UAE Ministerial Decision No. 134 of 2023 on General Rules for Determining Taxable Income

The Ministry of Finance (MoF) has issued Ministerial Decision No. 134 of 2023 on General Rules for determining Taxable Income for UAE businesses. The decision outlines the necessary modifications for calculating taxable income, which involve both realized and unrealized gains or losses that are reported in the Financial Statements.

Some of the key highlights of the decision:

1. The General Rules for Determining Taxable Income streamline the process of calculating taxable income for UAE businesses. The decision sets out adjustments needed for the taxable income calculation, including the recognition of realized and unrealized gains or losses reported in the Financial Statements. It also clarifies the conditions for applying the realization basis and provides guidelines for adjusting changes in values on assets and liabilities derived from transfers involving Related Parties, Qualifying Groups or Business Restructuring Relief.
2. Businesses preparing Financial Statements on an Accrual Basis of Accounting can choose to recognize gains and losses on a realization basis for certain assets and liabilities. This election must be made during the first Tax Period and is irrevocable, except under exceptional circumstances approved by the Federal Tax Authority.