UAE Enforces Corporate Taxes in June 2023
We all knew this day would come, and it is almost here. The UAE Ministry of Finance has announced it will introduce a corporate tax on business profits on financial years starting on or after June 1, 2023. To lesson the impact on small businesses, there will be no tax on profits of up to Dh375,000.
No corporate tax will apply on the following:
- Personal income from employment;
- Real estate and other investments;
- Other income earned by individuals that do not arise from business or other forms of commercial
Corporate Tax Return will be filed annually
Impact on an International Headquarter Location:
Exempt from paying tax on capital gains and dividends received from its qualifying shareholdings and foreign taxes will be allowed to be credited against UAE corporate tax payable.
Despite this new development, United Arab Emirates is still an attractive place for investment and has a more favorable tax regime than many Western countries. For example, free zones who are not conducting business in onshore UAE will be exempt from corporate tax.