Corporate Tax represents a direct levy on the net income or profit of corporations and other business entities. The UAE Ministry of Finance introduced federal corporate tax legislation on 31 January 2022, which will take effect for financial years starting on or after 1 June 2023.
The corporate tax rate in the UAE is structured as follows:
For instance, if a company earns a taxable profit of AED 400,000 in a fiscal year, the corporate tax liability will be calculated as follows:
All businesses operating in the UAE, including those in free zones (with the exception of natural resource extraction activities), are subject to corporate tax. Personal income from employment, real estate, and other investments, as well as income not requiring a commercial license or permit, are exempt from corporate tax.
The evolving economic landscape, globalization, and regulatory changes necessitate organizations to adopt a proactive approach to tax compliance. Our Corporate Tax Compliance Team offers a range of services to ensure organizations meet their tax compliance requirements:
We offer a wide range of services that include general compliance, the introduction of the tax, finance, and accounting services, and global coordination and management of tax accounting projects.
Managing corporate tax matters amidst business growth and transformation can be intricate. Our Corporate Tax Advisory Team provides strategic guidance and practical solutions to navigate complex tax landscapes effectively:
We offer comprehensive corporate tax advisory and compliance services to support businesses in their tax management endeavors.
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Corporate Tax in the UAE will apply to all businesses and commercial activities, with the exception of natural resource extraction, which is subject to Emirate-level corporate taxation.
Yes, individuals conducting trade or business activities in the UAE on an ongoing or regular basis will be subject to UAE Corporate Tax. While salary or employment benefits are not taxed, income earned by individuals with a commercial license for business activities in the UAE is subject to Corporate Tax.
Individuals are not subject to UAE Corporate Tax on dividends, capital gains, or other income earned from owning shares or securities in a personal capacity. Therefore, gains on the transfer and periodic income from such securities are not taxable if the investment is made in a personal capacity.
Yes, businesses in free zones will be subject to UAE Corporate Tax, requiring compliance with all regulations. However, tax incentives currently offered to free zone businesses that comply with regulatory requirements and do not conduct business with mainland UAE are expected to continue under new regulations.
Detailed provisions regarding the taxability of free zone businesses are awaited, although it is indicated that tax incentives for compliant businesses are expected to continue.
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Phone: +971 58 659 8810
Email: info@numoouae.com
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