Basis of Taxation
[Based on the Public Consultation Document released by the Ministry of Finance, UAE on 28 April 2022.]
Calculation of Taxable Income
Basis of calculating taxable income
Taxable income will be determined based on the accounting net profit (or loss) as stated in the financial statements.
Basis of Preparation of Financial Statements
Financial statements for the UAE Corporate Tax are required to be prepared based on the accounting standards and principles accepted in the UAE [IFRS is commonly used in the UAE].
However, certain taxpayers - startups and small businesses shall be provided relief from IFRS and will be allowed alternative financial reporting standards
Period of Financial Statement
The financial accounting period shall be considered as the annual tax period. In case no financial accounting period is adopted by the taxable person, the Gregorian calendar year will be the default tax period.
