The Ministry of Finance department has declared that the UAE will introduce a federal corporate tax on business profits which will be effective for financial years beginning on or after June 1st, 2023. Businesses will become subject to UAE corporate tax from the beginning or start of their 1st financial year that starts on or after June 1st, 2023.
The UAE corporate tax regime has been designed to incorporate best practices globally and minimize the compliance burden on businesses.
Corporate tax are going to be payable on the profits of UAE businesses as reported in their financial statements prepared or ready in accordance with internationally acceptable accounting standards, with minimal exceptions and adjustments or changes.
Businesses And Commercial or Industrial Activities To Be Taxed
The corporate tax will apply to all or any businesses and commercial or industrial activities alike, expect for the extraction of natural resources which will remain or stay subject to Emirate level corporate taxation.
With a standard statutory tax rate of 9% and a 0% tax rate for taxable profits up to Dh375,000 to support small or tiny businesses and startups, the UAE corporate tax regime are going to be amongst the most competitive in the world.
One Corporate Tax Return Every Year
The UAE corporate tax regime will ensure the compliance burden is kept to a minimum for businesses that prepare and maintain adequate financial statements.
Businesses will solely need to file one corporate tax return every financial year and will not be needed to create advance tax payments or prepare provisional tax returns.