As of June 1, 2023, the United Arab Emirates implemented a corporate profit tax for companies with annual revenues exceeding AED 375,000 (approximately USD 100,000). This measure marks a significant step toward enhancing financial and economic transparency in the country, aligning the UAE's tax system with international standards.
Key features of the new corporate tax include:
- Tax Rate: The standard corporate tax rate is set at 9% of a company's net profit. This remains one of the lowest corporate tax rates globally, ensuring the UAE continues to be an attractive destination for international businesses.
- Exemptions and Benefits: Companies registered in free economic zones (FEZs) can still enjoy a 0% corporate tax rate if they meet specific conditions. However, this exemption applies only to activities related to international trade.
- Reporting and Accounting: Companies are required to maintain accurate records of income and expenses and submit annual tax returns. Strict accounting standards have been introduced to enhance business transparency and attract international investors.
The introduction of the corporate tax does not affect small businesses and startups with annual revenues below AED 375,000, maintaining a favorable environment for entrepreneurship. However, all large and medium-sized companies, including branches of international corporations, must comply with the new tax regulations. These changes enable entrepreneurs and investors to plan their financial activities in line with the new requirements while minimizing tax risks through expert advice.
We offer comprehensive services for bookkeeping, preparation, and filing of reports in compliance with the UAE's new tax regulations. Our experts will assist your business in adhering to legal requirements and efficiently managing its tax obligations, fostering sustainable growth for your company in Dubai.
