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UAE Lays Out June 2023 Corporate Tax Plan

UAE Lays Out June 2023 Corporate Tax Plan

For the first time, the UAE will impose a federal corporate tax on business profits.

The UAE Ministry of Finance formally announced the new 9% business tax on profits. It will be implemented on June 1, 2023.

It’s the best chance for the nation to align with a number of other governments across the world, but it also weakens the nation’s ability to compete.

The United Arab Emirates (UAE) has been gradually imposing new taxes as part of its strategy to reduce its reliance on oil revenue.

UAE’s seven emirates: Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah, have begun to take steps to attract international investors.

These efforts include lifting restrictions on business ownership regulations and offering long-term visas.

Additionally, it has softened restrictions on adopting a Monday-Friday schedule.

The corporation tax would not apply to any personal earnings from employment, real estate, or other investments, as well as profits made by companies with foreign registrations.

With a few exceptions and modifications, the corporation tax will be assessed on the profits of UAE businesses as shown in their financial accounts, which were created in accordance with generally accepted accounting principles.

The United Arab Emirates has continuously positioned itself as a country that welcomes foreign investment and offers tax-free income.

Throughout its 50-year history, the nation has been shaped by low taxes and a business-friendly environment.

Companies operating in UAE-free zones are also excluded from the new corporate tax, barring any onshore operations.

Another exception is the oil and gas sector, which has its own taxation framework.

Taxable profits up to Dirham 375,000 will be subject to a zero percent tax rate in a move to support small businesses and startups.

The ministry added that more details on the new corporation tax would be released in the middle of this year, giving UAE businesses ample time to get ready for its implementation.

However, if you want to learn more about the new business tax policy and start the most profitable business in UAE, you can contact us right now.

Bizstart has a team of experienced business consultants that can provide you with scholarly guidance in setting up a new business. Moreover, our professionals will guide you through the entire business process.

They are ready to help and give you comprehensive answers to your questions about VAT, ESR, and corporate tax.

To minimize taxes, our in-field experts can assist you in separating and creating a suitable business structure.

In this way, you can establish your company in UAE and generate remarkable revenue.

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