for businesses that need to transition smoothly from the pre-implementation period of the corporate tax law to the post-implementation period.” The decision applies to certain assets and liabilities, such as immovable property, intangible assets, financial assets, and financial liabilities, held by businesses before the corporate tax law comes into effect, stated a report published by state news agency . Businesses can adjust their tax treatment of such assets and liabilities based on specific rules and must decide how to do that when they submit their first tax return. Their choice would be permanent except in special circumstances. The decision looks at ownership history of assets and liabilities, including those