Corporate Tax Guide
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About UAE Corporate Tax
The UAE has traditionally been known for its tax-free environment, but with the introduction of corporate tax, businesses need to understand the new regulatory landscape.
Corporate tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business activities. The UAE announced the introduction of a federal corporate tax to diversify its economy and align with global tax standards.
Corporate Tax Rate and Applicability:
Tax Rate
- The standard corporate tax rate in the UAE is 9% on taxable income exceeding AED 375,000.
- A 0% tax rate applies to taxable income up to AED 375,000 to support small businesses and startups.
Applicability
- The corporate tax applies to all businesses and commercial activities in the UAE, except for the extraction of natural resources, which remains subject to emirate-level taxation.
Free Zone Entities
- Qualifying Free Zone Persons will continue to benefit from the 0% corporate tax rate on qualifying income. Non-qualifying income will be subject to the standard corporate tax rate.
Exempt Entities
- Government entities, government-controlled entities, extractive businesses, and non-extractive natural resource businesses (subject to existing emirate-level taxation) are exempt from corporate tax.
- Charities, public benefit organizations, investment funds, and wholly-owned UAE subsidiaries of exempt entities may also be exempt.
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