Several businesses in the UAE, excluding small firms, are expected to pay a corporate tax of 9% starting next year.
The government has just issued Federal Decree Law No. 47 of 2022 on Taxation of Corporations and Businesses, otherwise called the Corporate Tax Law, state news agency WAM reported on Friday.
Under the decree, the government will levy a standard rate of 9% of companies’ taxable profits exceeding AED375,000 ($102,000). Companies will be subject to the new tax from the beginning of their first financial year that starts on or after June 1, 2023.
The corporate tax will not be levied on salaries or personal income from employment, as well as earnings made from bank deposits, savings schemes and real estate investments made by individuals.
No tax will be collected from businesses that don’t meet the income threshold of AED375,000, to support small businesses and start-ups.
Competitive tax rate, more exemptions
The new tax is said to be in line with global best practice and is one of the most competitive in the world. It is expected to boost the UAE’s position as a global business and financial hub.
According to the Ministry of Finance, the corporate tax law is an important milestone “in building an integrated tax regime that supports the strategic objectives of the UAE and enhances its global competitiveness.”
This report’s information was first seen on ZAWYA; to read more, click this link.
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