Understanding Corporate Tax in the UAE: What You Need to Know

The New Tax Landscape

The UAE has introduced a federal Corporate Tax on business profits, effective for financial years starting on or after June 1, 2023. This move aligns the UAE with global tax standards while maintaining its competitive edge as a business destination.

Tax Rates

• 0%: On taxable income up to AED 375,000.
• 9%: On taxable income exceeding AED 375,000.

Who is Subject to Corporate Tax?

The tax applies to all businesses and individuals conducting business activities under a commercial license in the UAE. However, there are exemptions for government entities, extractive businesses, and certain qualifying public benefit entities.

Compliance and Filing

Businesses must register for Corporate Tax and file an annual return. Keeping accurate financial records is more important than ever to ensure compliance and avoid penalties.