SERVICES

The UAE is set to introduce a new corporate tax law by June 2023, which will impose a 9% corporate tax rate on businesses with taxable profits over AED 375,000. This rate is among the lowest globally, and it's important to note that the tax will only apply to taxable profits, not the company's entire turnover.

​

• Corporate tax in UAE is a direct tax levied on the net income or profit of corporations and business entities. It is a certain percentage of the profit that companies must pay.

• All businesses with a taxable net profit of more than 375,000 AED are required to pay corporate tax in UAE.

• The current corporate tax rate in UAE is 9% of the net profit, but businesses with a net profit of up to 375,000 AED are exempt from paying corporate tax.

• The implementation of the federal corporate tax in UAE will start from the financial year beginning on or after June 1, 2023.

• The UAE authorities released the corporate tax law on December 9, 2020. The law is available on the official website of the Ministry of Finance.

• Corporate tax is not applicable to individuals, foreign investors who do not carry on business in UAE, certain types of intragroup transactions, and qualifying shareholdings.

• Corporate tax in UAE is calculated at 9% of the net profit shown in the company's financial statements. However, the first 375,000 AED of net profit is exempt from corporate tax. For example, if a company's net profit is 475,000 AED, the corporate tax payable would be 9,000 AED (i.e., 475,000 - 375,000 x 9/100).