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Page last updated:: Wednesday, February 28, 2024

Corporate and Business Tax: A new stage in boosting sustainable development

Monday, February 27,2023

With the Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses issued, the UAE tax sector enters a new phase of expansion and development, consolidating its productive role in the national economy. The Federal Tax Authority continues on the successful path it embarked on several years ago, intensifying efforts to administer, collect, and enforce federal taxes in line with the highest international standards, providing all means of support and assistance to enable taxpayers to self-comply with tax laws, enhance their contribution to the diversification of the national economy and increase non-oil revenues.


The introduction of Corporate and Business Tax forms part of the wise leadership's plans to achieve the highest rates of sustainable development and shape a bright future for coming generations, in line with the premise that "human beings are the basis and end-goal of development efforts". This is achieved by maintaining the advanced levels of wellbeing that have been achieved in all fields, and striving for even higher levels of quality of life by implementing a comprehensive and balanced tax system to further diversify sources of income, develop efficiency and productivity in current economic sectors, add new industries to drive the national economy forward, and encourage the priVATe sector to play a pioneering role in all economic and development fields.

 

Since the announcement of Corporate and Business Tax, the FTA has intensified its efforts in collaboration with relevant authorities to set up the procedures for implementing Corporate and Business Tax in accordance with the best international practices, to ensure efficiency, accuracy, and seamless processes. The FTA prioritizes helping business sectors comply with tax legislations through clear and flexible procedures, and launching the early registration stage for Corporate and Business Tax on EmaraTax, the platform for digital tax services. This enabled certain businesses in the UAE to register for Corporate Tax on the platform, while preparations continue to open registration for the remaining businesses, giving them plenty of time to register and meet their tax obligations.


The UAE's Corporate and Business Tax system is among the most competitive in the world with a nominal standard rate of 9%. This serves to reduce the burden on businesses and maintain the UAE's status as an attractive destination for investment. Corporate and Business Tax will apply at a rate of 0% on taxable profits that do not exceed AED 375,000 per year to support and encourage startups and SMEs. One of the main objectives of implementing Corporate and Business Tax is to strengthen the UAE's position as a leading global centre for business and investment, support sustainable national development plans, reaffirm the UAE's commitment to international standards of tax transparency, and prevent harmful tax practices.


The FTA continues to cooperate with the relevant authorities to ensure the smooth and successful implementation of Corporate and Business Tax within the integrated national tax system, and in line with the highest standards. The FTA is committed to providing all means of support for taxpayers to comply voluntarily, establishing a clear, efficient, and transparent legislative environment


,Khalid Ali Al Bustani

Director General of the Federal Tax Authority


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