The UAE has brought a significant change in the country’s taxation - the new federal corporate tax. Coming into effect June 1, 2023, onwards, this move is lauded by various experts for enhancing the country’s revenue system, which is expected to assist in the development of the country.

While the new corporate tax is a landmark change in itself, it has been accompanied by another big development in the form of AꞮ corporate tax assistant, the first such in the world. Continuing AꞮ’s incredible growth and penetration in different fields, this tax assistant is expected to revolutionise and greatly simplify corporate tax in the UAE.

Let’s take a closer look at both these developments.

What’s There in the Corporate Tax?

Officially announced in January 2023 by the UAE Govt, the corporate tax is a direct tax that would be applicable to businesses and corporations meeting certain conditions. Individuals and businesses with taxable profits would need to register with the UAE Federal Tax Authority (FTA) for the same.

• The tax would be levied only on businesses whose annual turnover is more than AED 1 million.
• The tax would be calculated on the profits above AED 375,000 - those below the limit would be tax-free.

It must be noted that this would apply to freelancers with profits as per the specified limit as well.

Profits above AED 375,000 would be calculated at the rate of 9%. This is considerably lower than the rate of 23%, the average corporate tax rate globally.

Another key point here is that the corporate tax would strictly apply to corporate income. For personal salaries, earnings from real estate, investments (stocks, bonds, and more), no corporate tax would be applicable.

The exempted categories further include government and government-controlled entities, businesses in the domain of natural resources (both non-extractive and extractive), social security funds, and more.

TaxGPT - AꞮ’s Step into UAE Corporate Tax

While ChatGPT and the like have taken the world by storm, TaxGPT is also being hailed as a game changer in taxation. Launched by Virtuzone, an eminent company formation specialist in the UAE, it is the first AI-based corporate tax assistant in the world.

Developed on the OpenAI’s model of GPT-4, short for Generative Pre-trained Transformer 4, TaxGPT is primarily meant to assist businesses with the new procedures and rules regarding corporate tax laws.

Using this platform is quite easy. Similar to other popular AI platforms, you can ask questions related to corporate tax and quickly get comprehensive answers. The solutions would be based on the publications of the UAE’s Federal Tax Authority (FTA) and Ministry of Finance.

What’s remarkable about this platform is its capability to learn over time. As a result, you can get the most relevant and latest answers to your corporate tax queries as the mentioned government bodies keep announcing updates.

“We understand that the new tax regime can seem like uncharted territory for many businesses, and that is why we are here to provide expert guidance and assistance”, says John Casey, General Manager (Accounting and Tax), Virtuzone.

TaxGPT, coming just in time as the new corporate law comes into effect in the UAE, has been cited as highly beneficial for businesses and freelancers. By providing solutions to queries and issues regarding corporate tax, it can help organisations file taxes on time without any delays or hassles.

Written By: Abhimanyu Chaturvedi