Income Tax in UAE? Here’s what the government said

UAE has introduced a federal corporate tax at a standard statutory rate of 9 percent starting from this fiscal year beginning June 1.

Abu Dhabi: The UAE introduced a federal corporate tax at a standard statutory rate of 9 percent starting from this fiscal year, beginning on or after June 1.

The introduction of the tax stirred questions over taxes on the personal income of individuals.

In response to a question on the sidelines of the press conference to announce new decisions over corporate tax for free zone enterprises, the undersecretary of the ministry of finance, Haji Al Khouri, stated that the UAE has no plans to introduce taxes on the personal income of workers in the public and private sectors.

MS Education Academy

UAE corporate tax

The UAE has introduced a federal corporate tax at a standard statutory rate of 9 percent starting from this fiscal year beginning on or after June 1.

In May, the UAE ministry of finance said that business owners in the country will be subject to corporate tax only if their turnover in a calendar year exceeds Dirhams one million.

It also confirmed that personal income, particularly from employment, investments and real estate (without licensing requirements) is not subject to corporate tax.

For example, if a UAE resident operates an online business and the combined annual turnover of the business exceeds one million dirhams, under the new decision, that income will be subject to corporate tax.

However, if the resident also earns income from a rental property and personal investments, these sources of income will not be subject to the tax as they fall under the out-of-scope categories, the ministry said.

Back to top button