The Federal Tax Authority (FTA) of United Arab Emirates has announced on January 31st, 2022 the new federal Corporate Income Tax that will effectively start on or after June 1st, 2023.
The Federal Tax Authority (FTA) of United Arab Emirates has announced on January 31st, 2022 the new federal Corporate Income Tax that will effectively start on or after June 1st, 2023. It’s a turning point time in Untied Arab Emirate’s rich history 50 years of successful track record, integrating with global trade and best practices, coming out with an effective tax framework, while minimizing compliance burden on companies and framing them more transparent.
While the law has not yet been issued, the Federal Tax Authority (FTA) has publicly announced the key principle and policy choices for the new regime which states:
Further information on UAE CT regime will be issued in the middle of the year.
The CT will be applied to everyone (legal persons and individuals) carrying out company activities in the United Arab Emirates (UAE), under a commercial license, including organizations operating in the banking sector. Except for the following:
The corporate tax will be applied to the net profit of a company which is the amount reported in the Financial Statements prepared in accordance with international accounting standards. There will be a progressive tax rate that will be applicable on the following:
The objective for this aim is to cement United Arab Emirate’s Position as a world-leading hub for businesses & investment. Meeting international standards for tax transparency and preventing harmful tax practices. And accelerating the United Arab Emirate's development & transformation to achieve strategic objectives.
Key features that the Federal Tax Authority (FTA) indicated:
Tax rates is one of the most competitive and low-priced rates in the world, with built-in great flexibility and as obscure as it may sound, this Is actually a great move that will benefit big businesses, tax data will help out them to demonstrate their financial performance and will get them to start financing. Full fine print details yet to be announced by the Federal Tax Authority.