Business Restructuring and its Implication in the UAE Corporate Tax Regime

CA Shivam Sharma – [2023] 150 taxmann.com 165 (Article)

The UAE Corporate tax was introduced last year, i.e., on 9th December 2022 by Federal Decree Law no. 47 of 2022 through which a corporate tax regime is introduced in UAE, which previously was a tax haven for businesses as there was a “Nil” tax on the profits and gains earned in UAE except for the tax on profits earned from oil exploration.

The UAE Corporate tax will be implemented from the fiscal year commencing on 1st June 2023, i.e., Fiscal Year 1st Jan 2023 to 31st December 2023. Persons having taxable income of more than AED 3,75,000.00 will have to pay tax @ 9% and 0% taxation for persons whose taxable income is less than or equal to AED 3,75,000.00. There are some reliefs and exemptions given in UAE Corporate tax regime, like a relief to small businesses whose total revenue in the previous fiscal year and the current fiscal year doesn’t exceed AED 3 million.

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