UAE to levy 9% Corporate Tax on business profits from 1 June 2023

UAE to levy 9% Corporate Tax on business profits from 1 June 2023

UAE has issued a Federal Decree-Law on Taxation of Corporations and Businesses, under which they will become subject to UAE Corporate Tax from the beginning of their first financial year that starts on or after 1 June 2023.

The UAE’s Corporate Tax regime will levy a standard rate of 9 percent for taxable profits exceeding $1,02,094. Profits upto and including that threshold will be taxed at a 0 percent rate to support small businesses and startups.

The Ministry of Finance (MoF) confirmed the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses is an important milestone in building an integrated tax regime that supports the strategic objectives of the UAE and enhances its global economic competitiveness, as well as provides the national economy with sufficient flexibility to deal with and support international financial systems within the framework of the UAE’s established partnerships.

The Corporate Tax regime has been designed in line with global best practices to both promote investment and ensure the principles included in the law are widely accepted and understood. To this end, the Ministry involved relevant stakeholders through public consultation and took into account feedback and views in the final design of the Corporate Tax regime.

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