UAE announces new tax rules to transition in June 2023
The United Arab Emirates (UAE) has announced new business tax laws to facilitate the transfer of enterprises once the law takes effect in June
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On Friday, the Ministry of Finance (MoF) of the United Arab Emirates (UAE) released a new decision that specifies corporate tax laws. The goal of this decision is to make the transition time for firms easier once the legislation goes into effect on June 1.
The authority stated in an advisory that these 'transitional regulations' introduce "adjustments for the opening balance sheet" under the Corporate Tax Law. In addition to this, it includes "important clarifications" that will make it possible for enterprises to have a smooth transition both before to and during the introduction of the legislation.
As a result of the recent judgement about Transitional Rules for Corporate Tax, businesses now have the ability to "adjust their tax treatment of assets and liabilities based on specific rules and must decide how to do that when they submit their first tax return." [T]hey will be required to make this decision when they send in their first tax return.
The option, on the other hand, would be irreversible with the exception of some exceptional circumstances, according to the ministry.
These new laws apply to a variety of assets and liabilities, including financial assets and liabilities, intangible assets, immovable property, and financial assets and liabilities.
UAE announces new tax rules
According to the MoF, the decision will allow the real estate industry greater freedom moving forward.
Companies who have immovable property that is recorded on a historical cost basis have the option, prior to the implementation of the corporation tax, to choose the basis of the relief, which can be either a time apportionment approach or a valuation method. This is outlined in the document.