The UAE was known around the world to be a no tax region until the introduction of Value Added Tax ( VAT) in 2018. The tax regime in the UAE is about to witness one of the biggest milestones in many years when the country introduces Corporate Tax in 2023. The introduction of Corporate Tax copies the UAE’s commitment to meeting international standards for tax transparency and preventing harmful tax practices.
1. What is Corporate Tax (CT)?
Corporate Tax in the UAE can be defined as a type of direct tax put on the net income or profits of corporations and other businesses. In other jurisdictions, it is also referred to as
“Corporate Income Tax” or “Business Profits Tax”.
2. When will the UAE Corporate Tax government become effective?
The UAE Corporate Tax will be effective for financial years commencing on or after 1st June 2023.
3. Who will be subject to UAE Corporate Tax?
The Corporate will apply to all the UAE businesses and commercial activities except for those businesses engaged in the extraction of natural resources. This is because they are subject to Emirate level corporate taxation and they will continue to be within its scope.
