Launch of Corporate and Business Tax Amendments Today
AlEtihad (nprofile…yefn)
The UAE Ministry of Finance has introduced new amendments to some provisions of Federal Decree-Law No. (47) of 2022 regarding corporate and business taxation, which will come into effect as of today (Wednesday), aiming to enhance the business environment in the UAE and achieve more alignment with global tax transparency and fairness standards. The amendments include the introduction of a minimum tax rate of 15% on the taxable income of large multinational companies operating in the UAE, which will be effective starting from the financial years beginning on or after January 1, 2025. This move aims to achieve global tax fairness by imposing a minimum effective tax rate of 15% on the profits of large multinational companies operating in all countries where they operate. The minimum tax rate will apply to multinational companies that have a global turnover of €750 million or more in at least two of the four preceding financial years. Additionally, the UAE Ministry of Finance has announced that it is considering introducing a tax incentive for high-value employment activities, which will come into effect as of January 1, 2025. This incentive will be in the form of a percentage of eligible employee costs for high-value jobs, including senior executives and key personnel who contribute significantly to the national economy. The UAE Ministry of Finance has also announced that it is studying the introduction of this tax incentive to encourage companies to engage in activities that generate significant economic benefits, stimulate innovation, and enhance the competitiveness of the UAE. The tax authority has also issued Decision No. (301) of 2024 regarding the tax group, which will apply to tax periods starting on or after January 1, 2025. This decision provides administrative and clarifying measures for businesses and companies that form a tax group. The amended provisions aim to simplify the requirements imposed on foreign persons who are considered to be tax residents in the UAE, as well as companies established in the UAE, and those that are effectively managed and controlled outside the UAE. The decision also clarifies the cases where a tax group is required to calculate the taxable income attributable to one of its members, in line with the principle of 'arm's length'. Furthermore, the decision allows tax groups that have incurred tax losses before forming a group to choose to waive these losses, which will give companies more flexibility and reduce the burden of tax compliance. The UAE Ministry of Finance has also issued Decision No. (302) of 2024 regarding the exemption of permanent establishments and branches of foreign companies, which will apply to tax periods starting on or after January 1, 2025. This decision provides clarifying measures and administrative facilitations for businesses that benefit from the exemption of permanent establishments and branches of foreign companies. The decision ensures that there will be no double taxation on income related to the transfer of ownership shares under the provisions of the group relief or business restructuring facilitations, even if these facilitations are revoked for non-compliance. The decision also provides for the application of the assets test for the purpose of exemption, which will only apply if the participation is a related party to the taxpayer. Moreover, the decision clarifies the procedures to be followed regarding tax losses related to the liquidation that is borne by the participation. According to the decision, permanent establishments and branches of foreign companies that transfer their assets and liabilities to companies can benefit from the exemption, provided that the participation's profits cover the total tax losses of the permanent establishment in full. Yousef Al Serkal, Undersecretary of the Ministry of Finance, emphasized that these new amendments reflect the UAE's commitment to enhancing a dynamic and attractive business environment, where compliance is simplified and growth opportunities are increased, which will further enhance the UAE's reputation as a global leader in business and investment.
https://www.aletihad.ae/news/%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF%D9%8A/4540888/%D8%A8%D8%AF%D8%A1-%D8%AA%D8%B7%D8%A8%D9%8A%D9%82-%D8%AA%D8%B9%D8%AF%D9%8A%D9%84%D8%A7%D8%AA-%D8%B6%D8%B1%D9%8A%D8%A8%D8%A9-%D8%A7%D9%84%D8%B4%D8%B1%D9%83%D8%A7%D8%AA-%D9%88%D8%A7%D9%84%D8%A3%D8%B9%D9%85%D8%A7%D9%84-%D8%A7%D9%84%D9%8A%D9%88%D9%85
The UAE Ministry of Finance has introduced new amendments to some provisions of Federal Decree-Law No. (47) of 2022 regarding corporate and business taxation, which will come into effect as of today (Wednesday), aiming to enhance the business environment in the UAE and achieve more alignment with global tax transparency and fairness standards. The amendments include the introduction of a minimum tax rate of 15% on the taxable income of large multinational companies operating in the UAE, which will be effective starting from the financial years beginning on or after January 1, 2025. This move aims to achieve global tax fairness by imposing a minimum effective tax rate of 15% on the profits of large multinational companies operating in all countries where they operate. The minimum tax rate will apply to multinational companies that have a global turnover of €750 million or more in at least two of the four preceding financial years. Additionally, the UAE Ministry of Finance has announced that it is considering introducing a tax incentive for high-value employment activities, which will come into effect as of January 1, 2025. This incentive will be in the form of a percentage of eligible employee costs for high-value jobs, including senior executives and key personnel who contribute significantly to the national economy. The UAE Ministry of Finance has also announced that it is studying the introduction of this tax incentive to encourage companies to engage in activities that generate significant economic benefits, stimulate innovation, and enhance the competitiveness of the UAE. The tax authority has also issued Decision No. (301) of 2024 regarding the tax group, which will apply to tax periods starting on or after January 1, 2025. This decision provides administrative and clarifying measures for businesses and companies that form a tax group. The amended provisions aim to simplify the requirements imposed on foreign persons who are considered to be tax residents in the UAE, as well as companies established in the UAE, and those that are effectively managed and controlled outside the UAE. The decision also clarifies the cases where a tax group is required to calculate the taxable income attributable to one of its members, in line with the principle of 'arm's length'. Furthermore, the decision allows tax groups that have incurred tax losses before forming a group to choose to waive these losses, which will give companies more flexibility and reduce the burden of tax compliance. The UAE Ministry of Finance has also issued Decision No. (302) of 2024 regarding the exemption of permanent establishments and branches of foreign companies, which will apply to tax periods starting on or after January 1, 2025. This decision provides clarifying measures and administrative facilitations for businesses that benefit from the exemption of permanent establishments and branches of foreign companies. The decision ensures that there will be no double taxation on income related to the transfer of ownership shares under the provisions of the group relief or business restructuring facilitations, even if these facilitations are revoked for non-compliance. The decision also provides for the application of the assets test for the purpose of exemption, which will only apply if the participation is a related party to the taxpayer. Moreover, the decision clarifies the procedures to be followed regarding tax losses related to the liquidation that is borne by the participation. According to the decision, permanent establishments and branches of foreign companies that transfer their assets and liabilities to companies can benefit from the exemption, provided that the participation's profits cover the total tax losses of the permanent establishment in full. Yousef Al Serkal, Undersecretary of the Ministry of Finance, emphasized that these new amendments reflect the UAE's commitment to enhancing a dynamic and attractive business environment, where compliance is simplified and growth opportunities are increased, which will further enhance the UAE's reputation as a global leader in business and investment.
https://www.aletihad.ae/news/%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF%D9%8A/4540888/%D8%A8%D8%AF%D8%A1-%D8%AA%D8%B7%D8%A8%D9%8A%D9%82-%D8%AA%D8%B9%D8%AF%D9%8A%D9%84%D8%A7%D8%AA-%D8%B6%D8%B1%D9%8A%D8%A8%D8%A9-%D8%A7%D9%84%D8%B4%D8%B1%D9%83%D8%A7%D8%AA-%D9%88%D8%A7%D9%84%D8%A3%D8%B9%D9%85%D8%A7%D9%84-%D8%A7%D9%84%D9%8A%D9%88%D9%85