Yousef Al Bustanji (Abu Dhabi)
The Ministry of Finance expected the issuance of the corporate tax law within a month from now and emphasized that the issuance of the law will be accompanied by the issuance of authority decisions that contribute to strengthening the work on the new law.
In response to a question from Al-Ittihad, the ministry said the corporate tax law will apply to tax periods beginning on or after June 1, 2023. The ministry stated that companies that start their financial year on 1 July 2023 and end on 30 June 2024 will be subject to corporation tax. Effective July 1, 2023 (being the start of the first fiscal year beginning on or after June 1, 2023).
As for companies that have a financial year (calendar) beginning on January 1, 2023 and ending on December 31, 2023, they will be subject to corporation tax in the country from January 1, 2024 (which is the beginning of the first financial year years beginning on or after 1 June 2023).
According to what was announced by the ministry, corporate tax rates are 0% for taxable income up to 375,000 dirhams, while it is 9% for taxable income of more than 375,000 dirhams. Pillar Two” of the OECD Base Erosion and Profit Shifting Project.
In the context of the global minimum effective tax rate as proposed under “Pillar 2” of the OECD BEPS project, the term “large enterprise” refers to a multinational corporation with a total global revenue of more than €750 million (3.15 billion). AED approx).
The corporate tax to be applied in the country is a form of direct tax levied on the net income or profit earned by companies and other businesses.
In some other countries, corporation tax is referred to as “corporate income tax” or “corporate profit tax”.
The ministry believes that imposing corporate tax based on international best practices will strengthen the UAE’s position as a leading global center for business and investment and accelerate the development and transformation of the country to achieve its strategic goals, and that with the introduction of corporate tax , the country renews its commitment to meet international standards for tax transparency and prevent harmful tax practices.