Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses represents a pivotal milestone in the economic landscape. Aimed at bolstering the fiscal framework and stimulating sustainable growth. Introduced by the government with the purpose of redefining taxation policies. This decree-law seeks to create a more equitable and transparent tax system forTaxation of corporations and businesses operating within the country. With a comprehensive approach to tax regulation, it aims to foster a competitive business environment. Attract foreign investments, and drive domestic entrepreneurship while ensuring a stable revenue stream for public welfare and infrastructure development. We will delve into the key objectives and intentions of this significant legislative enactment. And its potential implications on the economic prosperity of the nation.

MASAR Chartered Accountants gives you all the information and Updates regarding UAE corporate tax. MASAR is FTA Approved Tax Agency in UAE.

The Minister of State for Financial Affairs has decided:

• Having reviewed the Constitution,
• Federal Law No. 1 of 1972 on the Competencies of Ministries and Powers of the Ministers, and its amendments,
• Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, and its amendments,
• Federal Decree-Law No. 28 of 2022 on Tax Procedures,
• Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses,

Article 1 – Definitions.

The Taxation of Corporation and Businesses represents Words and expressions in this Decision shall have the same meanings specified in the Federal Decree-Law No. 47 of 2022 referred to above (“Corporate Tax Law”). And the following words and expressions shall have the meanings assigned against each, unless the context otherwise requires:

·       Accounting Standards:

The accounting standards specified in a decision issued by the Minister for the purposes of the UAE Corporate Tax Law.

·       Ordinary Shares

The category of capital stock or equivalent ownership interest, gives its owner, on a share-by-share basis. Equal entitlement to voting rights, profits, and liquidation proceeds.

·       Preferred Shares

The category of capital stock or equity interest gives its owner priority entitlement to profits. And liquidation proceeds ahead of owners of Ordinary Shares.

·       Redeemable Shares:

The category of capital stock or equity interest which the juridical person issuing this instrument has agreed to redeem or buy back from the owner of this instrument at a future date or after a specific event. For a predetermined amount or with reference to a predetermined amount.

·       Membership and Partner Interests:

The equity interests owned by a member or a partner in the juridical person. Which entitles the member or the partner to a share of the profits. Determined with reference to the member’s or the partner’s capital contribution, which may be transferred to others.

·       Transferor

A Taxable Person transfers one or more assets or liabilities to another Taxable Person under Article (26) of the Corporate Tax Law.

·       Transferee:

A Taxable Person to which one or more assets or liabilities of the Transferor is transferred under Article (26) of the Corporate Tax Law.

·       Islamic Financial Instrument:

A financial instrument that is compliant with Sharia principles.

Article 2 – Ownership Interest:

1. For the purposes of Article (26) of the Corporate Tax Law. An ownership interest shall include, but not be limited to, holding any one or a combination of the following instruments:
   1. Ordinary Shares.Preferred Shares.Redeemable Shares.Membership and Partner Interests.
   1. Other types of securities, capital contributions, and rights that entitle the owner to receive profits and liquidation proceeds.
2. An ownership interest as referred to in Clause (1) of this Article shall only be treated. As such if it is classified as an equity interest under the Accounting Standards as applied by the Taxable Person holding the ownership interest.
3. For the purposes of Article (26) of the Corporate Tax Law. A Taxable Person shall be treated as holding an ownership interest. Where the ownership interest is controlled by the Taxable Person. And the Taxable Person has the right to the economic benefits produced by the ownership interest under the Accounting Standards applied by the Taxable Person.
4. An Islamic Financial Instrument, or combination of arrangements that form part of the same Islamic Financial Instrument. Shall be treated as an ownership interest for the purposes of Article (26) of the Corporate Tax Law. Where it is classified as an equity interest under the Accounting Standards applied by the Taxable Person.
5. The percentage of ownership held through ownership interests as specified. Under Clause (1) of this Article shall be determined with reference to the total paid-up capital of the Taxable Person. Or the total equity interest contributions made to the Taxable Person, as applicable.

Corporate tax Services in UAE:

In the dynamic business landscape of the UAE, the Taxation of Corporations and Businesses, corporate tax services are vital to ensure compliance and maximize financial efficiency. MASAR FTA Approved Tax agency serves as an invaluable ally, offering expert assistance tailored to meet businesses’ specific needs. With their official recognition by the Federal Tax Authority (FTA). MASAR is well-equip to provide comprehensive tax planning, filing, and compliance services. They possess in-depth knowledge of local tax regulations, enabling them to identify potential deductions, exemptions, and incentives, thus minimizing tax burdens for businesses. By entrusting their tax matters to MASAR, companies can streamline their operations. Optimize financial outcome. And rest assure that their tax affairs are meticulously managed in strict adherence to UAE tax laws.