Corporate Tax in UAE

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Corporate Tax in UAE
by Aswani

Corporate Tax in UAE

The UAE Ministry of Finance has recently announced the introduction of Corporate Tax, a direct tax imposed on the net income of corporations and businesses. Effective from June 1, 2023, this significant development marks a new era in the UAE’s tax landscape. At HLB Abu Dhabi, we understand the importance of staying updated with the latest regulations.

Effective Date

For fiscal years beginning on or after June 1, 2023, the UAE will start enforcing corporate tax. Businesses must ensure that they are ready for this transformation and that the new tax laws are followed.

UAE Corporate Tax Rates

The UAE’s corporate tax rates are set up to balance the demands of businesses with the needs of the nation’s economy. The following rates are in effect:

  • Small businesses and startups will benefit from zero rates applied to any annually taxable profits under AED 375,000.
  • 9% tax will be charged on taxable profits over AED 375,000 annually.
  • Multinational companies falling under the OECD Base Erosion and Profit-Sharing (BEPS) rules and meeting the criteria of Pillar 2 of the BEPS 2.0 framework, i.e., with combined worldwide revenues over AED 3.15 billion, will be eligible for a range of rates.

Corporate Tax’s Influence on UAE Businesses

The UAE’s tax system has undergone a substantial change with the implementation of the corporate tax. While this tax will have an impact on enterprises’ financial commitments, it also gives the UAE a chance to increase income and improve its position as a worldwide leader in trade and investment. To maintain compliance and maximize their tax planning strategies, firms must comprehend and adjust to the new tax structure.

HLB Abu Dhabi to Assist!

We at HLB Abu Dhabi are aware of the difficulties and complications that companies have while negotiating UAE corporate tax regulations. To help you understand and abide by the new Corporate Tax legislation in the UAE, contact our skilled tax specialists now. We provide specialised solutions that meet your unique company needs, ranging from tax planning and structuring to tax consultancy services. You can manage the shifting tax environment and maximise your tax strategy with the assistance of our knowledge and insights.