What is UAE corporate tax?

In January 2022, the UAE Ministry of Finance will

declared the federal corporation tax (CT) would be implemented. Corporate tax is a direct tax levied on the net income or business profits of companies and other business entities.

UAE corporate tax applies to all businesses in the UAE, except for the extraction of natural resources, which will continue to be subject to emirate-level corporate taxation. Foreign companies and individuals are subject to corporate tax only if they carry on a continuous or regular trade or business in the UAE.

UAE corporate tax applies equally to all categories of profit and other (net) income reported in financial statements prepared in accordance with internationally accepted accounting standards.

Why corporate tax?
Applying corporate tax in the UAE is considered a competitive advantage in attracting foreign investment to the UAE. Paying corporate tax is an additional personal
If the business owners come to China, the tax will be more favorable. The company’s tax policy is one of the best in the world in terms of the industry and investment center of the world. In order to accelerate the development of the system, it will be implemented as a strategic guideline, and its tax transparency will be increased to prevent harmful tax collection practices. .

Corporate tax rates in GCC countries
The corporate tax rate is 10% in Qatar, 15% in Kuwait and Oman, and 20% in Saudi Arabia. The UAE announced that it will impose a 9% corporate tax on corporate profits from June 1, 2023, and Bahrain also plans to introduce it in 2023.

Kuwait, Saudi Arabia and Qatar impose corporate taxes on distributions of profits attributable to non-GCC shareholders of local entities. For example, in Saudi Arabia, corporate tax only applies to income earned by non-Saudi owners.

The importance of books in corporate tax
All GCC countries including the UAE

We live in an era of digital transformation, and bookkeeping has gone digital using business management software. With the introduction of the VAT and Corporation Tax proposals a few years ago, managing bookkeeping is no longer an option, but automating it using business management software is a must.

Books and financial statements will become even more important to companies given the way they calculate their accounts. This is because the net profits based on these statements are the basis for calculating the corporate tax payable by the company.

The accuracy of business data determines the accuracy of financial statements and ensures that appropriate corporate tax amounts are determined. Now is the best time for businesses to invest in reliable business management software and prepare their business taxes before implementation.

You can also Register for Corporate Tax Registration on our website:

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