UAE to impose corporate tax in 2023: Will your salary be affected?

UAE to impose corporate tax starting June 2023

Businesses in the UAE will be subject to corporate tax starting on or after June 1, 2023, the Ministry of Finance confirmed. Under the Federal Decree Law, corporate tax will be set at 9 percent for taxable business profits that exceed Dh375,000. Business with profits at Dh375,00 or less will not be taxed as part of the UAE’s support for small businesses and start-ups. According to the Ministry of Finance, the 9 percent standard rate is among the most competitive in the world. Businesses exempt from corporate tax include those engaged in natural resource extraction. However, they remain subject to existing local emirate-level taxation. Government entities, pension funds, investment funds and public benefit organisations are also exempted from corporate tax. Existing free zone entities will also be eligible for 0 percent corporate tax rate on qualifying income. Additionally, the Corporate Tax regime provides generous relief for intra-group transfers and restructurings, and allows group companies to use each other’s available tax losses.

Will UAE Corporate Tax affect your salary?

Under the provisions of the Corporate Tax Law, Corporate Tax will not be applied to salaries or other personal income from employment, whether it is earned from work in the government, semi-governmental or private sector. Interest and other personal income earned from bank deposits or savings programmes are also not subject to Corporate Tax, as well as investment in real estate by individuals in their personal capacity. The Federal Tax Authority will be responsible for the administration, collection, and enforcement of the Corporate Tax Law. ICA/Expat Media ALSO READ: Corporate Tax in UAE: FAQs Full text of Corporate Tax Law 

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