Why Was Corporate Tax Introduced?
The UAE implemented corporate tax to:
Align with global tax standards such as the OECD’s Base Erosion and Profit Shifting (BEPS) framework.
Diversify government revenue away from oil and ensure long-term economic sustainability.
Enhance transparency and improve the UAE’s position in global financial markets.
Despite the introduction of corporate tax, the UAE continues to offer a competitive business environment with one of the lowest tax rates globally.
Who Does Corporate Tax Apply To?
Corporate tax applies to:
All UAE-incorporated businesses, including mainland and free zone companies (with some exceptions).
Foreign legal entities if they earn income from the UAE or have a permanent establishment here.
Natural persons (individuals) conducting business or commercial activity in the UAE above a certain threshold.
However, the following are not subject to corporate tax:
Salaried individuals and employees
Real estate investments made in a personal capacity (not as a licensed business)
Dividends and capital gains earned by individuals from personal investments
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