The Ministry of Finance (MoF) in the UAE declared a new decision specifying corporate tax rules, which will aim to ease the transition period of the companies after the law is enforced on June 1.
In an advisory, the authority stated that these ‘transitional rules’ introduce ” adjustments for the opening balance sheet” under the Corporate Tax Law. It also offers ” important clarifications” that will allow the smooth evolution of the business before and after the law’s implementation.
As per the new Transitional Rules for Corporate Tax decision, firms can ” adjust their tax treatment of assets and liabilities based on specific rules and also should decide how to donate when they submit their first tax return.”
However, the ministry said the choice would be permanent except in exceptional circumstances.
Apart from the assets and liabilities, the new rules will apply to immovable property, intangible assets, financial assets, and financial liabilities.
Flexibility:
The MoF stated that the decision would grant further flexibility to the real estate sector.
It explained that ” Companies with immovable property recorded on a historical cost base, before the corporate tax comes into effect, can select the basis of the relief or using either, A time appointment method or valuation method.
