UAE Confirms 9% Corporate Tax to Remain in Place for Years

As companies in UAE enter a new tax regime this fiscal year, the Undersecretary of the Ministry of Finance, Younis Al Khouri, has confirmed that the 9% corporate tax, scheduled to come into effect on 1 June 2023, will be staying for several years.

Emirates enacted the federal corporate tax law in December, thereby bringing companies, with over AED 375,000 ($102,000) income into the tax bracket.

Undersecretary further remarked that the Federal Tax Authority (FTA) will release more details regarding tax procedures for the corporate sector.

Also, the new corporate tax is made on the self-assessment principle, requiring companies to ensure that the paperwork submitted to FTA is free from any error and doesn’t violate any law.

According to the details, the new taxation system also gives additional time to the companies to submit their tax returns until 28 February 2025, keeping in view that the fiscal year begins on 1 June 2023 and will end on 31 May 2024.

Undersecretary noted that the corporate tax will improve UAE’s base revenue and added that the government is currently waiting to examine its true impacts after it comes into effect.

The Finance Ministry has also launched a Corporate Tax Public Awareness Program in partnership with FTA to educate companies and tax experts about the upcoming taxation system.

However, some firms won’t have to pay the corporate tax such as natural resources extraction companies, government organizations, pension or investment funds, etc. Speaking about them, the Finance Ministry clarified that they are also subject to local emirate-level tax laws.