Today, Friday, the UAE issued a decree on corporate and business tax, provided that businesses in the country are subject to corporate tax from the first tax year commencing on or after the 1st June 2023.
According to the law, the “Corporate Tax” is set at 9% on the taxable income that exceeds AED375,000 and 0% on the part of the taxable income that does not exceed tale amount.
The Ministry of Finance confirmed that the Federal Corporate and Business Tax Law constitutes an important step in the framework of strengthening an integrated tax system that supports the UAE’s strategic objectives, enhances its global economic competitiveness and provides all national economy sufficient flexibility to address and support international financial systems within the framework of existing partnerships with the state.
The ministry indicated that corporate and commercial tax law in the country has been developed taking into account international best practices, to promote investment and ensure that the principles embodied in the law are widely understood.
The Ministry of Finance added that the setting of the 0% rate on the part of the taxable income that does not exceed 375,000 dirhams represents an appreciation of the vital role played by start-up and small businesses in the UAE economy and the basic tax rate of 9% ensures that the corporate tax system in the UAE is among the most Competitive systems in the world, which helps to strengthen the UAE’s position as a financial center and global business hub.
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