UAE issues corporate tax law

UAE issues corporate tax law

The UAE has issued a federal corporate tax law on Friday, that will impose a standard rate of 9 per cent on taxable profits exceeding Dhs375,000. Profits up to and including the aforementioned threshold will be taxed at a zero percent rate to support small businesses and startups. The Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses, will see businesses become subject to corporate tax from the beginning of their first financial year that starts on or after June 1, 2023. “The introduction of corporate tax is intended to help the UAE achieve its strategic objectives and accelerate its development and transformation,” the UAE’s finance ministry said. “The certainty of a competitive corporate tax regime that adheres to international standards, together with the UAE’s extensive network of double tax treaties, will cement the UAE’s position as a leading jurisdiction for business and investment,” it added. The corporate tax law reflects the UAE’s support for the OECD Inclusive Framework on Base Erosion and Profit Shifting in its commitments to introducing a global minimum tax for multinationals, enhancing tax transparency and preventing harmful tax practices, official news agency reported. Natural resource extraction activities in the country are exempt