Who is Exempt from the New UAE Taxes Coming in 2023?

The new UAE tax announcement from the Ministry of Finance has made many people question how profitable businesses will still be. As you may have already read, there are some good news in store for certain groups. Let’s find out more.

If you want to find out more about the new corporate income tax (CIT) legislation, please feel free to read the rest of the articles on this series on our website (link to series page or blog page). You will learn when the legislation comes into play, why the UAE introduced it , and what changes you can expect. In this article, we will break down who is exempt from the new UAE taxes coming in 2023.

Small businesses

The UAE announced that all UAE businesses that operate onshore will be subject to paying 9% corporate income tax (CIT). The first piece of good news is that this will only apply to larger businesses. The legislation will protect small businesses that make an annual profit of less than 375 000AED ($102 000)

Free zone companies

Lucky for many expats who moved to the vibrant cities like Dubai and Abu Dhabi to escape taxes, the benefits may still hold. If you are one of the many expats who registered their company in a free zone, then you will be exempt from paying taxes!

The idea that free zones are exempt from taxes in the UAE is not new. The 5% VAT rule that came into play in 2018 also exempted free zones from the tax. Remember, however, that this only applies as long as you are not conducting business with UAE clients onshore.

Natural resource extraction

According to the latest news, another sector that will be exempt from the new tax laws will be extraction of natural resources. However, this is not for the same reason as the free zone companies.

Oil and other natural resource companies will be exempt from this tax because they are already subject to Emirate level corporate taxation.  This sector has been paying taxes up to 55% for years and will continue to adhere to that rate instead of this new rate.

In conclusion, many entrepreneurs and professionals who came to the UAE to escape corporate taxes will continue to reap this benefit in the Emirates. In the case that the new taxes do apply to you, and you want to get ahead of the game, make sure you prepare yourself as best as you can.

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