Corporate Tax in UAE

Corporate Tax in UAE

Corporate Tax is a form of direct tax levied on the net income or profit of corporations and other businesses.

On 31 January 2022, the UAE Ministry of Finance announced the introduction of a federal corporate tax in the UAE that will be effective for financial years starting on or after 1 June 2023.

Generally, such taxes are computed on the accounting net profit/income of a business, after making adjustments for certain items which will be specified under the UAE Corporate Tax law.

Corporate Tax Rate in UAE will be applicable at the following rates:

UAE Ministry has announced that Corporate Tax shall be levied on taxable income/ profit at the following rate:

For example, if the Company earns a taxable profit of AED 400,000 in a FY, The Corporate Tax liability will be calculated as follows:

• Taxable income of AED 0 – AED 375,000 at 0% = AED 0 
• Portion of taxable income exceeding AED 375,000 (i.e. AED 400,000 – AED 375,000 = AED 25,000) at 9% = AED 2,250

Will any kind of business be subject to Corporate Tax in UAE?

The tax will be applicable in all businesses including the freezones except the activity for the extraction of natural resources. No corporate tax will apply on personal income from employment, real estate, and other investments, or on any other income earned which need not have a commercial license or permit to be undertaken in UAE.

Corporate Tax Implementation

In the increasingly complex areas of Corporate Tax reporting, tax authority compliance, and tax planning

Corporate Tax Compliance

Dynamic economic development, globalization, business pressures, and continuous legislation amendments/developments

Corporate Tax Advisory

Every stage in business development has its financial and fiscal side, often more complex than first thought.

Corporate Tax Training

Emirates Chartered Accountants Group has extensive training experience in every new Regulation