Businesses need to understand how can they claim foreign tax credits since the UAE corporate tax is set to become effective from June 1st 2023. Corporate tax consultants in Spancom can help entrepreneurs claim foreign tax credits to avoid double taxation on their income. Your business in the UAE will be subject to UAE corporate tax on all the income including the overseas income that might have been subject to a tax by another country, which is equivalent to the corporate tax.
This means you may have to face the risk of double taxation when you reside in one nation and receives revenue from any other business in a different country. Double taxation makes the process of carrying out international business unaffordable. It would hinder development if a company is forced to pay taxes in two countries. The UAE corporate tax regime will include the provision of tax credits to avoid the risk of double taxation.
However, businesses need to wait till the government releases the UAE corporate tax law. In this article, we would provide you with basic knowledge on tax credits as stated in the UAE corporate tax public consultation document. You can make further tax decisions once the law comes out with the help of corporate tax advisors in Spancom.
