lowest corporate tax in Dubai

World’s lowest corporate tax in Dubai, UAE?

The UAE has recently announced the implementation of 9% federal tax on business profits. The move to levy corporate tax in Dubai, UAE, comes as the country’s attempt to meet international standards for tax transparency and prevent harmful financial practices.

Here’s all we know about the corporate tax in the UAE

This segment of the article will focus on what, why, who, how and when aspects of the recent announcement.

What is the new corporate tax about and why implement it?

All businesses in the UAE with profits exceeding AED 375,000 per year, will need have to pay 9% federal income tax. Therefore, startups and small-income companies will face any impact by this change.

According to the Tax Foundation, the global average corporate income tax is 23.5%. Therefore, the UAE corporate tax rate will be among the lowest corporate tax in the world.

This will not only help the UAE diversify it economy, but also adapt to international norms. Another recent amendment of weekend shift from Friday and Saturday to Saturday and Sunday is an example of how the country in paving its way to coming at par with highly developed economies.

Who will be exempt from the new rule?

Although the 9% corporate tax in Dubai, UAE will be applicable to all business activities, there are certain exceptions:

  • Free zone companies that do not operate on mainland
  • Firms engaged in extracting natural resources

When and how will corporate tax in Dubai, UAE come into place?

Corporate tax is calculated based on adjusted accounting net profit. The business will have to file one tax return every financial year.

Also, no tax will be levied on regular income from employment and investment in shares or real estate. The new tax is not applicable to profits made from activities that do not involve business or trade in the country.

Need tax consultation?

Shuraa Business Setup will not only assist you with your UAE company formation, but also, provide you suitable financial solutions via its vertical – Shuraa Tax & Accounting Services L.L.C. Manage your business finances with ease. Our team, comprising seasoned accountants and advisors with in-depth knowledge on the UAE tax management will walk you through all legislative processes.

Our comprehensive services include:

  • Company formation
  • Complete documentation
  • Visa processing
  • Vat & tax consultancy
  • Vat registration, reporting, return filing & compliance
  • Accounting & book-keeping
  • MIS reporting & compliance review
  • Excise tax registration & filing
  • Economic substance regulation (ESR) registration & compliance filing
  • Ultimate beneficial ownership (UBO) registration
  • Anti-money laundering (AML) registration & compliance

To get in touch with our company formation experts, simply call on +971 44081900 or send a WhatsApp message on +971 501287254. You can also email us at enquiry@shuraa.com

For services related to corporate tax in Dubai, UAE, call on +971 508912062 or drop an email to info@shuraatax.com

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