New Excise Tax Policies in UAE, 2023: Everything You Need to Know

The Ministry of Finance declared a new UAE tax policy that is going to be enforced on January 1 2024. Get complete details.
  
Abu Dhabi, UAE – On 17 May 2023, the Ministry of Finance has recently released a new notification by announcing the new Corporate Tax Law under Cabinet Decision No. (49). The declaration addressed the new Law amendments, which will be enforced on resident and non-resident individuals involved in business or business activities. With this news, most Corporate Tax Consultants in Dubai, UAE, favored the UAE government and supported the decision. Meanwhile, a few Dubai Tax Consultants oppose the favor, in such chaos, you need to understand the new UAE tax policy and how it is going to be beneficial for you. So, stay tuned!

Introduction to UAE Tax Rule Change

As per the newly issued Cabinet Decision No (49) of 2023, from now onwards, every resident and non-resident individual undertaking a business or business activity will be under taxation. If you own up a business, your income derived from business or business activities is now liable to come under the Corporate Tax Law. Furthermore, the decision also states that the individual's personal income, such as investments, earnings from employment, and real estate without licensing requirements, will not be subject to Corporate Tax.

Understand New TAX Laws by Top Corporate Tax Consultants in Dubai, UAE

Now, the question arises of how the new UAE Tax Law would benefit the residents. Well, the Ministry of Finance has mentioned the decision:
  • Supports channelize the growth of small-scale businesses
  • Helps to avoid counting the non-business income of individuals under the new Corporate Tax Law
  •  Reduced the risk of double taxation
  • Improved overall access to finance
  • Offers Clarity about Corporate Tax and its laws
  • Increased compliance with new taxation policies and laws

Well, these are a few key benefits that every individual will get after the amendment of the UAE Tax Rule Change, which will come into effect on January 1, 2024.
 
Also Read: Salient Features of Corporate Tax in UAE

Other Factors Need to Be Considered

The primary objective to stand with this decision is to offer a sense of clarity about the Corporate Tax regime for every individual or natural person. The basic idea is only to include income from business or business-related activities for taxation.

Other than this, the decision specifies only includes the following categories under the New Excise Corporate Tax Policies in UAE:
  • Trading in goods or services
  • Leasing of property
  • Provision of professional services
  • Holding of shares or other interests in a company
  • Any other business or business activity that is not specifically excluded from the scope of Corporate Tax

Furthermore, the government also clarifies not to include the following types of income in Corporate Tax, such as:
  • Your monthly Wages or salaries (for employees)
  • Any kind of personal investment (such as mutual funds, policies)
  • Your generated income from real estate (without any licensing requirements)
  • Income from pensions (any) or social security benefits

Note – Per the new guidelines, individuals involved in any business must register for the Corporate Tax only if their combined yearly calendar exceeds AED 1 million. The main idea for introducing this threshold is to reduce any administrative burden for the operations of smaller-scale businesses.

Does This Decision Affect Anyone?

As per the experts of the top Corporate Tax Consultants in Dubai, UAE, the verdict taken by the government is a positive step that will help maintain a combative tax environment for investors and businesses. It also helps individuals to save up their taxes derived from their income, such as their monthly earnings from employment and investments.
 
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