The United Arab Emirates Taxation of Corporations and Businesses

On December 9, 2022, the much awaited Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (the “CBT Law”) was published by the United Arab Emirates (the “UAE”) Ministry of Finance.

The background

A January 2022 announcement by the UAE Ministry of Finance, concerning the introduction of a federal corporate and business tax (“CBT”) on business profits, set out the contours of the new tax framework. Following release of a Public Consultation Document in April 2022, aimed at obtaining input from interested stakeholders, the finalized legislation has been published and will apply to tax periods commencing on or after June 1, 2023. Relevant and useful guidance can be found in recently updated FAQs and other guidance published by the UAE Ministry of Finance.

What are the objectives of the new tax legislation?

As declared by the Ministry of Finance, the CBT Law is an important milestone in building an integrated tax regime that supports the strategic objectives of the UAE and enhances its global economic competitiveness. The overall objective of this regulation is to meet international standards for tax transparency and prevent harmful tax practices. This alert memorandum provides a high-level overview of the CBT Law and its key provisions. It does not purport to be an exhaustive summary of the CBT Law.