Starting June 1st 2023, the UAE government will implement a 9% federal corporate tax on corporation profits that exceed an income of AED 375,000 ($102,000), this tax will not, however, be implemented to small businesses that amount to that and below. Chris Payne, who is chief economist at Peninsula Real Estate, states that this announcement should come as no surprise, seeing as corporation tax in the UAE has been in discussion for several years – and is not, in fact, a newly introduced concept in the GCC seeing as similar laws exist in Saudi Arabia and Qatar.
This will apply to all businesses and commercial activities, except for the extraction of natural resources which will remain subject to Emirate level corporate taxation.
The ministry reassures that individuals will not be subject to any income tax from employment, real estate, or equity investments –as well as any personal income unrelated to a UAE business or trade. This tax will also not apply to foreign business investors who won’t be conducting business in the country.
The UAE is still the best business hub there is, and this new law should not affect its status as it remains attractive for many other reasons.