Corporate tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business.
-- Corporate tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions
UAE Corporate Tax will apply to all UAE businesses, except for the extraction of natural resources, which will remain subject to Emirate level corporate taxation. Foreign entities and individuals will be subject to Corporate Tax only if they conduct a trade or business in the UAE in an ongoing or regular manner.
What are the objectives in implementing the Corporate Tax?
Cementing UAE's position as a world leading hub of business & investments
Meeting International Standards for tax transparency & preventing harmful tax practices
Accelerating UAE's development & transformation to achieve its strategic objectives
What will be the Tax Rates applicable to your business?
0% Tax Rate applicable to your income up to AED 375,000 , this is beneficial for the start-up business and small business owners.
9% headline Corporate Tax rate for taxable income exceeding AED 375,000, this will be applicable for businesses that are growing and carrying out business in UAE.
KEY IMPORTANT FEAUTURES
Individuals will not be subject to Income Tax on income from employment, real estate, investment on shares & other personal income not related to UAE Trade license.
No corporate tax will apply to foreign investors who do not carry on business in UAE.
Corporate tax will apply on the adjusted accounting net profit of the business.
Freezone businesses that meet all necessary requirements can continue to benefit from corporate tax incentives
No withholding tax will apply on domestic & cross border payments.
The extraction of natural resource will remain subject to Emirate level of corporate taxation.
No corporate tax will apply on qualifying intragroup transactions and restructurings.
Foreign tax will be allowed to be credited against UAE corporate tax payable.
Generous loss transfer and utilisation rules will be available to business.
We are waiting for the final decree for Corporate Tax. As long as you are keeping a proper accounting processes and bookkeeping procedures you don't have to worry.
Preparation for this upcoming Corporate Tax implementation is crucial for businesses to avoid fines and penalties.
If you have any questions, you can send us thru email freelancefinancecontroller@gmail.com or whatsapp us: 050 376 0436
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