The UAE issues its Corporate Income Tax law
- Published: 21 March 2023
- Law Firm: Bonelli Erede Lombardi Pappalardo
The UAE Federal Tax Authority has published Federal Law Decree No. 47 of 9 December 2022 on the Taxation of Corporations and Businesses (“CIT Law”), which sets out the legislative basis for the introduction of a UAE federal corporate income tax.
The long-awaited CIT Law will be effective for financial years starting on or after 1 June 2023 and confirms the main points in the FAQs on the Ministry of Finance’s website and the public consultation document of April 2022, including what rates and exemptions will apply and what constitutes a taxable person (natural/legal) for CIT purposes.
The CIT Law also explains how taxable income will be calculated, what rules govern the participation exemption, and how a tax group needs to calculate its taxable income.