UAE Corporate Tax to come into effect this week: Here is what you need to know

UAE Corporate Tax to come into effect this week: Here is what you need to know

The federal tax on corporations and business profits will come into effect for financial years starting on or after June 1, 2023.

The UAE last year announced that it would levy a nine per cent corporate tax on companies with a profit of Dh375,000 and above, hence, requiring them to enrol for tax registration. The UAE’s corporate tax will be one of the lowest in the world.

Below is a complete detail that companies and individuals need to know about the tax. However, some laws will require further explanation and clarification, hence, companies and individuals need to consult experts on those topics.

What is corporate tax?

Sometimes referred to as corporate income tax or business profit tax, this is a direct tax levied on the net income of corporations and other businesses.

What is the corporate tax rate?

Tax will be levied at a headline rate of 9 per cent on taxable income exceeding Dh375,000.

Is the 9% corporate tax rate high?

No. It is one of the lowest rates in the world. Some countries have levied nearly 30 per cent corporate tax.

Why corporate tax is being levied?

The tax is being introduced to accelerate the country’s development and transformation. The certainty of a competitive corporate tax regime that