The Corporate Tax of UAE will remain the lowest tax rate in the world, and it reduces the compliance burden on businesses. The introduction of Corporate Tax will increase the revenue of the UAE which is essential to stand competitive in the global business and investment environment. This would bring more financial discipline in the corporate culture which would in turn result in the proper maintenance of record keeping. The proposal of introducing Corporate Tax stems from the UAE’s commitment to meet international standards of tax transparency while protecting start-ups and small businesses in the UAE.

 The UAE Ministry of Finance has introduced Corporate Tax, a direct tax imposed on the net income of corporations and other businesses, on 9th December 2022 and this is going to be effective for financial years on or after 1st June 2023. The Corporate Tax is also referred to as “Business Profits Tax” or “Corporate Income Tax” in other jurisdictions.