Corporate Tax Consultancy in the UAE
Corporate tax (CT) is a direct tax imposed on the net income or profits of businesses in the UAE, as reported in their financial statements prepared in accordance with internationally accepted accounting standards. The introduction of federal corporate tax in UAE aims to further strengthen the country’s position as a world-leading hub for businesses and investment and accelerate the strategic objective towards development and transformation. Also, the corporate tax concept helps meet international standards for tax transparency and avoids harmful tax practices.
Who it Applies To
Corporate Tax (CT) Applicability
Corporate Tax Rates in UAE
Taxable Income/ Profit | Corporate Tax Rate (%) |
Up to AED 375,000 | 0% |
Above AED 375,000 | 9% |
For example, if the company earns a taxable profit of AED 500,000 in a financial year, The Corporate Tax liability will be as follows:
- Taxable income of first AED 375,000 will be taxed at 0% = AED 0.
- Taxable income of the remaining AED 125,000 (income exceeding AED 375,000, i.e., AED 500,000 minus AED 375,000) will be taxed at 9% = AED 11,250.
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Exemptions from UAE Corporate Tax
Exempted Incomes
The following sources of income are exempt from UAE Corporate Tax:
- Dividends and profit distributions from UAE incorporated or resident juridical persons, as well as from Participating Interests in foreign juridical persons, are exempt from UAE Corporate Tax.
- Certain other income (e.g., capital gains, foreign exchange gains/losses, impairment gains/losses) from domestic or foreign Participating Interests.
- Income from dividends, capital gains, interest, and royalties of foreign juridical persons or natural persons is exempt, unless attributed to a Permanent Establishment in the UAE.
- Interest and other personal investment and savings income of natural persons in their personal capacity are exempt.
- Income from foreign branches or Permanent Establishments with a "Foreign Permanent Establishment" exemption election.
- Income earned by non-residents from operating or leasing aircraft and ships in international transportation under specific conditions.
- Salaries, wages, allowances, and bonuses received by employees under employment contracts.
Exempted Persons
The following Persons are automatically exempt from UAE Corporate Tax:
- UAE Federal and Emirate Governments, their departments, authorities, and other public institutions.
- Companies wholly owned and controlled by a Government Entity engaged in Mandated Activities, as listed in a Cabinet Decision.
- Businesses involved in the extraction of UAE Natural Resources or related non-extractive activities subject to Emirate-level taxation, provided they meet specific conditions.
- Qualifying Public Benefit Entities listed in Cabinet Decision No. 37 of 2023 or subsequent decisions.
The following Persons can be exempted from UAE Corporate Tax upon approval of an application submitted to the Federal Tax Authority:
- Qualifying Investment Funds meeting prescribed conditions.
- Public or private pension or social security funds meeting the conditions specified in Ministerial Decision No. 115 of 2023.
- UAE juridical persons wholly-owned and controlled by certain exempted entities, engaged in activities specified in paragraph (h) of Clause 1 of Article 4 of the Corporate Tax Law.