The UAE Corporate Tax (CT) is set to be imposed with effect from June 01, 2023 throughout the Emirates, meaning that all businesses with a profit of AED 375,000 and above will be levied a 9 percent tax.
What is UAE Corporate Tax (CT)?
- The UAE Corporate Tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business.
- The CT is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions.
Corporate Tax Rate is?
- 0 percent for taxable income up to AED 375,000
- 9 percent for taxable income above AED 375,000
When the UAE Corporate Tax regime becomes effective?
- A business that has a Financial Year starting on July 01, 2023 and ending on June 30, 2024 will become subject to UAE CT from July 01, 2023 (which is the beginning of the 1st Financial Year that starts on June 01, 2023)
- A business that has a Financial Year starting on January 01, 2023 and ending on December 31, 2023 will become subject to UAE CT from January 01, 2024 (which is the beginning of the 1st Financial Year that starts on June 01, 2023)
Corporate Tax will apply to?
- All businesses & individuals conducting business activities under a Commercial Licence in the UAE
- Free Zone Businesses
- Foreign entities & individuals only if they conduct a trade or business in the UAE in an ongoing or regular manner
- Banking Operations
- Businesses engaged in real estate management, construction, development, agency & brokerage activities.
Corporate Tax will not apply to?
- An individual earnings salary & other employment income whether received from the public or the private sector
- Interest and other income earned by an individual from Bank Deposits or Saving Schemes
- A foreign investor’s income earned from Dividends, Capital Gains, Interest, Royalties & other Investment Returns
- Investment in real estate by individuals in their personal capacity
- Dividends, Capital Gains and other income earned by individuals from owning shares or other securities in their personal capacity.