UAE Corporate Tax
9% federal corporate tax will be applicable on business profits with a threshold of AED 375,000
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UAE introduces Corporate Tax
The UAE’s Ministry of Finance made a groundbreaking announcement of implementing Corporate Tax in the region, effective financial years from or after 1 June 2023. The UAE has undertaken this action in its attempts to adhere to global standards and to align with OECD’s Global Minimum Tax Proposal under Pillar 2.
On 9 December 2022, the UAE Federal Tax Authority (FTA) released the final version of the UAE Corporate Tax (CT) law (hereinafter referred to as the law) through Federal Decree Law No. 47 of 2022. The law is largely based on the public consultation document issued earlier during the year 2022. However, it also contains certain new provisions which inter-alia include General Anti Abuse Rules, Small Business Relief, detailed definition of UAE sourced income, etc.
Businesses based in UAE would need to be geared up to adapt to these new changes. The companies need to evaluate the applicability of the provisions, align structure to make it tax efficient in UAE, and align policies for related party transactions.
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