Federal Decree-Law No 47 of 2022 – Taxation of Corporations and Businesses

Explanatory commentary on the many aspects of the UAE Corporate Tax code that promote economic activity and lessen the burden of compliance on taxpayers are included in the Guide. On the website of the Ministry of Finance, copies of the Corporate Tax Law, its implementing judgements, and further information about Corporate Tax is available.

Some of the relevant Illustrations include:

  • The application of a 0% Corporate Tax rate for taxable income up to AED 375,000.
  • The application of a 0% Corporate Tax rate for qualifying Free Zone persons.
  • Providing financial and administrative relief to support start-ups and small businesses. Businesses qualifying for such relief will not pay any tax and avail of simplified filing requirements where their turnover is up to AED 3,000,000.
  • A 0% withholding tax on cross-border and domestic payments.
  • Exemptions from Corporate Tax for foreign branch profits, dividends and capital gains earned from domestic and foreign shareholdings where the relevant conditions are met.
  • Foreign tax credits for foreign sourced income that is not exempt to avoid double taxation.
  • Highlights targeted exemptions for certain entities which are subject to Emirate level corporate taxation or considered important to the social fabric of the UAE.
  • Transfer Pricing documentation requirements and thresholds to ensure a minimal compliance burden on small and medium enterprises.
  • The ability to utilize Tax Losses in future tax periods without a time limitation.
  • The ability to transfer Tax Losses between tax group companies, where the relevant conditions are met.
  • UAE groups can file and pay their Corporate Tax on a consolidated basis as a single taxable entity to ensure administrative efficiencies and simplicity.
  • Relief from Corporate Tax for intra-group transfers and business restructuring transactions, where the relevant conditions are met.
  • The ability for family foundations and trusts to be treated as tax transparent to prevent personal wealth and investment income from being subject to Corporate Tax.
  • The alignment of the calculation of taxable income to accounting profits, with limited adjustments to determine the Corporate Tax payable.

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