United Arab Emirates (‘UAE’), as a member of the Organisation for Economic Co-operation and Development (‘OECD’) introduced a federal Corporate Tax (‘CT’) regime as a stepping stone to the execution of its commitment to the global minimum effective tax concept proposed by Pillar II of the OECD Base Erosion and Profit Shifting project (‘OECD BEPS’)

The introduction of CT is also perceived as an important step in diversifying the UAE Government’s budget revenue away from revenues that are mainly generated from the hydrocarbon industry.

The UAE Ministry of Finance issued the Federal Law on the Taxation of Corporations and Businesses by enacting the Federal Decree Law No. 47 of 2022 (‘CT Law’)

The CT Law was announced on December 09, 2022 and comes into force with effect from the Financial Year (‘FY’) commencing on or after June 01,2023. The CT shall be levied on resident persons, certain non-resident persons and free zone persons under this law.