#UAE to launch first federal corporate tax on business profits from June 2023 | Reuters

UAE to launch first federal corporate tax on business profits from June 2023 | Reuters

The United Arab Emirates (UAE) on Monday said it would introduce a federal corporate tax on business profits for the first time starting from June 1, 2023, although it kept the rate low, at 9 percent, to maintain its attractiveness for businesses.

The Gulf Arab oil exporter, a magnet for the globe's ultra-rich, has long benefited from its tax-free status to carve out a role as an international commercial, energy and tourism hub.

Much of this tax-free regime, including no personal income tax, remains. But the Finance Ministry said it was launching corporate tax to align with international efforts to combat tax avoidance, as well as to address challenges arising from the digitalisation of the global economy.

The new tax will be levied on all corporations and commercial activities in the country, except for the "extraction of natural resources" which will remain subject to taxation at the emirate level.