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Corporate Income Tax in UAE

  1. What is Corporate Tax?

Corporate Tax is a form of direct tax levied on the net income or profit of corporations and other businesses.

Corporate Tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions.

  1. Why is the UAE introducing CT?

A competitive CT regime based on international best practices will cement the UAE’s position as a leading global hub for business and investment, and accelerate the UAE’s development and transformation to achieve its strategic objectives

Introducing a CT regime reaffirms the UAE’s commitment to meeting international standards for tax transparency and preventing harmful tax practices

  1. Is the UAE the first country to introduce CT?

Most countries in the world have a comprehensive CT regime, including most of the GCC Member States

  1. When will the UAE CT regime become effective?

The UAE CT regime will become effective for financial years starting on or after 1 June 2023

Examples:

  • A business that has a financial year starting on 1 July 2023 and ending on 30 June 2024 will become subject to UAE CT from 1 July 2023 (which is the beginning of the first financial year that starts on or after 1 June 2023)
  • A business that has a (calendar year) financial year starting on 1 January 2023 and ending on 31 December 2023 will become subject to UAE CT from 1 January 2024 (which is the beginning of the first financial year that starts on or after 1 June 2023)
  1. Will UAE CT be applicable to businesses in each Emirate?

The UAE CT is a Federal tax and will therefore apply across all Emirates

  1. What will be the role of the Federal Tax Authority?

The Federal Tax Authority will be responsible for the administration, collection, and enforcement of UAE CT

  1. What will be the role of the Ministry of Finance?

The Ministry of Finance will remain the ‘competent authority’ for purposes of bilateral/multilateral agreements and the international exchange of information for tax purposes

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