Corporate Tax & VAT Tax in UAE
Introduction
Corporate tax (CT) is a form of direct tax levied on the net income or profit of corporations and other entities from their business. Corporate Tax is sometimes also referred to as “Corporate Income Tax (CIT)” or “Business Profits Tax” in other jurisdictions.
Latest Updates on Corporate Tax in UAE
The recent updates in UAE on Corporate Tax implemented on May 8, 2023, the UAE Cabinet of Ministers enacted Cabinet Decision No. (49), imposing a 9% corporate tax on specific businesses. This approach has been interpreted as a calculated attempt to diversify the means of revenue in the UAE outside oil while maintaining its status as a major hub for trade in the area.
As per Ministry of Finance, CT rates are:
- 0% for taxable income up to AED 375,000
- 9% for taxable income above AED 375,000
Latest Updates on VAT Tax in UAE
The recent updates on VAT Tax in UAE are related to the following:
- Voluntary Disclosure
- Labour Accommodation
- Profit Margin Scheme
- Exchange Rates
- Director’s Services
- Non-Recoverable Input Tax
- VAT treatment compensation
- Change in the List of Designated Zones
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