Snapshot-

1)   Introduction

The Federal Tax Authority (“FTA”) of the UAE has issued several Cabinet and ministerial decisions following the publication of the UAE Corporate Tax (“CT”) Law. These decisions are aimed at providing further guidance and clarification with respect to certain provisions of the CT Law. In this issue, we have summarized the key decisions that are of more relevance to UAE businesses. 

2)   Decision No. 116 of 2022

Annual Taxable Income – 31 January 2023

• Basic exemption limit is AED 375,000.
• Income above AED 375,000 taxed at 9%.
  
  

3)   Decision No. 5 of 2023

Change in Tax Period – 28 April 2023

Application to the FTA within 6 months of the original tax period in case of:

• Liquidation.
• Aligning to the group companies.
• Valid commercial, legal and economic reason.
  
  

4)   Decision No. 82 of 2023

Audited Financial Statements – 28 April 2023

• A taxable person with revenue exceeding AED 50 Million.
• A qualifying free zone person.
  
  

5)   Decision No. 43 of 2023

Exception from Tax Registration – 10 April 2023

• A government/ government-controlled entity.
• Extractive/ non-extractive natural resource business.
• Non-resident having only UAE sourced income without a permanent establishment.
  
  

6)   Decision No. 73 of 2023

Small Business Relief – 06 April 2023

• A taxable person with revenue of AED 3 million or below.
• No relief to multi-national entities and qualifying freezone persons.
• GAAR for artificial revenue separation.

7)   How can Crowe help?

• Analyzing the impact of Cabinet decisions and helping clients navigate any changes that may affect their business planning, including entity formation, financial planning, and business structure.
• Assessing the feasibility of leveraging on any available opportunities to optimize cost and minimize administrative burdens for tax compliance in response to the latest published Cabinet decisions.