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Effective From: 1st June 2023
Authority: The Finance Ministry in the UAE announced the introduction of Corporate Income Tax on 31 January 2022.
The UAE is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) and hence committed to meeting the International Standards for tax transparency and preventing harmful tax practices.
- Applicable to all UAE businesses / Commercial activities
Individuals would be subject to Corporate Tax only if they have ongoing and regular business in UAE.
- Individuals having income from salary/employment income shall not be subject to Corporate Tax. Also, dividends, capital gains and other income from owning shares/securities earned by Individuals in their capacity would not be subject to Corporate Tax.
- Passive income of foreign investors i.e. dividends, capital gains, interest, royalties and other investment returns may not come under the purview of Corporate Tax.
Corporate Tax Rates:
|Income||Rate of Tax|
|Taxable income up to AED 375,000||0%|
|Taxable income above AED 375,000||9% (on portion of taxable income exceeding AED 375,000)|
|For large Multinationals (having consolidated business revenues in excess of EUR 750 Million/ AED 3.1 Billion)||A different Tax Rate. (As per the Guideline from OECD- Pillar 2 it will be minimum 15%)|
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