Corporate Tax Rates in UAE
Corporate Tax Rates in UAE
0% corporate tax rates in UAE apply to taxable income up to AED375,000 and 9% corporate tax rate in UAE apply to taxable income over AED375,000.
What are the UAE corporate tax rates?
Corporate tax in the UAE shall be imposed on the taxable income of businesses at the following rates:
- A 0% corporate tax rate applies to taxable income up to AED 375,000
- A 9% corporate tax rate applies to taxable income over AED 375,000
- A 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.
Impact of Corporate Tax on Free zones
The UAE plans to keep its promise to businesses registered in Free Zones that do not operate a business with the mainland that they will be getting the benefit of corporate tax incentives depending on the respective Free Zone regulations. An yearly CIT return is required to be submitted for all free zones.
Corporate Tax For Free Zone Companies in UAE with qualifying income will be 0%. Corporate Tax For Free Zone Companies with non qualifying income will be 9%. As per the law, businesses will be liable for corporate tax in UAE from the beginning of their financial year, starting on or after June 1, 2023.
Impact of Corporate Tax on UAE businesses
With the introduction of corporate tax in the UAE, a major change is expected in the tax and compliance costs of most UAE businesses. Entities must be compliant with the new tax regime and this requires an accurate identification of tax implications and alterations to corporate structure, operating model(s), finance/tax operations, reporting systems, legal agreements and transfer pricing policies if required.
Our designated tax team at Xact Auditing will provide the required assistance and clear your queries on corporate tax. Corporate Tax Registration is now open by the Federal Tax Authority (FTA). If you are looking for Corporate Tax Registration services, feel free to contact us.
Zuha is a content writer at Xact Auditing, specializing in UAE accounting, audit, VAT, and Corporate Tax content. She delivers research-driven, clear insights by simplifying complex regulatory and compliance topics for UAE businesses. Her work is developed in collaboration with chartered accountants and tax professionals, ensuring alignment with IFRS, ISA, and FTA regulations. Content is written by Zuha and reviewed by Xact Auditing’s audit, accountants and tax experts for accuracy and compliance.
