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How New Corporate Tax In The UAE Impact Businesses?

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  • Taxation
  • 2022-12-11
  • Mr. Waseem

How New Corporate Tax In The UAE Impact Businesses?

The government of UAE is implementing corporate tax which will be taken for businesses however, it will make it remove the tag of tax haven which was UAE in the past.  Meet the expert for the consultation to save your business from the impact of corporate tax.

What Is Corporate Tax In UAE 2023?

For a long time, the United Arab Emirates (UAE) could only be seen as an oil-dependent nation. But Dubai worked methodically over the years, freeing the country to position itself as a modern state through massive investments in innovation and technology.The corporate tax in the United Arab Emirates has many workers worried about their paychecks.The UAE government has announced a 9 percent corporate tax beginning in June 2023 as a means to normalise the country’s business sector. It is anticipated that the country’s business community will be significantly impacted by the corporate tax.

The Introduction of the tax is most likely to have a disproportionate impact on bottom-rated UAE GREs and onshore, privately owned companies rated as standalone entities. Many factors, including issuers’ ability to pass on price increases and offset the negative effects of income tax on cash flows, issuers’ rating headroom and financial flexibility, and the nature of the issuer’s industry and business, will determine the precise impact on individual credit profiles. Additionally, unlike rules in some other Gulf Cooperation Council (GCC) countries, the proposed UEA tax rules do not differentiate tax rates for entities with local and foreign ownership.

Why the corporate tax is needed?

Adding a federal corporate tax would help the UAE raise more money for its diversification and growth plans. Furthermore, four of the six GCC countries already have a comprehensive corporate tax system, with Saudi Arabia imposing corporate tax at 20%, Qatar at 10%, Kuwait at 15%, and Oman at 15%. This means that the UAE’s implementation of a federal corporate tax at a rate of between 10% and 15% should not necessarily make it less competitive in the region.The United Arab Emirates has a choice: either broaden its tax base by instituting a minimum level of federal corporate tax and reaping tax revenue from companies operating in the UAE, or risk maintaining the status quo and allowing other countries to tax UAE businesses in the future, eroding one of the UAE’s historical advantages. new rule may cause some extra paperwork for businesses, as they will have to establish reporting procedures, but we anticipate this to be a one-time occurrence at most. The new rules may also make the country’s corporate tax environment less competitive compared to that of other economies.

What are the benefits of this corporate tax?

?Businesses in the United Arab Emirates (“UAE”) will be required to pay corporate income tax commencing with their first fiscal year beginning on or after 1 June 2023 (“Corporate Tax”).

?For company income over AED375,000, the tax rate is a flat 9%. To encourage new ventures and help existing ones get off the ground, profits up to that amount will be taxed at 0%.

?Existing businesses in free zones will pay no corporate tax on their qualifying earnings.

?Salaries and other forms of personal income from work, interest and other forms of personal income gained through bank deposits and saving programmes, and real estate investment by individuals in their personal capacity are all exempt from the new corporate tax.

Which is best in UAE for corporate tax?

If you are considering corporate tax in Dubai in the UAE, then Risians Accounting is a pioneer in setting up your business financial needs, from registration to identifying an appropriate location for your organisation or filing tax. Risians Accounting has expert team who has good experience and knowledge about the corporate tax. Contact us now to get the free consultation, our expert team would be happy to help you.


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