Corporate Tax Assistance
Corporate Tax Assistance in Dubai
The Ministry of Finance in UAE recently introduced Corporate Tax in January 2022. The new tax will come into effect from 1st June 2023 all over the country for all businesses except the exempted category.
Corporate tax is a direct tax imposed on the net profit of businesses. UAE has chosen the lowest tax rate of 9% compared to other GCC countries to reduce its direct impact on business owners. Introducing corporate tax is a way to present the UAE as a global business hub and to meet international standards of transparency in taxes.
Corporate Tax Rates in UAE
According to the Ministry of Finance, the following rates of Corporate tax will be applicable.
- 0% rate for taxable income upto AED 375,000
- 9% rate for taxable income more than AED 375,000
- Different tax slabs for multinational corporations as per Pillar Two of the OECD Base Erosion and Profit-sharing (having revenue of more than AED 315 billion)
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Importance of Corporate Tax in UAE
The main purpose of implementing corporate tax is to improve corporate governance and strengthen the nation’s economy. The government aims to develop UAE as a global hub for investments and businesses. The corporate tax will help in preventing tax malpractices and accelerate transformation. UAE has the lowest tax rates making it favourable for foreign investments. So what are the businesses that will come under Corporate Tax law?
Businesses where Corporate Tax is Applicable
The corporate tax applies to the following businesses
- Business or individuals holding a commercial license and conducting business activities in UAE.
- Free Zone Businesses that follow legal requirements and do not have any office in the country’s mainland.
- Foreign businesses or individuals who are doing regular ongoing business in UAE
- Banking operations
- Businesses related to real estate, construction, development agency and brokerage.
Businesses Exempted from Corporate Tax
The following businesses are exempted from corporate tax
- Businesses related to mining, or extraction of natural resources
- Dividends and capital gains earned from qualifying shareholdings
- Qualifying Intra-group transactions and reorganizations
- Salary or income of an individual earned from the public, private sector, and bank deposits
- Foreign investor’s income earned from investment returns
- Investments in real estate