Khaleej Times, 13 February 2025: Sharjah has introduced a new law imposing a 20% corporate tax on companies involved in both extractive and non-extractive natural resource activities.

Extractive companies, which focus on the extraction of raw materials such as oil, metals, minerals, and aggregates, will be taxed based on their taxable base.

This base is determined by the total share of the company from the value of produced oil and gas, following specific agreements with the Sharjah Oil Department.

Additionally, royalties, bonuses, and annual rents for concession areas will be calculated according to these agreements.

Non-extractive companies, which handle the separation, treatment, refinement, processing, storing, transporting, marketing, or distribution of natural resources, will also face a 20% tax.

Their taxable base is calculated from net taxable profits, with adjustments for asset depreciation and tax losses.

Depreciation of non-current assets is set at 20% annually, and tax losses can be carried forward to future periods.

Compliance with this tax law is essential for renewing concession rights or commercial licenses in Sharjah.

Companies must maintain accurate records and supporting documents for seven years.

A financial penalty of 5% of the total due tax will be imposed for intentional tax evasion violations.

For more news and content, try Lexis Middle East. Click on lexis.ae/demo to begin your free trial of Lexis® Middle East platform.

You can also explore the legal landscape by subscribing to our Weekly Newsletter.

Want to learn more about Lexis® Middle East? Visit https://www.lexis.ae/lexis-middle-east-law/.