All you need to know about Corporate Tax in the United Arab Emirates

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The Corporate Tax Law has been officially released explaining some important details for companies to be prepared for the new tax law.

The Government of the United Arab Emirates will introduce corporate tax at 9% from the net profit exceeding 375,000 AED starting from 1st of June 2023.

Is there a Minimum threshold to pay?

Companies and individuals earning a yearly net profit over Dh375, 000 net profits will have to pay 9% as tax to the government.

Will corporate tax apply to turnover or profit?

Corporate tax will be applied to the net profit, not to the total turnover of the company.

Will UAE residents getting a salary of over Dh375, 000 have to pay tax?

No. It will not be applicable to the salary or Bonus received from the company.

Will business owners earning from the entity as managerial remuneration be subject to tax?

A payment or benefit made to a connected person is deductible from revenue as expenses and should be as per the Market standard level and any excess payment or benefit is subject to corporate tax. The connected person includes owners and directors of the taxable person.

Income earned from Real Estate, bank deposits, and other bank investments will be taxable?

Corporate tax will not be applicable on the personal income earned from bank deposits, savings and investments, dividends, With respect to real estate income.

The corporate tax will be applicable to freelancers?

Individuals holding the freelance permit, under the self-sponsorship and earning income in excess of the threshold will be subject to corporate tax.

Are non-residents also subject to corporate tax?

Non-residents are also subject to corporate tax if they have a permanent establishment in UAE as well as on state-sourced income in the country. real estate or any other investment.

Who is exempted from the corporate tax?

Free zones companies which fulfil the conditions explained in the Regulations of the UAE Corporate Tax Law will be exempt.

Is it mandatory to maintain books and records?

Yes. All taxable persons shall be obligated to maintain records and documents for seven years following the end of the tax period.

When tax returns should be filed?

Annual corporate tax returns will be required to be filed by all taxable persons no later than nine months from the end of the relevant tax period.

To get more details on how to register and file the tax, please contact our Team on : Info@FreeZoneMarket.ae or call us on +971 4 876 9890.

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