V(a): Corporate Income Tax in the UAE (10 things to know before setting up a business in the UAE)

Vineetha Sony | 29 May 2023 | Middle East perspective

Businesses in the UAE with taxable profits exceeding AED 375,000 (USD 102,000) will become subject to a corporate tax rate of 9% (one of the lowest corporate income tax rates in the region) at the beginning of their first financial year starting on or after June 1, 2023.

The law will be applicable across all Emirates and will apply to all business and commercial activities. Additionally, this law is being implemented in line with global best practices recommended by the OECD and other international bodies advocating for international tax reform.

The UAE’s corporate tax regime No. 47 of 2022 on the Taxation of Corporations and Businesses starts on June 1st, 2023. Therefore, corporations and businesses must register and obtain a tax registration number for corporate tax purposes. Considering the forthcoming approach to corporation tax, we’re sharing with you here further details on what’s now known.

The UAE Federal Tax Authority (FTA) has opened corporate tax registration from May 15th, 2023 onwards through EmaraTax (an online platform, through which you can access digital services for registration, filing returns, paying taxes, and seeking refunds).

Please note that registration is currently available for Public Joint Stock Companies (PJSC) and Private Companies (Including Establishments). Registration for Free Zones and other categories of Taxable Persons will be made available at a later stage. We will update you as soon we receive notification of the same.

The introduction of Corporate Income Tax is intended to help the UAE achieve its strategic objectives and accelerate its development and transformation. The certainty of a competitive Corporate Tax regime that adheres to international standards, together with the UAE’s extensive network of double tax treaties, will cement the UAE’s position as a leading jurisdiction for business and investment.

We’d be happy to connect you to our trusted partners who can offer an efficient and streamlined process to assist you in registering for corporate tax if you fall within the taxable bracket.