Calculating the taxable income will be one of the key concerns of business owners when the UAE corporate tax comes into force on June 1st 2023. Although spancom in Dubai can help you to calculate the taxable income accurately, understanding the rationale behind the calculation of taxable income is critical for you. This article deals with the approach adopted by the UAE government to determine the amount of income that will be taxed under the proposed corporate tax regime.
However, business owners should understand that the government is yet to publish the UAE Corporate Tax Law. It means many aspects of taxation may change once the final law comes into force. In light of this, business owners are advised to seek guidance from corporate tax advisors in Dubai before making any tax-related decision. The following article is based on the UAE Corporate Tax Public Consultation Document, which will enlighten you on how to calculate your taxable income.
Basis of Calculating Taxable Income Under the UAE Corporate Tax
The UAE corporate tax regime has adopted the use of accounting net profit or lose as stated in the financial statement of a business as a starting point to determine the taxable income. The usage of such a system is likely to reduce the complexity of the process as well as the compliance costs. Using the accounting standards also provides a common definition of income and a base as per the international standards.
This system also helps to limit the book-tax differences and prevent the businesses from having to maintain two sets of records: one for financial reporting purposes and the other for corporate tax purposes. Corporate tax advisors in Spancom can advise you on how to calculate your taxable income using the accounting net profit or loss method.
