KHALEEJ TIMES, Saturday, May 27, 2023 | Thul-Qidah 7, 1444
UAE announces new corporate tax rules to support companies' transition once law takes effect in June
Emirates:
The UAE's Ministry of Finance (MoF) on Friday announced a new decision
specifying corporate tax rules that aim to ease companies' transition
period once the law comes into effect on June 1.
In an advisory, the authority said these 'transitional rules' introduce
"adjustments for the opening balance sheet" under the Corporate Tax Law. It also
provides "important clarifications" that will allow for businesses' smooth
transition before and after the law's implementation.
Under the new decision on Transitional Rules for Corporate Tax, firms can
"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".
The choice, however, would be permanent except in special circumatances, the
ministry said.
Among the assets and liabilities where these new rules apply are: Immovable
property, intangible assets, financial assets, and financial liabilities.
Flexibility
The decision grants further flexibility to the real estate sector, the MoF said.
" Companies with immovable property recorded on a historical cost bases, before
the corporate tax comes into effect, can select the basis of the relief, using
either: A time apportionment method or valuation method," it explained.