Farahat & Co - How to calculate corporate tax rate in UAE

1. Farahat &Co HOW TO CALCULATE COPORATE TAX RATE INUAE

2. Farahat &Co The UAE Ministry of Finance (MoF) stated on January 31, 2022, that the Federal Corporate Tax in UAE (CT) on company profits/income will be implemented for fiscal years beginning on or after June 1,2023. The UAE Corporate Tax regime was created to combine best practices throughout the world while also reducing the cost of compliance forfirms. Corporate tax will be imposed on the net earnings of UAE businesses as recorded in their financial reports, which will be prepared in compliance withglobal accounting rules, subject to any changes necessary by Corporate TaxRegulations. The UAE has publicly declared the new system’s major design principles and policies, even though the CorporaLEteARTNaxMOLaRwE has not yet beenapproved.

3. Farahat &Co CORPORATE TAX APLICABLEDATE Effective Date : June 1,2023. The UAE Corporate Tax regime will be implemented for fiscal years commencing on or after June 1,2023. A business having a financial year that begins on July 1, 2023, and ends on June 30, 2024, will be subject to Corporate Tax (CT )beginning July 1,2023 A company with a financial year that begins on January 1, 2023 and ends on December 31, 2023 will be subject to the UAE Corporate Tax (CT ) beginning on January 1,2024.

4. Farahat &Co HOW DO YOU DETERMINE THE BUSINESS PROFIT SUBJECT TO UAE CORPORATETAX? Except for commercial activities such as the extraction of natural resources, which will be taxed inaccordance with emirate-specific levies. All business and commercial activities in the UAE will be subject to the UAE corporation tax. The company tax will be paid on taxable income, which is defined by the UAE corporate tax legislation as a business’s accounting net profit after specific adjustments (deductibles).The corporation tax will be levied on ‘taxable income,’ defined as a business’s accounting net profit after certain adjustments (deductibles), as defined by the UAE corporate tax law. Accounting net profit is the amount stated in financial statements produced according to International AccountingStandards The UAE corporate tax policy applies to commercial operations, which include all forms of commercial activity conducted in the UAE under a trade license or authorization, as well as income obtained under freelancer licenses (where taxable income exceeds AED375,000).

5. Farahat &Co THE TAXRATE The UAE Corporate Tax will be applied on taxable income, which is defined by the UAE Corporate Taxlaw as a company’s accounting net profits after specificadjustments. Accounting net profit refers to the amount stated in financial statements produced according to International AccountingStandards. The following will be the progressive taxrate: 0% for taxable income up to AED375,000; 9% for taxable income beyond AED 375,000;and A separate tax rate for significant multinationals that fulfil specified conditions laid forth in the OECD’s Base Erosion and Profit Shifting project’s ‘PillarTwo.’ Foreign Corporate Tax levied on taxable revenue in the UAE will be credited against the UAE Corporate Tax obligation. Entities subject to the UAE Corporate Tax will be entitled to carry forward excess losses and use losses earned before the Corporate Tax tookeffect.

6. Farahat &Co CONTACTUS Phone : +WhatsApp Only: +971 526922588 WhatsApp & Phone: +971 554828368 Landline: +971 4 2500251 (9AM - 7PM GMT+4- Monday toFriday) For Consultation: consultant@farahatco.com For Sales Enquiries: sales@farahatco.com Website :https://farahatco.com/