Dubai, NFAPost: The UAE authorities have announced the introduction of corporate tax from 1st June, 2023. The law mandates that a taxable person or business will be subjected to a 9% corporate tax from the start of their first financial year commencing on or after June 1, 2023.
The announcement has created a buzz among businesses and tax professionals. With this announcement, UAE is all set to become 4th among the GCC countries to introduce a federal corporate tax.
The introduction of federal corporate tax in UAE aims to further strengthen the country’s position as a world-leading hub for businesses and investment and accelerate the strategic objective towards development and transformation. Also, the corporate tax concept helps meet international standards for tax transparency while also avoiding harmful tax practices.
Every business whose taxable profit (net) is more than 375,000 AED fall under the purview of corporate tax in the UAE and are required to pay a certain percentage of net profit as corporate tax. The corporate tax rate is at 9% of the net profit made by the businesses. In order to extend support to small businesses and start-ups, the corporate tax rate will be ‘0’ % if the net profit is up to 3,75,000 AED.
The authorities already released the corporate tax law on 9th December 2020.
