Release of Explanatory Guide on UAE Corporate Tax Decree Law

The introduction of Corporate tax in the UAE marks a historic and landmark change in its regulatory landscape which will further strengthen its attractiveness and positioning globally and shall be conducive to the expansion of business, trade, commerce, and investments. Effective 1^st June 2023, UAE enters into the Corporate tax era, where corporations and businesses will be subject to a levy of federal tax @ 9% on their annual taxable income in excess of Dirhams 375,000.

The corporate tax law was published in the official gazette on 10^th October 2022 and has been designed considering the international practices and principles with a minimum of compliance obligations for any businesses. The law comprises 20 Chapters and 70 articles. The Ministry of Finance has been organizing awareness sessions and issuing several implementing decisions in accordance with the provisions of the law. The Ministry has recently issued an Explanatory Guide aiming to provide clarity and a comprehensive explanation of the meaning and intended effect of each Article of the law which will be helpful in interpreting them and how they have to be applied. The Guide has to be read in conjunction with the law, decisions, and procedures. The Guide is available at www.mof.gov.ae and may be updated and changed periodically.

It’s a commendable move that will provide certainty over the provisions of the law and is a reflection of the UAE’s leadership in enhancing the ease of doing business in the UAE and ensuring that businesses are provided with precise and timely information and bridging their seamless and successful transition into Corporate Tax regime.

Stay tuned for more insights on provisions of UAE Corporate Tax Law. For any assistance, you may reach out to us by calling us at +971 52 6406240 or by emailing us at [email protected].