Corporate Tax 2023 An Overview
Corporate Tax 2023 An Overview As a move to reduce the dependence on traditional revenue earned from fossil fuels, UAE is planning to introduce corporate tax of 9% from June 2023 onwards. Business people are deeply concerned about the implication of corporate tax and expected future development of the emirates.
What is Corporate Tax?
Corporate tax is a direct tax levied on the profits of business entities. Business owners are subjected to pay taxes on production , people , property and environmental impacts as well as firm income. According to the top accounting firm in UAE, corporate tax is used as the source of revenue for a country ensuring businesses operate with correct governance and tax structure.
Who all comes under Corporate Tax?
The UAE is a paradise for startup entrepreneurs to establish their business goals and the new corporate tax policy is never going to make hurdles in the success route of small or medium scale business people.
Expert corporate tax consultants in UAE suggest that the tax reforms do not affect startups, only businesses outside the free zones earning a revenue more than AED 3,75,000 in profits come under the tax limit.
Exemption Category
The current proposal of tax offers exception to natural persons including
Federal emirate governments
UAE owned companies listed in a cabinet decision.
Business engaged in extraction and exploitation of UAE natural resources.
Charities and public benefit organizations.
Social security and retirement pension funds.
Specialised investment funds.
The employment income and other personal income earned by UAE residents and foreign individuals will not be within the scope of the proposed UAE corporate tax regime.
GCC s Following Corporate Tax
Among the 6 GCC countries UAE offers the lowest rate of 9%.
Qatar 10%
Kuwait 15%
Oman 15%
Saudi 20%
UAE 9%
Successful Models
Even though corporate tax is a novel strategy of the UAE government, top professional accounting and auditing firms in the UAE put forward many successful models of other countries like Singapore which improved the economy through corporate tax implementation.
When will it become Reality?
The normal business year is from January to December. A business that has a financial year starting on January first 2023 and ending on December 31,2023 will become subject to UAE corporate tax from January 1, 2024.
A Boon or Curse
Tax consultants in UAE, believe the corporate tax would energize the economy without disappointing the investors and business people. In the long term, UAE could transform from an oil lubricated economy to a self dependent economic power with consistent tax revenue for more developmental activities
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