Who is exempt from UAE’s upcoming corporate tax?
Government entities, investment funds and others will be exempt from the first-ever corporate tax that will soon take effect in the Emirates.
The United Arab Emirates’ Ministry of Finance released on Monday information on exemptions to its corporate tax. The list includes businesses working in natural resources and follows an announcement on tax relief for small businesses.
Background: The UAE announced last year its first-ever tax on business profits. The 9% tax on companies and freelancers earning more than 375,000 Emirati dirhams ($102,000) will take effect in June. Entities in the UAE previously did not need to pay taxes, instead paying business fees to the Emirati state.
The Emirates had several motivations for introducing the tax, including efforts to reduce dependence on energy for revenue and increase financial transparency.
Emirati authorities have been working throughout the year to ready the country for the tax implementation. In February, the Ministry of Finance held “Corporate Tax Public Awareness Sessions” throughout the country.
