The Federal Tax Authority (FTA) has opened the doors for corporate tax registrations, making it mandatory for all legal entities operating in the UAE to comply with this new regulation. In this blog, we will delve into the key aspects of corporate tax, its objectives, and how it impacts businesses in the UAE.
In accordance with the UAE Federal Decree-Law No. 47 of 2022 on taxation of corporations and businesses, corporate tax is a direct levy imposed on the net income or profit of corporations and other entities from their business operations. Effective from the first financial year beginning on or after 1st June 2023, businesses in the UAE will become subject to this new corporate tax law.
The introduction of corporate tax aligns with the UAE's strategic vision to solidify its position as a leading global hub for business and investment. By implementing this tax, the nation aims to expedite its development and transformation, effectively achieving its long-term strategic goals. Additionally, this move underlines the UAE's commitment to meeting international standards for tax transparency and preventing harmful tax practices, reinforcing its position on the global stage.
The Ministry of Finance has defined the corporate tax rates as follows:
1) 0 percent for taxable income up to AED 375,000: Small and medium-sized enterprises will benefit from a tax exemption on their initial earnings, fostering growth and encouraging entrepreneurial ventures.
2) 9 percent for taxable income above AED 375,000: Businesses earning beyond the threshold will be subject to a competitive 9% tax rate, ensuring a balanced approach to revenue generation while still fostering a business-friendly environment.
3) Different tax rate for large multinationals: For multinational corporations meeting specific criteria under 'Pillar two' of the OECD Base Erosion and Profit Shifting Project, a different tax rate will be applied. This step demonstrates the UAE's commitment to international tax standards and preventing profit shifting practices.
As the UAE embarks on this new phase of financial regulation, it becomes imperative for businesses to align with the corporate tax requirements. By complying with the Corporate Tax Law, businesses can continue to thrive in the UAE's flourishing economy while contributing to its continued growth and transformation. Discover the Advantages of Partnering with BSD Prime Services for Corporate Tax Registration:
Unparalleled Expertise: Our team of seasoned professionals possesses extensive knowledge of the intricacies involved in corporate tax registration. Rest assured that your application will be handled with precision and efficiency.
Tailor-Made Solutions: Recognizing that every business is unique, we offer customized support tailored to your company's specific legal status. Whether you're an LLC, sole establishment, partnership, or a branch of a foreign or domestic company, our experts will guide you with personalized care.
Streamlined Registration: Bid farewell to administrative burdens. We take charge of the entire registration process, freeing you from time-consuming tasks and allowing you to focus on your core business activities.
Choose BSD Prime Services today and experience a seamless and stress-free corporate tax registration process that sets your business on the path to compliance and success. Our dedicated professionals are here to support you every step of the way. Should you have any questions or require assistance with tax matters, our team is readily available to support you on this journey towards sustainable fiscal compliance.