Public Consultation Document Issued for UAE Corporate Tax
As announced on 31 January 2022, the United Arab Emirates (UAE) will introduce a federal Corporate Tax on business profits that will be effective for financial years starting on or after 1 June 2023. On 28 April 2022, the United Arab Emirates Ministry of Finance released a public consultation document on the planned introduction of corporate tax in the UAE.
The public consultation document contains the main features of the planned Corporate Tax regime as well as the principles that were applied in the design of the Corporate Tax regime. Interested parties are invited to comment on the elements covered in the document, as well as on areas that are not covered by the document.
The MOF invites comments on the public consultation document to be submitted as per the prescribed online submission by 19 May 2022. Where possible, interested parties are encouraged to explain comments with examples, data or other information to support views on the design and implementation of the UAE Corporate Tax regime.
Note: It should be noted that, the public consultation document contains information on the proposed UAE Corporate Tax regime, and is released for the purposes of obtaining input from stakeholders. The document does not reflect the final view of the UAE Government, and is not intended to comprehensively address all possible aspects of the proposed UAE Corporate Tax regime.
The public consultation document contains the main features of the planned Corporate Tax regime as well as the principles that were applied in the design of the Corporate Tax regime. Interested parties are invited to comment on the elements covered in the document, as well as on areas that are not covered by the document.
The MOF invites comments on the public consultation document to be submitted as per the prescribed online submission by 19 May 2022. Where possible, interested parties are encouraged to explain comments with examples, data or other information to support views on the design and implementation of the UAE Corporate Tax regime.
Note: It should be noted that, the public consultation document contains information on the proposed UAE Corporate Tax regime, and is released for the purposes of obtaining input from stakeholders. The document does not reflect the final view of the UAE Government, and is not intended to comprehensively address all possible aspects of the proposed UAE Corporate Tax regime.
Important Contents of the public consultation document in relation of the UAE Corporate Tax
- Definitions and descriptions on the Taxable persons like Natural persons, Legal person, Exempt persons and Government and Government owned entities
- Descriptions and scope of the Natural resources, Charities and Public Benefit Organizations and Investment funds
- It discusses in details the applicability and extent of the application of the corporates tax to the Free Zones entities based in UAE.
- It explains the Basis of taxation of the Residents and Non-residents.
- It provides the basis of the Calculation of taxable income, Basis of calculating taxable income, Treatment of unrealized gains and losses, Exempt income, Expense deduction limitations and treatment of the Losses.
- It also provides the details extent and scope of the applicability of the corporate tax provisions on the Group Taxation , Tax groups, Transfer of losses and availability of the Group relief.
- At it also provided the applicatibilty of the Transfer pricing in relation to the Related Parties, Connected Persons, Arm’s length principle and the Transfer pricing documentation requirements.
- How the Calculation of Corporate Tax liability would be made. What are the Applicable Corporate Tax rates, Withholding tax. and How the Calculation of Corporate Tax payable and Tax Credits should be carried out.
- International tax developments, Background, How the UAE would reflect its commitment to Pillar Two in its domestic Corporate Tax regime and Other international reporting obligations
- Details on the Administration of the UAE Corporate Tax, Registration and deregistration the UAE Corporate Tax, Filing, payment and refund and Assessment under the the UAE Corporate Tax,
- Other procedures in relation to the advance Clarifications , Documentation requirements and Transitional rules under the the UAE Corporate Tax,
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