UAE Will No Longer Be Tax-Free in 8 Days

The United Arab Emirates (UAE) is set to undergo a major change as it transitions from being tax-free to implementing a 9% corporate tax. The decision by the Federal Tax Authority (FTA) will take effect on 1 June 2023. UAE employees who receive a single income stream through salary payments need not worry, as their earnings will remain exempt from income tax. Registration for corporate tax started on 15 May. According to FTA, public joint stock companies and private companies can register via the EmaraTax platform, while registration for the free zone and other companies will open later. The authority also remarked that early registration will allow companies to properly follow legal requirements. Severe financial penalties will be imposed on failing to register for corporate tax or submitting accounts. Therefore, it is advised not to postpone these obligations. Last month, the Ministry of Finance (MoF) released a list of businesses exempt from registering for corporate tax under the Taxation of Corporations and Businesses. The list included government organizations, government-controlled entities, and extractive/non-extractive natural resource businesses that meet the criteria outlined in the corporate tax law. Individuals not residing in UAE and not having a permanent organization there are also not required to register for corporate tax if their only source of income was in UAE.