31/01/2022 by MNV Associates 0 Comments
UAE TO LAUNCH FIRST FEDERAL CORPORATE TAX
The United Arab Emirates will introduce a federal corporate tax on business profits starting from June 1, 2023 for the first time, the Finance Ministry announced on Monday, but kept a low base to maintain its attractiveness for businesses.
A ministry statement said the tax will be levied on all corporations and commercial activities in the country, except for the “extraction of natural resources” which will remain subject to taxation at the emirate level.
The move comes as the oil producer continues to diversify sources of revenue away from oil revenue.
In 2018, the UAE introduced value added tax on most goods and services at a standard rate of 5 percent.
The ministry said the new regime implies a standard statutory tax rate of 9 percent, as well as a 0 percent rate for taxable profits up to 375,000 dirhams ($102,107.50) in order to support small businesses and startups.
Businesses in the UAE, are exempted from paying taxes on capital gains and dividends received from shareholdings, it said.
The new program left intact the exemption for individuals from income tax, capital gains tax on real estate and other investments, and other earnings that do not come from a business.
The UAE corporate tax regime will continue to honor the corporate tax incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE, the ministry said.