Corporate Tax

Introduction

9% of Corporate Tax in UAE implemented from June 1, 2023 for businesses with profits exceeding AED 375,000 and 0% Corporate tax in UAE for free zone businesses. Are you ready for corporate tax in UAE! We are the top corporate tax service provider in UAE offering specially curated taxation services with the approved tax agents in UAE.

The Introduction of Corporate Tax will be effective from 1 June 2023 with a standard rate of 9% for businesses earning above AED 375,000. The UAE corporate tax law includes world-class taxation practices focused to develop the country’s economy, helping businesses to meet international standards, and preventing illegal tax practices.

Following are the Corporate Tax Rates in UAE for businesses:

• 0% corporate tax rate applies to taxable income up to AED 375,000
• 9% corporate tax rate applies to taxable income over AED 375,000
• 15% corporate tax rate applies to all multinational corporations subject to OECD Base Erosion and Profit-Sharing laws that belong within Pillar 2 of the BEPS 2.0 framework, i.e. combined worldwide revenues in excess of AED 3.15 billion

Corporate Tax on Free Zones in UAE

A Free Zone company or a Qualifying Free Zone Person can be benefitted from a special Corporate Tax rate of 0% on their “Qualifying Income in UAE” exclusively. The qualifying income is based on the transactions made by the entities. If the Free Zone Businesses come under the CT regulations for Free Zones as per X UAE CT Regime, they might be subjected to the corporate tax rate of 9%.

The implementation of Corporate tax UAE impacts the following:

• Businesses and entrepreneurs involved in activities under a commercial license in the UAE
• Free Zone businesses (Tax policy observes the rights provided to the free zone businesses adhering to the regulations, and not performing business in the UAE mainland)
• Operations concerning the Banking sector
• Foreign companies and investors, provided they regularly conduct trade or business
• Taxable Persons – that include Free Zone Persons, need to register for Corporate Tax and obtain a Corporate Tax Registration Number.
• The Federal Tax Authority requests the Exempt Persons to register for Corporate Tax.

Exempt from UAE Corporate Tax

• Businesses pertaining to the extraction of natural resources, influenced by the Emirate-based corporate taxation
• Dividends and capital gains from UAE businesses from qualifying shareholdings
• Intra-group transactions and reorganizations, ensuring that the conditions are met
• Earnings such as salary and similar income, from the public or private sector
• Interest from bank deposits or saving schemes
• Income from dividends, capital gains, interest, royalties, and other investment returns earned by a foreign investor