Corporate Tax in UAE – Everything You Need to Know

uae corporation tax

The UAE is known for its expansive landscape, and with it becoming an international business hub, which was tax-free until now – it’s imperative that the implications of Corporate Tax in Dubai need to be evaluated by all the stakeholders and devise a constructive way forward.

Last month, the Ministry of Finance in the UAE introduced a 9% Corporate Tax, applicable for financial years starting on or after 1st June 2023. This created quite an uproar, but with effectively managing compliance responsibilities, developing plans, and proactively managing risks – the implications can be handled well.

The Corporate Tax Rates will be 0% for taxable income up to AED 375,000, 9% for taxable income above AED 375,000, and a different tax rate for larger multi-nationals having a consolidated revenue exceeding EUR 750 million, and that meet the criteria set based on ‘Pillar 2’ of the OECD Base Erosion and Profit Shifting Project.

It will also allow businesses to use losses incurred with effect from the Corporate Tax effective date for any business, to offset the taxable income in subsequent financial periods. It will also allow tax credit against UAE Corporate Tax liability if the Foreign Corporate Tax is paid on UAE taxable income.

If you are wondering about the risks to your business, and need a more detailed understanding – it’s best to get in touch with TRC Pamco, one of the leading accounting and taxation firms, providing Corporate Tax Services in the UAE – and they can help you maximize opportunities by:

  • Reviewing your current business structure
  • Conducting an in-depth analysis of the possible impact on all the activities undertaken by your business
  • Suggesting a strategic alignment to optimize it for tax purposes
  • Engaging with management on the optimal structure for your business and devising a prudent and tax-efficient structure considering your requirements.

Get in touch with TRC Pamco today!