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Corporate Tax in UAE is the new federal corporate tax which came into effect from the financial year starting from 1st June 2023 with a standard rate of 9%. The tax applies to taxable profits of more than AED 375,000 (approximately USD 102,000). There is no tax on taxable profits below this threshold. With this UAE has become the 4th country in the GCC to introduce federal corporate tax. Corporate Tax in UAE is remarkably low when compared to other nations, which makes it a favoured destination for companies seeking to establish a business presence in the Middle East. The usual corporate tax rate is 55% for oil firms and 50% for all other businesses. In addition, the UAE has various free-trade zones where businesses could operate tax-free.
FAQ’s about Corporate Tax in UAE
What is the newly introduced Corporate Tax in UAE in 2023?
Corporate Tax in UAE is a form of tax charged directly on the net income or profits of corporations and business entities.
Who is eligible to pay the Corporate Tax in UAE?
This tax applies to businesses whose taxable profits are more than AED 375,000 (approximately USD 102,000). Those businesses whose taxable profits are below this threshold are exempted from paying the corporate tax.
What is the rate of Corporate Tax in UAE?
The corporate tax is only 9% of the net profit of the business.
Who are exempted from the Corporate Tax in UAE?
- Small businesses whose total revenue in the previous and current fiscal year does not exceed AED 3 million.
- Individuals who are earning income from any other activity other than trade or business in UAE are exempted from this corporate tax
- Foreign investors who are not involved in any business in UAE are also exempted
- Businesses that are located in free zone
Is it referred to by other names?
- Yes. It is also referred as Corporate Income Tax or Business Profits Tax in other jurisdictions
- Here are some additional details about the UAE corporate tax regime:
- The tax year is the same as the calendar year.
- The tax return is due within 12 months of the end of the tax year.
- The tax is payable in four instalments, due on the 30th day of the month following the end of each quarter.
- The tax is administered by the Federal Tax Authority (FTA)
