UAE corporate tax to bolster future economic sustainability: MoF

UAE corporate tax to bolster future economic sustainability: MoF

The UAE has initiated a transformative fiscal policy with the introduction of a federal corporate tax, aiming to cement its economic future’s resilience and prosperity. This strategic policy shift, outlined in Federal Decree-Law No. (47) of 2022, aligns with international tax standards and best practices, further solidifying the UAE's stature as a competitive global financial and business centre.
This new taxation framework, informed by extensive benchmarking and impact assessments, ensures public participation through a digital consultation phase. It spans the UAE’s free zones, which are integral to its diversified economic framework and international investment attractiveness. The tax policy is designed to amplify the UAE’s development as a global commerce and finance nexus by encouraging the free movement of capital and business expansion.
From June 2023, corporate tax stands levied at 0 percent for annual taxable incomes up to AED375,000 and 9 percent beyond that threshold. Free zone commercial transactions maintain the 0 percent rate, underscoring the UAE’s globally competitive tax environment. The OECD’s recognition of the UAE tax system within the top tier of 134 worldwide systems attests to its robustness and global alignment, particularly with the goals of the Base Erosion and Profit Shifting (BEPS) project.
The corporate tax’s vital role in