Insights
An Overview of Corporate Tax in the UAE
By
Aliasgar Poonawalla
The United Arab Emirates (UAE) has recently introduced a Federal Corporate Tax, marking a significant shift in the country’s tax landscape. This tax is applicable to businesses from the beginning of their first financial year that starts on or after 1 June 2023.
The introduction of Corporate 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.
The Corporate Tax Law provides the legislative basis for the introduction and implementation of a Federal Corporate Tax in the UAE. It incorporates principles that are internationally known and accepted, ensuring that the UAE Corporate Tax regime will be readily understood and is clear in its implications.
The standard rate of corporate income tax in the UAE is 9%, which is one of the lowest within the GCC region. This competitive rate, combined with the country’s strategic location and robust infrastructure, makes the UAE an attractive destination for businesses.
The introduction of Corporate Tax in the UAE represents a major milestone in the country’s economic development. It reaffirms the UAE’s commitment to meeting international standards for tax transparency and preventing harmful tax practices.