The UAE Will Not Introduce Any ‘Income Tax’… For The Time Being!
Shortly after news broke that the UAE will introduce a federal corporate tax of 9% on business profits that will be effective for financial years starting June 1, 2023 onwards, residents couldn’t help but ponder if income tax was on the cards as well.
Precisely 3 weeks since the announcement, Dr. Thani Al Zeyoudi, Minister of State for Foreign Trade clarified to Gulf News in an exclusive interview that “[income tax] is not at the table at all now.”
Although Dr. Zeyoudi’s statement helped to elucidate the matter on income tax and the fact that it will not be imposed, for the time being, it also revealed that it could be a potential move in the distant future.
More on corporate tax: Personal income from employment, real estate and other investments will not be taxed
No corporate tax will apply on personal income from employment, real estate and other investments, or on any other income earned by individuals that does not arise from a business or other form of commercial activity licensed or otherwise permitted to be undertaken in the UAE.
The UAE corporate tax regime will ensure the compliance burden is kept to a minimum for businesses that prepare and maintain adequate financial statements. Businesses will only need to file one corporate tax return each financial year and will not be required to make advance tax payments or prepare provisional tax returns. Transfer pricing and documentation requirements will apply to UAE businesses with reference to the OECD Transfer Pricing Guidelines.
Read more here.
A number of businesses in the country have backed this new directive and shown support to the country’s efforts to align itself with new international standards, as disclosed by Al Zeyoudi.
