The UAE has announced the Federal Decree-Law No. 47 of 2022 on taxation of corporations and businesses “Corporate Tax Law” effective for financial years starting on or after 1 June 2023.
Sharing his opinion on the development, Vikas Panchal, general manager – Middle East, Tally Solutions said: “This issuance is a significant milestone in the history of the country and a major boost for the national economy. The 0% threshold for taxable profits up to and including Dh 375,000 in recognition of the significant role that start-ups and small businesses play in the UAE’s economy, and the 9% standard rate ensures that the UAE’s Corporate Tax regime is amongst the most competitive in the world.
“This will further strengthen the country’ position as a global business and financial centre. Overall, the corporate tax announced today will be a guided approach for the UAE’s SME community, that will benefit in a higher business valuation, more investors, and increased opportunities.”
“While there are several apprehensions about the implementation of corporate tax, it is to be noted that most SMEs have adapted to digital transformation with the introduction of VAT a few years ago which will enable them towards a seamless transition to this new tax implementation,” he said.
“For a smooth transition to the corporate tax era, having a powerful integrated business management software should be the top priority for SMEs in the UAE. This can help generate quick business reports across accounting, inventory, and compliance along with easy management of daily financial transactions. Moreover, it is advisable to take guidance from accounting and tax experts to ensure 100% compliance.,” he said.
“Companies such as ours have an important role to play in helping businesses across the UAE with corporate tax both in terms of assisting them understand it and its implications as well as providing simple software which will make compliance easy. We will be conducting extensive campaigns in association with domain and subject matter experts to help businesses make a seamless transition to the corporate tax law,” he concluded.
The UAE has always been at the forefront of innovation and change and one such positive transformation has been the country’s alignment with global community for taxes. The company believes that the introduction of corporate tax is an advancement towards building a robust business model, that is not only SME investor-friendly but will augment the growth of the SMEs.