Corporate Tax in UAE : An overview

On December 9, 2022, the UAE Ministry of Finance unveiled Corporate Tax, a direct tax levied on the net income of corporations and other businesses. This tax is set to become effective for financial years starting on or after June 1, 2023. Also known as "Business Profits Tax" or "Corporate Income Tax" in other jurisdictions, the UAE's Corporate Tax is positioned to maintain the world's lowest tax rate, reducing the compliance burden on businesses.

The introduction of Corporate Tax is expected to bolster the UAE's revenue, crucial for remaining competitive in the global business and investment landscape. This move aims to instill greater financial discipline in corporate culture, promoting proper record-keeping practices. The proposal to introduce Corporate Tax underscores the UAE's commitment to meeting international standards of tax transparency while safeguarding start-ups and small businesses in the country.