Consulting Services for UAE corporate tax 2023

As Dubai's leading consulting company, A to Z Business Consultancy have created a service to help you stay up-to-date on the UAE’s corporate tax regulations. Book your consultation with our taxation expert.

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About 2023 Corporate Taxation

Set to come into force this year, here is all you need to know about the corporate tax scheme UAE officially issued a federal decree-law on corporate tax at a 9 %t rate for taxable business profits exceeding AED375, 000.

The new law was announced in December 2022 and is set to come into effect for financial years starting June 1, 2023.

Corporate tax rates

  • Zero % on the portion of the Taxable Income below AED375, 000.
  • Nine % on Taxable Income that exceeds AED375, 000.
  • Government entities.
  • Government controlled entities.
  • Person engaged in an extractive business.
  • Person engaged in a non-extractive natural resource business.
  • Qualifying public benefit entity.
  • Qualifying investment fund.
  • Public pension or social security fund that is subject to regulatory oversight of the competent state authority.
  • Private pension or social security fund that is subject to regulatory oversight of the competent state authority.
  • A juridical person incorporated in the State that is wholly owned and controlled by an Exempt Person that conducts any of the following: o Undertakes part or whole of the activity of the Exempt Person.
    o Is engaged exclusively in holding assets or investing funds for the benefit of the Exempt Person.
    o Only carries out activities that are ancillary to those carried out by the Exempt Person.
  • Any other Person as may be determined in a decision issued by the Cabinet at the suggestion of the Minister.

Corporate taxable persons

  • UAE companies and other juridical persons that are incorporated or effectively managed and controlled in the UAE;
  • Natural persons (individuals) who conduct a Business or Business Activity in the UAE as specified in a Cabinet Decision to be issued in due course; and
  • Non-resident juridical persons (foreign legal entities) that have a Permanent Establishment in the UAE (which is explained under [Section 8]).
  • Juridical persons established in a UAE Free Zone are also within the scope of Corporate Tax as “Taxable Persons” and will need to comply with the requirements set out in the Corporate Tax Law. However, a Free Zone Person that meets the conditions to be considered a Qualifying Free Zone Person can benefit from a Corporate Tax rate of 0 percent on their Qualifying Income.
  • Non-resident persons that do not have a Permanent Establishment in the UAE or that earn UAE sourced income that is not related to their Permanent Establishment may be subject to Withholding Tax (at the rate of 0 percent).

Calculate taxable income

To determine the Taxable Income of a Tax Group, the parent company must prepare consolidated financial accounts covering each subsidiary that is a member of the Tax Group for the relevant Tax Period.

Transactions between the parent company and each group member and transactions between the group members would be eliminated for the purposes of calculating the Taxable Income of the Tax Group.

Corporate tax deadlines

The regime’s payment and compliance deadline allows taxpayers a generous time frame of up to 21 months from the start of their financial year to prepare for filing and making their tax payments.

The deadline means, for example, that businesses with a financial year starting on June 1, 2023 and ending on May 31, 2024 will have the period starting from June 1, 2024 to February 28, 2025 to file their corporate tax returns and make their payments.

For a business where its first tax period starts on January 1, 2024 and ends on December 31, 2024, the return and payment would need to be made between January 1 and September 30, 2025.

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Need help with UAE Corporate Taxation 2023!

Contact us to find out more abut Corporate Taxation rules and regulations. A to Z Business Consultancy provides consulting services on corporate taxation 2023 for companies incorporated through us.

Contact us for more info on Corporate Taxation 2023.

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