When will Corporate Tax in UAE be implemented?

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Tally Solutions | Updated on: January 16, 2023

Corporate tax is a direct tax levied on the net income or profit of corporations and other entities from their business. Applying corporate tax in UAE is considered to be a competitive advantage to attract foreign investments to UAE. Paying corporate taxes can be more beneficial for business owners than paying additional individual income tax.

According to the UAE Ministry of Finance announcement, Corporate Tax in UAE will apply to:

  • All businesses and individuals performing business activities under a commercial license in UAE
  • Free zone businesses in UAE
  • Foreign businesses and individuals only if they run a trade or business in UAE in an ongoing or regular manner
  • Banking operations
  • Businesses engaged in real estate management, construction, development, agency, and brokerage activities

What is Corporate Tax in UAE?

How is Corporate Tax in UAE Calculated?

Due date of corporate tax in UAE

In January 2022, the UAE Ministry of Finance announced that it would introduce federal Corporate tax on the net profits of businesses. The corporate will be implemented from 1stJuly,2023. However, depending upon the financial year followed by the business, the effective applicable date may change.

Federal Tax Authority (FTA) will be responsible for the administration, collection, and enforcement of corporate tax.

Effective date corporate tax applicability for business

The Corporate Tax will become effective in UAE for businesses' financial years starting on or after 1 June 2023.  Given that businesses follow different financial year start date, the authorities have announced the concept of the effective date of corporate tax applicability.

  • A business that has a financial year starting on 1 July 2023 and ending on 30 June 2024 will become subject to UAE Corporate Tax from 1 July 2023 (which is the beginning of the first financial year that starts on or after 1 June 2023)
  • A business that has a (calendar year) financial year starting on 1 January 2023 and ending on 31 December 2023 will become subject to UAE Corporate Tax from 1 January 2024 (which is the beginning of the first financial year that starts on or after 1 June 2023)

How can TallyPrime help?

Ready to transfer your business to the corporate tax era? TallyPrime is here to help!

TallyPrime is the perfect answer to your business needs for managing financial transactions, procedures, reports, and more.

We offer our business management software that can manage the growing needs of your business. It includes full support for UAE VAT, from generating tax invoices to filing accurate VAT returns and many other features such as:

  • Generate instant business reports related to accounting, inventory, and financial statements such as profit and loss accounts, balance sheets, etc. that help you calculate corporate tax.
  • Completing VAT returns with ease in high accuracy and consistency
  • Create VAT-compliant invoices, while managing different types of VAT supplies such as exports, imports, etc.
  • Manage your books of accounts with ease in high accuracy and consistency.
  • Complete flexibility to suit different purchase and sales processes.
  • Multiple Price Levels for products to create different price levels such as Wholesaler, Retailer, Customer, etc.

Book your free demo Now, and we are sure you'll be delighted to see how TallyPrime adapts to your business.

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Read more about Corporate Tax UAE

Corporate Tax in UAE, What is Corporate Tax in UAE, Corporate Tax Law, How is Corporate Tax in UAE Calculated, Corporate Tax Exemption, Corporate Tax Limit and Applicability in UAE, Reports and Accounts Books for UAE Corporate Tax, FAQs on Corporate Tax in UAE

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