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On Friday, the government of UAE released the corporate tax law, and the same is available on their official website. Considered one of the crucial milestones in the process of implementing the corporate tax in the UAE.
Under the new rule, businesses and corporations with taxable profits surpassing AED 375,000 ($102,000) will be required to pay a standard 9% on or after June 1, 2023, as previously announced at the start of this year.
Taxable profits below the threshold as mentioned above will be subject to a 0% corporate tax rate. As per the UAE Ministry of Finance, the corporate tax rule is expected to position the country as a leading global hub for business and investment. It will add to the nation's development and transformation objectives while ensuring tax transparency and preventing malpractices.
The Ministry of Finance UAE has said that the new tax will be applied for financial years beginning on or after June 1, 2023.
Takeaway and next steps for businesses:
With the corporate tax law already out, there is a lot to understand for businesses. Now, financial statements will become all the more crucial for businesses as the net profit on these statements becomes the crux to arrive at the corporate tax that a business is liable to pay.
With the corporate tax levied in UAE, businesses must ensure they have the right tools for a smooth transition. Amidst all these things, one of the top priorities is to have the right business management software that not only ensures compliance with corporate tax law but also helps manage your business efficiently.
TallyPrime is a business management that comes with a wide range of business modules to cater to the growing needs of your business. The software's ability to instantly generate accounting, inventory and financial statements like profit and loss account a/c, balance sheet, and so on is one of TallyPrime's powerful features that ensures seamless business operations.
Have you tried TallyPrime? Book a free demo, and we are sure you'll be delighted to see how TallyPrime adapts to your business.
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