Corporate Tax Services in UAE

The UAE CT regime will become effective for financial years starting on or after 1 June 2023. e.g. A business that has a (calendar year) financial year starting on 1 January 2023 and ending on 31 December 2023 will become subject to UAE CT from 1 January 2024 (which is the beginning of the first financial year that starts on or after 1 June 2023).

UAE CT will apply to all UAE businesses and commercial activities alike, except for the extraction of natural resources, which will remain subject to Emirate level corporate taxation.

UAE CT will not apply on an individual’s salary and other employment income.

Individuals will not be subject to UAE CT on dividends, capital gains and other income earned from owning shares or other securities in their personal capacity.

UAE CT will generally apply to income earned from activities carried out under a freelance license / permit, albeit no CT will be payable unless the annual net income of the freelance professional exceeds AED 375,000.

The CT liability will be calculated as follows:

• Taxable income of AED 0 - AED 375,000 at 0% = AED 0
• Portion of taxable income exceeding AED 375,000 (i.e. AED 400,000 - AED 375,000 = AED 25,000) at 9% = AED 2,250

Dividends and capital gains earned by a UAE business from its qualifying shareholdings will be exempt from UAE CT.

Businesses engaged in the extraction of natural resources will remain subject to Emirate level corporate taxation and be outside the scope of the UAE CT.

ACA serves several services to the client such as accounting and book keeping, VAT related services, Auditing and Taxations. We are giving regulate update to the client regarding the corporate tax. For the time being we are waiting for the final legislation. ACAMost of the companies in UAE follow calendar year as their financial, so corporate tax effective for those companies will become subject to UAE CT from 1 January 2024. In 2022 and 2023, our focus on to prepare books of accounts and close the books by preparing necessary financials like balance sheet and profit and loss accounts for all, so it should be easy they can manage after corporate tax also.