Overview of the United Arab Emirates’s Corporate Tax Law

In a recent important development on the international tax front, United Arab Emirates (“UAE”) has issued its Decree-Law introducing taxation of Corporations and Businesses on their income.

In this article the authors endeavour to make the readers aware of the salient features and provide an overview of the UAE’s new Corporate Tax (“CT”) law. It is expected that further information and guidance on the technical details and other specifics of the UAE’s CT Regime will be made available in due course by the Federal Tax Authority (“FTA”) and Ministry of Finance (“MoF”) of the UAE. Accordingly, the authors have not touched upon the areas which are yet to be clarified.

INTRODUCTION

The UAE has been one of the few countries in the world with no taxes on income for most of the taxpayers, with the exception of a few industries. However, keeping the changing international tax landscape of global minimum tax in mind, the UAE has sought to introduce income tax on Corporations and Businesses. The MoF of UAE had issued a Public Consultation Document 28th April, 2022 seeking comments by 19th May, 2022.

Following the comments received, the Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (“CT Law” or “CT Decree-Law”) was issued by the UAE