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February 16, 2023
Corporate Tax , Tax
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Ministry of Finance confirms the threshold of AED 375,000

Businesses are subject to UAE Corporate Tax beginning from the financial year starting on or after 01^st June 2023.

As per Article 3 of UAE Corporate Tax Law, the Corporate Tax would be imposed at 9% on an income exceeding a threshold to be specified by the Cabinet.

Cabinet Decision 116 of 2022, recently made available in English, now confirms that the tax-free threshold is AED 375,000. This is in line with the threshold stated in the Public Consultation Document released in April 2022.

What would this mean for the taxpayers?

Any taxpayer (not being a qualifying free zone person) would be taxable

On income upto AED 375,000 at a 0% tax rate
On income above AED 375,000 at a 9% tax rate

The above threshold will apply to the combined income of the taxpayer (which includes income from all businesses and business activities)

Definition of “Business”

An activity conducted regularly, on an ongoing and independent basis by any person and in any location, such as industrial, commercial, agricultural, vocational, professional, service or excavation activities, or any other activity related to the use of tangible or intangible properties.

Definition of “Business activity.”

Any transaction or activity, or series of transactions or series of activities conducted by a natural or juridical person in the course of a business.

How can we help?

Rethink, as an entity, provides tax advisory, optimization, registration, implementation, compliance, and training services in UAE.

We designed our Corporate Taxation services to suit High-growth firms and their specific business needs at each stage of Advisory, implementation, subsequent tax compliance, and management.

With our team of tax advisors, finance experts, and tax accountants, we can provide you with a bundle of services, ensuring the implementation is cost-effective for High-growth firms.

Who are we?

Re/think is a boutique accounting, audit, advisory, regulatory compliance, and tax advisory firm with offices in Dubai and Abu Dhabi (ADGM) focused on providing businesses of varying sizes with timely, proactive, and customized business solutions from start-up and early development to the latest stages of a business lifecycle.