UAE introduces new corporate tax laws to assist firms in adapting once law takes effect in June
The UAE's Ministry of Finance (MoF) announced a new decision on corporation tax regulations on Friday in an effort to make the transition time for businesses easier after the law takes effect on June 1.
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FollowThe UAE's Ministry of Finance (MoF) announced a new decision on corporation tax regulations on Friday in an effort to make the transition time for businesses easier after the law takes effect on June 1.
The authority stated in an advisory that these "transitional provisions" under the Corporate Tax Law introduce "adjustments for the opening balance sheet." Additionally, it offers "essential clarifications" that will facilitate a smooth transition for firms both before and after the law's implementation.
The authority stated in an advisory that these "transitional provisions" under the Corporate Tax Law introduce "adjustments for the opening balance sheet."
Additionally, it offers "essential clarifications" that will facilitate a smooth transition for firms both before and after the law's implementation.
The choice, however, would be permanent except in special circumstances, the ministry said.
As originally announced at the beginning of this year, the new regulation would force businesses and organizations to pay a regular 9% tax on taxable income over AED 375,000 ($102,000) on or after June 1, 2023.
A corporate tax rate of 0% will apply to taxable profits below the aforementioned threshold. According to the UAE Ministry of Finance, the corporation tax law will establish the nation as a premier international hub for trade and investment. It will contribute to the goals of the country's transformation and growth while ensuring tax transparency and avoiding fraud.
Any company or entity whose fiscal year starts on July 1, 2023, and concludes on June 30, 2024, must pay the new tax by July 1, 2023.
From January 1, 2024 (the commencement of the first fiscal year that begins on or after June 1, 2023), a company with a fiscal year beginning on January 1, 2023, and ending on December 31, 2023, will be liable to UAE Corporate Tax.
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