The UAE introduced a federal corporate tax (CT) on the net profits of businesses on 1 June 2023. The tax rate is 9% for taxable income above AED 375,000. Taxable income below this threshold is exempt from CT.
The introduction of CT is a significant change to the UAE tax environment. Previously, the UAE was a tax-free haven for businesses. However, the introduction of CT is part of a broader effort by the UAE government to diversify its economy and reduce its reliance on oil revenue.
The UAE tax environment has evolved significantly in recent years. In addition to the introduction of CT, the UAE government has also introduced several other taxes, including VAT and excise tax. These taxes have been introduced in an effort to raise government revenue and diversify the economy.
The UAE government has also taken steps to improve the efficiency of its tax administration. These steps include the introduction of a new tax system, the establishment of a new tax authority, and the launch of a new tax portal. These reforms have made it easier for businesses to comply with UAE tax laws.
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