Business setup companies in Dubai

A complete guide to the new UAE corporate tax for individuals and businesses

The captivating sector of corporate tax in UAE where businesses bloom amidst a dynamic and diverse economic structure is a debatable topic to discuss on. In this Blog, you will get to learn more facts about the new corporate tax in UAE that was announced by the Ministry of Finance (MoF). Here are a few commonly asked Questions one needs to know before starting a new business in UAE: Was there any tax prior to the announcement of the new corporate tax? The UAE first introduced VAT in 2018 at 5% but then in January 2022, they announced a corporate tax that would come in effect this year. What is the rate of corporate tax in UAE? The corporate tax rate is at 9% of the net profit made by the business. However, if the annual profits of the business are up to AED 375,000 then up to that limit no corporate tax would be payable. Are all businesses in UAE subjected to corporate tax? No, not all business in UAE are subjected to corporate tax. The applicability of corporate tax depends on various factors including legal structure, business activities and annual turnover of the company. Why did they introduce the corporate tax in UAE? The corporate tax in UAE was introduced in order to amplify UAE’s position in the global market helping it become a hub for investments and start-ups with affordable registration fees and no corporate tax for new businesses. Is there any tax for small business and start-ups in UAE? No, there aren’t any tax rates for small businesses as of now. In fact, they have introduced Small Business Tax Relief in UAE for businesses with annual revenue of below AED 3 Million. Why did they announce Small Business tax relief for start-ups? The government announced this small business tax relief in order to provide support to small businesses and start-ups so that more people can operate in it. How to register for the Small Business tax relief? Businesses subject to corporate tax are required to register and obtain a tax registration number. The registration application must be submitted to the Federal Tax Authority. Will there be a personal tax in UAE now? No, there is no personal tax on people’s income in UAE. All the salaries, dividends and other income that a person earns in his personal status will not be subject to corporate tax. Navigating corporate tax applicability can be hard and requires a comprehensive understanding of the local tax laws in UAE. It is always advisable to seek professional guidance from a business or tax consultants who specialises in this sector. To seek guidance and help, AB Capital Services is here to deliver all your unique requirements accurately.

A complete guide to the new UAE corporate tax for individuals and businesses Read More »