DUBAI: The United Arab Emirates (UAE) will introduce a federal corporate tax starting from June 1, 2023. The country is planning to impose a nine percent corporate tax on business profits.

“With the introduction of corporate tax, the UAE reaffirms its commitment to meeting international standards for tax transparency and preventing harmful tax practices,” Younis Haji Al Khoori, undersecretary of the ministry of finance, said in a statement.

The new corporate tax will be applicable from the beginning of the next financial year. It will apply to those businesses with profits above 375000 dirhams; is not relevant for personal incomes. The UAE had earlier this year, switched Friday-Saturday weekends to Saturdays and Sundays to align closer with global markets.

Meanwhile, there are no plans to introduce personal income tax or capital gains tax from real estate or other investments, the ministry said. Even though the country is a major oil exporter, it is also a big player in business, trade, transport and tourism. The new move comes in the wake of the rising competition from neighbouring Saudi Arabia, the world’s biggest oil exporter. The country has also taken measures to diversify its economy and attract foreign businesses.