Corporate Tax in the UAE: Everything You Need to Know

The UAE introduced Corporate Tax (CT) starting from June 2023. It is a direct tax on the net income or profit of companies and businesses. The law is set out in Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, as amended by Federal Decree-Law No. 60 of 2023.

1. Why Corporate Tax Was Introduced

Corporate Tax is part of the UAE’s effort to strengthen its position as a global business hub. The law is built on international best practices and aims to:

• Support the UAE’s economic growth and diversification
• Ensure transparency and fairness in taxation
• Help businesses operate under a clear and competitive tax framework
• Align with global standards to prevent harmful tax practices

2. When Corporate Tax Applies

Businesses will be subject to Corporate Tax from the start of their first financial year beginning on or after 1 June 2023.

Example:

If your company’s financial year starts on 1 January 2024, Corporate Tax applies from that date.

3. Who Must Pay Corporate Tax

Corporate Tax applies to:

• Companies and legal entities incorporated or managed in the UAE
• Individuals (natural persons) conducting business or professional activities under a commercial licence
• Free zone companies, provided they follow FTA rules and do not conduct business with mainland UAE
• Foreign companies that have a permanent establishment in the UAE
• Banks and financial institutions
• Businesses in real estate, including management, construction, development, and brokerage

4. Who Is Exempt from Corporate Tax

Some entities are fully or conditionally exempt because of their social or economic importance. These include:

• Government entities and government-controlled companies listed in Cabinet Decisions
• Businesses engaged in natural resource extraction (subject to Emirate-level taxation)
• Public benefit organisations approved by the Ministry of Finance
• Pension and social security funds
• Qualifying investment funds
• Wholly-owned UAE subsidiaries of exempt entities

Additionally, Corporate Tax does not apply to:

• Salaries and employment income of individuals
• Interest from personal bank accounts or savings schemes
• Income earned by foreign investors from dividends, capital gains, or royalties
• Real estate investments owned in a personal capacity
• Income from shares and securities owned personally

5. How Corporate Tax Is Calculated

Corporate Tax is based on the taxable income of a business during a financial year (tax period).

The calculation starts with the company’s net accounting profit, and certain adjustments are made for:

• Income exempt from tax
• Expenses that are not fully deductible

The tax is self-assessed, meaning businesses calculate and file their own returns with the Federal Tax Authority (FTA).

6. Tax Rates

According to the Ministry of Finance:

• 0% on taxable income up to AED 375,000
• 9% on taxable income above AED 375,000
• A separate rate applies to large multinational corporations under the OECD’s Pillar Two rules

7. Registering, Filing, and Paying Corporate Tax

All taxable entities, including free zone companies, must register with the FTA and obtain a Corporate Tax Registration Number.

• Filing deadline: within 9 months after the end of each financial year
• Payment deadline: within the same 9-month period

Example:

If your financial year ends on 31 December 2024, you must file and pay Corporate Tax by 30 September 2025.

8. Public Notice and Legal Reminder

The Ministry of Finance warns the public not to rely on unofficial sources or social media posts for Corporate Tax information. Only guidance issued by the Ministry of Finance and the Federal Tax Authority is valid.

Publishing or sharing inaccurate tax information may be considered a violation under Federal Decree-Law No. 34 of 2021 on Combatting Rumours and Cybercrime.

Always verify information on:

🔹 Ministry of Finance

🔹 Federal Tax Authority (FTA)

Gigsters Tip

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