UAE Govt. introduces Corporate Tax Law applicable from 1st June 2023; [Read Federal Decree]

The United Arab Emirates (UAE) Ministry of Finance has issued Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (Corporate Tax Law).

Dubai was considered as tax heaven, but now this amendment in taxation came as a totally modified agenda of taxation. It establishes the legal basis for corporation taxation on business profits in the UAE.

The UAE Govt. regularizes the new tax rate on Corporate business, which will came into effect from on or after 1st June 2023. This Corporate tax will levied at the rate of 9% for Taxable business Profits Exceeding AED 375,000 (Rs.84,22,986 Appx).

Imposition of Corporate Tax and Applicable Rates

Imposition of Corporate Tax

UAE Corporate Tax shall be imposed on Taxable Income, at the rates determined under this Decree-Law, and payable to the Authority under this Decree-Law and the Tax Procedures Law.

Corporate Tax Rate

1. Corporate Tax shall be imposed on the Taxable Income at the following rates:

a) 0% (zero percent) on the portion of the Taxable Income not exceeding the amount specified in a decision issued by the Cabinet at the suggestion of the Minister.

b) 9% (nine percent) on Taxable Income that exceeds the amount specified in a decision issued by the Cabinet at the suggestion of the Minister.

2. Corporate Tax shall be imposed on a Qualifying Free Zone Person at the following rates:

a) 0% (zero percent) on Qualifying Income.

b) 9% (nine percent) on Taxable Income that is not Qualifying Income under Article 18 of this Decree-Law and any decision issued by the Cabinet at the suggestion of the Minister in respect thereof.

Who All are Exempt from This Tax?

Profits up to and including that threshold will be taxed at a zero percent rate to support small businesses and startups. Also these Tax Rates are not applicable on Salary, interest or other personal Income. Also Income from saving programmes and investment in real estate by individuals in personal capacity is not subject to Tax.

Government entities, pension funds, investment funds and public benefit organisations are also Exempt from this Tax.

For Official Notification Download PDF Given Below: