Rules for the implementation of tax residency in the UAE announced

The UAE Financial Comptroller has published a new ministerial decision that introduces changes to the UAE legislation regarding income reporting. The decision, known as Ministerial Decision No. 97 of 2023, was published on the official website of the UAE Ministry of Finance.

The ministerial decision introduces new rules for determining the profits of organizations registered in the UAE. According to the decision, entities must now include in their profits all income received in the UAE, as well as income received outside the UAE, if they are associated with a business conducted by an organization in the UAE.

The decision also contains a list of expenses that organizations can deduct from their profits. Deductible expenses include research and development, staff education and training, and charitable expenses.

This ministerial decision is introduced in accordance with Federal Law No. 47 of 2022, which establishes new rules regarding the taxation of corporate profits. This decision is expected to lead to more transparent and fair reporting on the profits of entities in the UAE.

The new rules will come into effect on January 1, 2024 and will apply to the fiscal year beginning on or after January 1, 2024. Entities registered in the UAE must take these changes into account when preparing their income statements.

You can read the document at the link: https://mof.gov.ae/wp-content/uploads/2023/05/Ministerial-Decision-No.-97-of-2023-for-the-Purposes-of-Federal -Decree-Law-No.-47-of-2022.pdf

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