In this article, we will discuss about All You Need to Know About UAE Corporate Tax | All Questions Answered about Corporate Tax UAE. We will cover all the major questions related with UAE Corporate Tax.

What is UAE Corporate Tax?

UAE Corporate Tax is a form of direct tax that is levied on the net income of a person (corporations and other businesses, including individuals). UAE Corporate Tax is also known as “UAE Corporate Income Tax” or “Business Profits Tax in UAE”. UAE Corporate Tax is governed by the Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses (also known as the “Corporate Tax Law”). This law was issued by the United Arab Emirates (“UAE”) on 9th Dec 2022.

UAE Corporate Tax is intended to help the United Arab Emirates to achieve its strategic objectives as well as to accelerate its development and transformation. UAE Corporate Tax regime adheres to international standards.

Who is required to pay Corporate Tax in the UAE?

UAE Corporate Tax is required to be paid by any taxable person whose taxable profit (net) exceeds 375,000 AED during a tax period.

Corporate Tax Diploma UAE | Diploma in UAE Corporate Tax by World Peace Academy

What is the rate of UAE Corporate Tax?

The corporate tax rate in UAE is 0% and 9%. For the taxable income upto 375,000 AED the UAE Corporate Tax rate is 0% and in case of taxable income exceeding 375,000 AED the UAE Corporate Tax rate is 9%.

From which date UAE Corporate Tax is Applicable?

UAE Corporate Tax is applicable from Tax period starting on or after 1st June 2023. For example if the tax period of a particular business is starting from 1st June, then UAE Corporate Tax shall be applicable to such business from 1st June 2023. However, in case if the tax period is starting from 1st January, in such case UAE Corporate Tax shall be applicable on such business from 1st January 2024.

What type of incomes are outside the scope of UAE Corporate Tax?

Incomes that are outside the scope of UAE Corporate Tax are as follows:

  • any income from employment, investments in shares, real estate and other personal income unrelated to a trade or business in the UAE
  • Income of foreign investors who do not carry on business in UAE
  • Free zone businesses that comply with all regulatory requirements
  • Capital gains and dividends received by UAE businesses

Corporate Tax Diploma UAE | Diploma in UAE Corporate Tax by World Peace Academy

What are the Key Features of the UAE Corporate Tax Law?

  • UAE Corporate Tax is a Federal Tax and therefore it is applicable across all Emirates of UAE.
  • UAE Corporate Tax revenue collected shall be shared between the Federal and the Emirati Government.
  • UAE Corporate Tax will be applicable to all UAE businesses and commercial activities, with certain given exceptions as per UAE Corporate Tax Law.
  • The Federal Tax Authority will be responsible for the enforcement, collection as well as administration of UAE Corporate Tax.
  • The ‘Competent Authority’ for the purposes of bilateral/ multilateral agreements and the international exchange of information for tax purposes, will be the Ministry of Finance.

Hope, you liked our article on All You Need to Know About UAE Corporate Tax | All Questions Answered about Corporate Tax UAE.

Feel free to ask questions in the comments section. Our team of experts will respond to your questions.