Federal Corporate Tax Is Coming To The UAE Next Year
The much anticipated corporate tax will be introduced in the UAE from 1st June 2023.
Whilst the majority of corporations doing business in the UAE have enjoyed a corporation tax-free existence, it has been well known that it was just a matter of time until such a tax would be introduced
UAE Corporate Tax Rate
Over recent years, the country has made significant reforms to it's commercial regulations to position it as an attractive and competitive place to do business to help attract foreign direct investment. Whilst, the introduction of a federal corporate tax might sound the opposite to this, the initial rate will be just 9%, meaning it will still be a competitive country to do business in with a low tax rate when compared to other developed countries.
The new corporate tax will apply to UAE mainland companies. Free zone companies operate within specialized economic zones rather than on the UAE mainland and will not therefore be subject to the new corporate tax.
Furthermore, there will be a zero tax rate for taxable profits up to AED375,000 and no double taxation for foreign companies.
Full legislation is yet to be finalized.
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Written by Jenny Hunt
Founder, Gateway Group, Abu Dhabi & Dubai, United Arab Emirates
FORBES' Top 100 Most Influential Women in the Middle East
