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New UAE Corporate Tax

New UAE Corporate Tax

New UAE Corporate Tax

UAE is one of those countries in the world where businesses enjoyed tax-free zones, flexible business environments, No Taxation, flexible taxation and much more. It was one of the reasons which brought several people and multi-national brands to come and operate in the UAE. UAE Government introduced VAT on 1st Jan 2018 and now going to implement new UAE corporate tax from 1st June 2023. The businesses that were not paying the Income Tax before now will have to pay the new UAE Corporate Income Tax. The Ministry of Finance has announced that it will be applicable from 1st June 2023. UAE Income Tax program is fairly distributed where no one has an exemption, neither local nor expatriates. 

New UAE Corporate Tex

The new decision will allow the UAE government to reach Global Tax standards. It has already been implemented in a few gulf countries and now this is the right time to introduce, a new UAE Income Tax or Corporate Tax. The best thing is, that as of now, the news is telling that the rate of this corporate tax would be less in the world. So, the opportunity here is more than any country in the world and the tax rate is less than any country in the world. The new Tax system is not for creating an issue for the businesses. It is to serve the nations better than before, and serve the businesses better than before. UAE Income Tax program has been always very supportive for businesses and corporate entities. Following important points have been brought in knowledge:

  • Starting Date: 1st June 2023
  • Applicable to whom: All commercial businesses, all professional businesses, manufacturing businesses. Natural Resources businesses are kept excluded.
  • Every one holding the license would have to pay the new Corporate TAX.
  • Freelancers will not get the exemption. They will also have to pay the New Corporate Tax.
  • MOF also clears that the new tax system will also be applicable to Banks and their operations.
  • Relaxations granted to Free Zone companies will be kept same. However, few businesses can be affected with this new system who are operating in Main Land and Free Zone.
  • Rates are proposed as follows:

Taxable Income up to 375000 AED is Zero Percent. Taxable Income above 375000 AED is 9%. Check with the Officials regarding Multi-Nationals.

Exemptions:

  • Income earned from Natural Resources.
  • Capital Gains
  • Dividends
  • Foreign Business who is not having and business presence in UAE
  • Royalties

OTHERS:

  • UAE Txable Income, used to pay ForeiGN CIT, is allowed to be credited in UAE CIT. UAE has tax trearties with different countries this regard.
  • When there is a loss then compnaies can mention the losses.
  • Business in UAE, will be under Trasnfer Pricing rules.

Conclusion:

New Laws can be better understood through Tax experts and the Advocates e.g. Tax Lawyers and Tax Consultants. These Advocates probably Corporate Tax Lawyers will help to understand the new law and will also help the clients to finish up their Taxation needs. Such Law Firms are the Full-Service Law Firms like Ask The Law Al Shaiba Advocates and Legal Consultants, where Tax experts are also working. Better consult the best advocates and benefit from legal solutions and tax solutions. Therefore the proposed Law Firm above is the best in Dubai and UAE.

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