UAE tax rule change 2023: All you need to know

Businesses will become subject to UAE tax from the beginning of their first financial year that starts on or after 1 June 2023.

Existing free zone entities will benefit from a zero percent corporate tax rate on qualifying income.

Corporate tax will not be applied to salaries or other personal income from employment, interest and other personal income earned from bank deposits or saving programmes and investment in real estate by individuals in personal capacity are also not subject to the new tax.

Here is a comprehensive guide to corporate tax in the UAE

• UAE announces new tax
• UAE tax: Finance experts explain new 9% corporate fee
• UAE tax pre-registration opens ahead of June 1 deadline
• UAE corporate tax 2023: All you need to know
• UAE corporate tax: Ministry of Finance explains timelines, fines
• Dubai announces corporate tax plan, awareness training
• UAE announces new tax rules
• UAE announces tax exemption rules
• UAE announces major new tax law implementation
• UAE announces major tax rule update for residents

UAE announces new tax

The new Federal Decree-Law was issued on taxation of corporations and businesses to begin in 2023

UAE has officially issued a federal decree-law on corporate tax at a 9 percent rate for taxable business profits exceeding AED375,000.

UPDATE: Learn more about self-assessment deadlines and when UAE corporate tax needs to be paid

Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses (the “Corporate Tax Law”). Businesses will become subject to UAE tax (“Corporate Tax”) from the beginning of their first financial year that starts on or after 1 June 2023.

The UAE tax will levy a standard rate of 9 percent for taxable profits exceeding AED375,000. Profits up to and including that threshold will be taxed at a zero percent rate to support small businesses and startups.

Existing free zone entities will benefit from a zero percent corporate tax rate on qualifying income.

UAE tax: Finance experts explain new 9% corporate fee

UAE companies face new corporate tax on profits in 2023

The UAE has officially issued a federal decree-law on taxing business profits.

The new law will start on June 1, 2023 and will see businesses levied with a corporate tax of 9% on profits above AED385,000.

To aid small businesses no tax will be payable on profits up to this amount, but legal experts in the UAE are advising businesses to prepare in advance of the deadline.

UAE tax law – legal view

“Now that the new corporate tax law has been issued, UAE businesses should start assessing how their businesses will be affected and start organising the necessary systems to ensure compliance with the new law,” says Adela Mues, Partner, Global Corporate Group, Reed Smith.

UAE tax pre-registration opens ahead of June 1 deadline

UAE will invite select companies to pre-register for corporate tax

The UAE’s Federal Tax Authority (FTA) has launched early registration for corporate tax through EmaraTax, the nation’s digital tax services platform.

The step comes in line with Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (the Corporate Tax Law), which stipulates that Taxable Persons will become subject to Corporate Tax from the beginning of their first financial year that starts on or after June 1, 2023.

The authority explained that early registration is open from January 2023 to May 2023 for certain categories of companies operating in the UAE.

UAE corporate tax 2023: All you need to know

Set to come into force this year, here is all you need to know about the corporate tax scheme

UAE officially issued a federal decree-law on corporate tax at a 9 percent rate for taxable business profits exceeding AED375,000. The new law was announced in December 2022 and is set to come into effect for financial years starting June 1, 2023.

Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses (the “Corporate Tax Law”). Businesses will become subject to UAE Corporate Tax (“Corporate Tax”) from the beginning of their first financial year that starts on or after 1 June 2023.

Corporate tax rates

• Zero percent on the portion of the Taxable Income below AED375,000.
• Nine percent on Taxable Income that exceeds AED375,000.

Corporate tax exemptions

• Government entities.
• Government controlled entities.
• Person engaged in an extractive business.
• Person engaged in a non-extractive natural resource business.
• Qualifying public benefit entity.
• Qualifying investment fund.
• Public pension or social security fund that is subject to regulatory oversight of the competent state authority.
• Private pension or social security fund that is subject to regulatory oversight of the competent state authority.
• A juridical person incorporated in the State that is wholly owned and controlled by
  an Exempt Person that conducts any of the following:
  • Undertakes part or whole of the activity of the Exempt Person.
  • Is engaged exclusively in holding assets or investing funds for the benefit of
  • the Exempt Person.
  • Only carries out activities that are ancillary to those carried out by the Exempt Person.
• Any other Person as may be determined in a decision issued by the Cabinet at the suggestion of the Minister.

UAE corporate tax: Ministry of Finance explains timelines, fines

The Ministry of Finance explained UAE corporate tax rules via a virtual session

The UAE Ministry of Finance held a virtual session, highlighting the features of the nation’s corporate tax regime.

This included explaining tax rates, the corporate tax administration for resident and non-resident persons in the UAE, unincorporated and incorporated partnership, and the treatment of family foundations and trusts, the authority said in a statement on Tuesday.

UAE corporate tax rules

The virtual session, which saw participation from over 800 business representatives, tax experts, and other professionals in the industry, also addressed persons exempt from the tax, the status of companies operating in free zones, and corporate tax administration, such as registration, financial statements, maintaining financial records, fines, transfer pricing, tax loss relief and others.

In addition, the Ministry of Finance spoke about UAE corporate tax timelines, which extend for over two years to allow preparation; general anti-abuse rules; support for small businesses.

The statement added that the authority also listed out the roles and responsibilities of the Ministry of Finance as well as the Federal Tax Authority (FTA) in implementing the new tax regime.

Dubai announces corporate tax plan, awareness training

The recently announced corporate tax will be implemented from June 2023 in the UAE

Dubai’s Department of Finance (DoF) has launched an integrated training programme – IMTITHAL – aiming to raise awareness of UAE corporate tax.

The recently announced UAE corporate tax will be implemented from June 2023 in the country.

The first of its kind in the country, the IMTITHAL programme is based on interactive participation and will feature many realistic examples related to the corporate environment in various economic sectors.

The training programme is organised and delivered in cooperation with the strategic partner, Dubai Chambers, and the knowledge partner, KPMG.

Abdulaziz Al Mulla, Executive Director and Head of tax affairs office at DoF, said the department wants to educate companies and businesses in Dubai about all elements of the new tax system, since the compliance requirements with this tax differs from those related to VAT.

“We expect important positive outputs from the programme that will contribute in complementing government and private sectors efforts to ensure effective tax compliance,” Al Mulla said.

UAE announces new tax rules

The AED3 million revenue threshold will apply to tax periods starting on or after June 1, 2023

The UAE Ministry of Finance has issued a new ministerial decision for businesses with revenues of AED3 million or less, wherein they can claim a “Small Business Relief.”

The authority stated that “taxable persons that are resident persons can claim Small Business Relief where their revenue in the relevant tax period and previous tax periods is below AED3 million for each tax period,” as per a Twitter post by UAEBARQ.

However, once the revenue threshold is exceeded, the Small Business Relief will no longer be available.

UAE announces tax exemption rules

The UAE Ministry of Finance has listed those who are exempt from registering for corporate tax

UAE Ministry of Finance has announced that certain persons are exempt from registering for UAE Corporate Tax.

The authority issued a Ministerial Decision No. 43 of 2023 on Exception from Tax Registration for the purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (the “Corporate Tax Law”), in accordance with Article 51 of the UAE Corporate Tax Law.

UAE corporate tax registration exemptions

Those exempt include government entities, government-controlled entities, extractive businesses, and non-extractive natural resource businesses that meet the necessary conditions under the Corporate Tax Law.

In addition, non-resident persons who only earn UAE-sourced income and do not have a Permanent Establishment in the country are exempt from registering for UAE Corporate Tax.

UAE announces major new tax law implementation

UAE Ministry of Finance says certain qualifying public benefit entities will be exempt from paying mandatory tax

The UAE has announced a new cabinet decision to implement a corporate tax law exempting qualifying public benefit entities from paying a mandatory corporate tax fee.

The Ministry of Finance unveiled a new decision by the UAE Cabinet new relating to Qualifying Public Benefit Entities.

It is designed to ensure that organisations operating for the wider public benefit don’t have to pay the tax.

UAE tax law update

Qualifying public benefit entities are established for the welfare of the public and society, focusing on activities which contribute to the fabric of the UAE.

Typically, this focus is  on public welfare, promoting philanthropy, community services or corporate and social responsibility.

This implementing decision is designed to reflect these entities’ important role in the UAE, which often includes organisations with a focus on,

• Religion
• Charitable
• Science
• Education
• Culture

UAE announces major tax rule update for residents

UAE Ministry of Finance issues cabinet decision on who needs to pay Corporate Tax in the country

The UAE has announced a new ministerial decision outlining rules on who should and should not pay UAE Corporate Tax in the country.

The new rules, announced on Wednesday, 17 May 2023 confirm that business owners in the UAE will only be liable to pay Corporate Tax if the turnover from the business activity is more than AED1m ($272,000) per year.

Furthermore, any individual’s income from real estate and personal investment will not be considered as taxable income.

UAE tax rules

The Ministry of Finance announced the issuance of UAE Cabinet Decision No. (49) of 2023 on the treatment of resident and non-resident individuals undertaking a business or business activity, for the UAE Corporate Tax Law purposes.

The decision aims to clarify the application of the Corporate Tax regime for individuals and ensure that only business or business-related activity income is taxed, while clarifying that personal income notably from employment, investments and real-estate (without licensing requirements) is not subject to UAE Corporate tax.

Individuals conducting business or business activities will be subject to UAE Corporate Tax and registration requirements only if their combined turnover exceeds AED1m in a calendar year.