The issuance of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses on 9 December 2022 provides businesses operating in the UAE with a framework for understanding how the corporate tax regime will impact their business model. The Corporate Tax law is broadly in line with the public consultation document that was issued in April 2022, however, one of the notable changes is the release of the conditions to be satisfied by UAE Free Zone entities to be eligible for the 0% rate (rather than being taxed at the headline 9% rate).
The UAE Ministry of Finance has announced the introduction of a corporate tax regime that will apply to businesses. It will become effective for financial years starting on or after 1 June 2023. The headlines are that the tax rate will be 0% for taxable income up to AED 375k and 9% on taxable income above AED 375k. Large businesses (expected to be those with revenue above EUR 750m) may be subject to a different tax rate (potentially 15%) in line with the Pillar Two OECD BEPS project.