Corporate Tax in UAE
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Corporate Tax is a type of direct tax levied on the net income or profits of a company or other business. In other jurisdictions, corporate income tax is sometimes referred to as “corporate income tax” or “Business Profits Tax.”
Competitive Corporate Tax based on international best practices solidify the UAE’s position as a major global hub for business and investment, accelerating the development and transformation of the UAE to achieve its strategic goals.
The introduction of the Corporate Tax system reaffirms the UAE’s commitment to comply with international standards for tax transparency and prevent harmful tax practices.
Overview, Scope & Rates
When will the UAE CT regime become effective?
A business that has a financial year starting on 1 July 2023 and ending on 30 June 2024 will become subject to UAE CT from 1 July 2023 (which is the beginning of the first financial year that starts on or after 1 June 2023)
A business that has a (calendar year) financial year starting on 1 January 2023 and ending on 31 December 2023 will become subject to UAE CT from 1 January 2024 (which is the beginning of the first financial year that starts on or after 1 June 2023)
Who will be subject to UAE CT?
How do you determine whether an individual has a “business” that will be within the scope of UAE CT?
How do you determine the business profit / income that will be subject to UAE CT?
The accounting net profit of a business is the amount reported in the financial statements prepared in accordance with internationally acceptable accounting standards
What will the UAE CT rates be?
What is meant by “large” multinationals?
In the context of the global minimum effective tax rate as proposed under 'Pillar Two' of the OECD Base Erosion and Profit Shifting project,” large” refers to a multinational corporation that has consolidated global revenues in excess of EUR 750m (c. AED 3.15 bn)
Will the income earned by a freelance professional be subject to UAE CT?
If a business has earned taxable income of AED 400,000 in a given financial year, what will be the UAE CT amount payable?
The final amount of UAE CT payable will be reduced by any foreign taxes incurred on the relevant income (see below under ‘Tax Credits’ section)