[Based on the Public Consultation Document released by the Ministry of Finance, UAE on 28 April 2022.]
The proposed Corporate Tax rates and applicable thresholds remain the same as communicated earlier in the year. The Corporate Tax rates are as below:
| Taxable Income | Rate of Tax |
|---|---|
| Taxable income up to AED 375,000 | 0% |
| Taxable income above AED 375,000 | Taxable income above AED 375,000 9% (on a portion of taxable income exceeding AED 375,000) |
| For large Multinationals (having consolidated business revenues in excess of EUR 750 M) | A different Tax Rate |
| Taxpayer Name: xxxxxxxxxxxxxxxxxx | ||
| Tax period: xxxxxxxxxxxxxxxxxx | ||
| Sr | Particulars | Amount in AED |
|---|---|---|
| 1 | Profit/Loss as per financial statement (A) XXXX | XXXX |
| 2.a | Disallowance for expenses (expenses incurred to generate income that is not subject to tax) | XX |
| 2.b | Interest expense disallowed (more than the capping rule (30% of EBITDA as per CT provisions)) | XX |
| 2.c | Related party interest expense without valid commercial reason | XX |
| 2.d | Related party payment made to freezone person who is taxed at 0% | XX |
| 2.e | Disallowance for entertainment expenses (50% of total) | XX |
| 2.f | Any expenses such as administrative penalties, recoverable VAT | XX |
| Subtotal of items from 2.a to 2.f (B) | XXX | |
| C = A+B | XXX | |
| Less: | ||
| 3.a | Income from foreign subsidiary operations | XX |
| 3.b | Income from foreign branch operations (if claimed exempt) | XX |
| 3.c | Dividend income from domestic companies/freezone person | XX |
| 3.d | Dividend from foreign companies (eligible participation exemption) | XX |
| 3.e | Capital gain on sale of shares (eligible participation exemption) | XX |
| Subtotal of items from 3. a to 3. e (D) | XXX | |
| Gross Taxable income E= C-D | XXXX | |
| Less: Brought forward losses (F) | XX | |
| Total Taxable Income for the tax year (G= E-F) | XXXX | |
| Tax payable | ||
| Up to AED 375,000 | 0 | |
| 9% of (G – AED 375,000) | XX | |
| Less: Foreign tax credit | XX | |
| Net Tax Payable | XX | |
Note: Unrealised Gain / Loss to be considered
Relief for startups and small businesses in the form of simplified financial and tax reporting obligations has been proposed
The exact procedure to be followed by the small business as regards accounting of income and filing of a corporate tax return shall be included in the final Tax Procedures Law.
