What is Corporate Tax

Corporate tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business.

— Corporate tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions

UAE Corporate Tax will apply to all UAE businesses, except for the extraction of natural resources, which will remain subject to Emirate level corporate taxation. Foreign entities and individuals will be subject to Corporate Tax only if they conduct a trade or business in the UAE in an ongoing or regular manner.

UAE Corporate Tax will apply equally to all categories of profits and other (net) income reported in the financial statements prepared in accordance with internationally acceptable accounting standards.

Effective Date
The Corporate Tax will be effective for financial years starting on or after 01 June 2023

Tax Rates
0% Tax rate for Taxable income up to AED 375,000 to support small businesses and start ups
9% Corporate Tax Rate for taxable income exceeding AED 375,000

KEY FEATURES

• Individuals will not be subject to corporate tax on income from employment, real estate, investment in shares or other personal income not related to UAE Trade or Business
• No Corporate Tax will apply on Foreign Investors who do not carry-on business in the UAE
• Corporate Tax will apply on the adjusted accounting net profit of the business
• Free Zone Businesses that meet all necessary requirements can continue to benefit from corporate tax incentives.
• The extraction of natural resources will remain subject to Emirates level corporate taxation
• No withholding tax will apply on domestic and cross border payments
• No corporate tax will apply on capital gains and dividends received by the UAE business from its qualifying shareholdings
• No Corporate tax will apply on qualifying intragroup transactions and restructuring
• Foreign Tax will be allowed to be credited against UAE Corporate tax payable
• Generous loss transfer and utilization rules will be available to businesses