Corporate Tax in the UAE
Corporate Tax (CT) stands as a fundamental component of fiscal policies worldwide, and the United Arab Emirates (UAE) is embracing this global trend as it navigates towards economic diversification and sustainable growth. CT, a direct tax levied on the net income or profits of corporations and entities, marks a significant milestone in the UAE’s fiscal landscape.
What Is Corporate Tax ?
Effective from the commencement of their first financial year beginning on or after 1 June 2023, businesses in the UAE will come under the purview of Corporate Tax. This transition signifies a pivotal moment in the UAE’s journey, aligning its fiscal policies with international norms and positioning itself as a robust player in the global economy.
The Benefits of Corporate Tax Compliance

Financial Stability

Competitive Advantage

Strategic Decision - Making

Access to Funding

Legal Protection

Ethical Reputation

Government Support

International Standing
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Corporate Tax applies to the following entities:
- UAE Companies and Juridical Persons: Including those incorporated or effectively managed and controlled within the UAE.
- Natural Persons (Individuals): Engaged in business or business activities within the UAE, as specified by Cabinet Decision.
- Non-Resident Juridical Persons: Foreign legal entities with a Permanent Establishment in the UAE.
- Juridical Persons in UAE Free Zones: Subject to Corporate Tax but may qualify for a 0% tax rate under certain conditions.
Non-resident persons without a Permanent Establishment in the UAE may be subject to Withholding Tax (at 0%) on UAE-sourced income, collected at the source by the payer.
Natural Persons and Juridical Persons:
- 0% for Taxable Income up to AED 375,000.
- 9% for Taxable Income exceeding AED 375,000.
Qualifying Free Zone Persons:
- 0% on Qualifying Income.
- 9% on Taxable Income that is not Qualifying Income.
Individuals will be subject to UAE Corporate Tax if their annual turnover from a ‘Business’ or ‘Business Activity’ in the UAE exceeds AED 1 million.
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