TFS Gulf
  • All categories
    • inPractice
    • Entrepreneur Story
    • Finance Leaders
    • Videos
TheFinanceStory
No Result
View All Result
  • Login
  • Register
  TFS Gulf
  • All categories
    • inPractice
    • Entrepreneur Story
    • Finance Leaders
    • Videos
The finance story
No Result
View All Result
  • Login
  • Register
The Finance Story
No Result
View All Result

Why has Corporate Tax been introduced in UAE? Here’s what new opportunities it will bring compared to VAT

The introduction of Corporate Tax in the UAE, along with VAT, holds a great significance in the advancement of the country's tax landscape. Here is how they are creating opportunities.

The Finance Story by The Finance Story
Published date: 3rd July, 2023
Last edited date: 5th September, 2023
SHARE (0)
What opportunities will Corporate Tax bring in the UAE
Share on FacebookShare on Twitter

The UAE has recently introduced a 9% Corporate Tax, making it one of the last countries in the Gulf Cooperation Council (GCC) to introduce the said tax.

The Kingdom of Saudi Arabia (KSA) was the first GCC member to levy Corporate Tax, making it effective from 2004.

However, the UAE is not a new player in the tax field as Customs and Excise system was implemented in 2017, with Value Added Tax (VAT) getting launched the following year.

The implementation of these taxes is crucial for the growth of the UAE’s economy.

Let’s explore why UAE decided to levy a Corporate Tax, and what new opportunities it will create compared to VAT.

Why Corporate Tax was introduced in the UAE

The introduction of Corporate Tax in the UAE was driven by global developments aimed at addressing profit shifting and tax avoidance.

Initiatives like the Base Erosion and Profit Shifting (BEPS) framework played a crucial role in formulating measures for profit reallocation based on sales.

The objective was to establish a global minimum effective tax rate that would prevent governments from experiencing losses in tax revenues.

On December 9, 2022, the UAE issued the law for the taxation of corporations and businesses (CT law), marking the first large-scale introduction of Corporate Tax in the country.

This move sought to incorporate global best practices and minimize the compliance burden for UAE businesses.

With CT becoming effective from 1st June 2023, it supports the UAE’s strategic ambitions and incentivizes business establishment and expansion.

Furthermore, it solidifies the UAE’s position as an international business hub and global financial center.

Opportunities created in the UAE because of VAT

When a 5% Value Added Tax (VAT) was introduced in 2018, many businesses in the UAE faced challenges in sustaining their operations.

In the UAE, there are over a thousand consultancy firms, including audit firms, that operate to serve the needs of businesses.

These firms require subject matter experts who can effectively connect with clients and provide valuable insights and guidance.

This created multiple opportunities for Chartered Accountants who were well-versed in Indian GST or VAT, as the UAE counterpart is relatively simpler. The laws were crafted based on the Gulf Cooperation Council (GCC) framework.

Additionally, expat Chartered Accountants, who were looking to set up consultancy offices in the UAE, had the perfect window of opportunity.

The total revenue collected from 2018 to 2022 (AED 142 billion, which is equivalent to USD $39.4 billion) played a crucial role in supporting UAE government expenditures and financing various public services and infrastructure development projects.

How Corporate Tax will impact the UAE job market

This new Corporate Tax Law in the UAE imposes a 9% rate on taxable business profits exceeding AED 375,000.

Compared to VAT, Corporate Tax presents more complexities and requires specialized expertise in transfer pricing and taxation.

As a result, businesses would need to invest significantly, in building their capabilities in these areas.

Advisory role:

  • “Since Corporate Tax has just been introduced in the UAE, hiring for Advisory roles will be in full swing for the next two-three years.
  • Whereas opportunities for compliance and litigation will start increasing after the implementation phase is over,” says Nanjundaswamy T C, a seasoned tax expert who moved from a Big 4 in India to Baker Tilly Middle East.

Starting a firm in the UAE:

  • As of July 2022, the total number of registered businesses in the UAE is 665,246.
  • “Any CA who wants to set up a consultancy firm in UAE should gear up,” says CA James Mathew, Managing Partner at UHY James Chartered Accountants.

Outsourcing:

  • I have seen many outsourcing firms providing VAT return filing services to the UAE.
  • “In fact, outsourcing will increase with the arrival of Corporate Tax, but only after the implementation phase,” says Hany Elnaggar, Associate Partner at WTS Dhruva, a leading Tax Firm in the UAE.

Furthermore, the UAE’s extensive network of over 130 double-taxation agreements has the potential to significantly boost trade volume.

This, in turn, will attract businesses to the UAE, leading to increased economic activity, and the subsequent job growth in the tax domain.

Conclusion…

The UAE tax industry is expected to grow as businesses and individuals get used to the new tax system.

The introduction of these taxes will help in raising revenue, promote fairness between domestic and foreign businesses, and enhance the overall tax compliance environment.

Anyone who aims to build a tax career in the UAE should bring their technical knowledge of complex matters and an open mind.

This article features insights and perspectives of Nanjundaswamy T C, Head of Taxes – Baker Tilly Middle East, and Hany Elnaggar, Associate Partner at WTS Dhruva derived from The Finance Story LinkedIn live.

The Finance Story

The Finance Story

Recommended for you

UAE’s Private Sector now employs 152,000 Emiratis
Dubai

UAE’s Private Sector now employs 152,000 Emiratis

4th August, 2025 | 3 mins read
PwC Middle East gets a seat at PwC’s Global Board
Big 4

PwC Middle East gets a seat at PwC’s Global Board

4th August, 2025 | 3 mins read
UAE's influencer's now need a License to post
Dubai

UAE’s influencer’s now need a License for monetising their content

4th August, 2025 | 3 mins read
Ex-PwC Dubai Director quit to build GCC’s Fastest Growing Tax Firms
Dubai

Quit PwC Dubai to join boutique tax firm. Bet pays off – Dhruva winning in Middle East

30th July, 2025 | 9 mins read
Saudi's $500Bn ‘Line’ Project under review as costs surge
News

Saudi’s $500Bn Megacity Project under review: McKinsey in spotlight

22nd July, 2025 | 3 mins read
Grant Thornton Germany for sale... GT US vs UK in a Bidding War
Big 10

Grant Thornton Germany for sale… GT US vs UK in a Bidding War

12th July, 2025 | 3 mins read
Next Post
How to secure a job opportunity in the UK through LinkedIn

Brexit has created a shortage of talent in the UK. Here is how you can secure an opportunity through LinkedIn

Start conversation Cancel reply

Your email address will not be published. Required fields are marked *

Popular posts

  • KPMG Partner quits and goes Boutique with high end advisory firm: Now has 5+ offices & 75+ team

    KPMG Partner quits and goes Boutique with high end advisory firm: Now has 5+ offices & 75+ team

    0 shares
    Share 0 Tweet 0
  • Big 4 firms in India: Inside Deloitte, PwC, EY & KPMG career prospects, growth and salaries

    0 shares
    Share 0 Tweet 0
  • Designations in HDFC Bank: From Joining as an Assistant Manager to climbing to the rank of Managing Director.

    80 shares
    Share 0 Tweet 0
  • Big 4 India Partners jumping from one firm to another: High alert as Partner poaching surges

    0 shares
    Share 0 Tweet 0
  • CA Firms Kirtane & Pandit, Guru & Jana, SSKM unite to build India’s Next Big Global Consulting Firm

    0 shares
    Share 0 Tweet 0
  • Hierarchy level in ICICI Bank: Thinking of joining ICICI Bank? Here’s an overview of the employee grades.

    175 shares
    Share 0 Tweet 0
  • ICAI Under Fire: Women Removed from Front Row at CA Students’ Conference Following Guest’s Demand

    0 shares
    Share 0 Tweet 0
  • EY, PwC, Deloitte surpass 3,300 Partners. EY added 1000+ new Partners

    0 shares
    Share 0 Tweet 0
  • UK firm outsourced accounting work to India but quality dropped: Now established his own offshore unit

    0 shares
    Share 0 Tweet 0
  • Deloitte India offers ‘Golden Handshake’ to senior Partners aged 55 & above. Plans to elevate young partners.

    0 shares
    Share 0 Tweet 0
The Finance Story

The Finance Story empowers finance professionals—CFOs, consultants, accountants, tax experts, and bankers—to navigate critical market shifts, industry disruptions, and emerging technologies & trends.

How? We spotlight key opportunities in India and globally, equipping finance professionals with the insights and strategies to drive business growth, optimize decision-making, and position their companies at the forefront

Quick Links

  • Finance
  • Partners
  • Privacy and Policy
  • Terms of use

Follow us

  • /TheFinanceStory
  • @TheFinanceStory
  • /TheFinanceStory
  • @thefinancestory_com
  • TheFinanceStory

© 2022. The Finance Story. All Rights Reserved.

No Result
View All Result
  • TFS Gulf
  • Entrepreneur Story
  • Finance Leaders
  • Videos
  • Login
  • Sign Up

Welcome Back!

Sign In with Google
OR

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Sign Up with Google
OR

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
We use cookies to personalize your experience. By continuing to visit this website you agree to our use of cookies.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?
Book 1:1 call with industry expert