The UAE government and the Ministry of Finance launched a new corporate tax update. The new updates come as a review by the Federal Tax Authority on businesses' net profit.
The UAE government seeks to achieve strategic economic goals by creating a fast-paced transformation in the legislative regulations.
The corporate tax update was effective in June 2023 to regulate the economic environment in the UAE.
Read in-depth to explore the UAE corporate tax update (CT) if you run a profitable business in Dubai.
Let’s first define the tax types you may come across when working in the United Arab Emirates.
By definition, the corporate tax (CT) is a direct taxation on the corporates’ net profit from the business.
According to the United Arab Emirates Portal, the corporate tax is “governed by Federal Decree-Law No.60 of 2023 and Amending Certain Provisions of the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.”
Thus, UAE corporate tax law has been applied to businesses since June 2023.
If you wonder what is net Investment Income Tax, it is simply a required tax on the net income of a corporation or entity according to their business activities.
Similarly, the net investment income tax is effective in June 2023.
By defining the main tax types, it's time to answer some of the essential questions about the UAE corporate tax.
Some businesses shall pay corporate tax based on their domains and licenses.
Entities with the following criteria will be subjected to the CT:
There is a specific UAE corporate tax rate specified by the Ministry of Finance.
The following CT rates are the applied percentages on businesses' incomes:
If you have more questions regarding corporate tax, you can check the FAQs on the Ministry of Finance or simply contact our Freezoner team to get a compelling consultation.
The Corporate Tax update comes with additional conditions in specific domains to achieve strategic goals in the UAE.
According to the Federal Tax Authority and the UAE government, the Cabinet Decision released additional conditions related to the exempted businesses including:
Some entities and individuals are exempted from the UAE corporate tax (CT).
Hence, the UAE Federal Tax Authority will instantly exempt the following entities/individuals as per the corporate tax update:
The bottom line, we highlighted the taxation rate of the corporate tax and elaborated on the corporate tax update.
Yet, you can get back to our Freezoner team to explain more about how to pay the corporate tax.
On a side note, if you still wondering how to start a business in Dubai, you can contact us via email ([email protected]), and we will simplify the whole journey from A to Z.
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