New Tax Rules in UAE/ Dubai 2023: The United Arab Emirates (UAE) introduced the new issued rules on the taxation of corporations and business profession in the country.
The Federal Decree provided new rules for adjusted gross income or taxable income. The rules will come force from 1st June’2023.
Check these Points
1. Jobholders not covered under new taxation rules –
The new taxation rules only applies to business person. That means if you are having a Job in Dubai, the new rules will not affect you.
2. Exemption around Rs 84 Lakh on Business Income in Dubai / UAE
There will exemption available around Rs 84 lakh on business income in Dubai / UAE. Exemption may also be given to small business.
3. Qualifying income in QFZ to be taxed under New Corporate Tax Rule – In Dubai / UAE, a major part of the business is in Qualifying Free Zone hence, qualifying income will be liable to corporate Tax (CT).
4. These Indian Company will be considered an inhabitant of the Dubai/ UAE –
An India company is considered an inhabitant of the Dubai / UAE if it is productively regulated and controlled from the UAE. That is why, this aspects needs close evaluation to avoid double taxation.
5. Check the Tax Rate under the New UAE Corporate Tax (CT) –
UAE Corporate Tax (CT) provides for 9% corporate tax on taxable income surpassing AED 3,75,000 or Approx Rs 84 lakh from the financial year.
6. Only UAE inhabitants engaged in business activity to be taxed –
UAE- earning from sale of goods, services, interest, property, shares etc. could be taxed if the businessman certifies as a non- resident in Dubai / UAE.
7. Exemption for Business in QFZ –
The new rules offers an exemption for businesses directing in Qualifying Free Zone Person (‘QFZP’). Although, to get the full clarity one has to wait for some days. It also features transfer pricing provision in the matter of cross- border and domestic associated party transaction, appropriately setting up suitable transfer pricing policies and yearly documentation should be considered by businesses.
