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Corporate Tax Services in UAE
Corporate Tax is a direct tax on a company’s net income or profits, also known in some jurisdictions as “corporate income tax” or “business profits tax.”
A competitive Corporate Tax system, aligned with international best practices, strengthens the UAE’s position as a global business hub and supports its strategic development goals. It also reflects the UAE’s commitment to tax transparency and the prevention of harmful tax practices.
UAE Corporate Tax Overview
Effective Dates
The UAE Corporate Tax regime came into effect for financial years starting on or after 1 June 2023.
- A business with a financial year from 1 July 2023 to 30 June 2024 will be subject to Corporate Tax from 1 July 2023.
- A business with a calendar year from 1 January 2023 to 31 December 2023 will be subject to Corporate Tax from 1 January 2024.
Scope of UAE Corporate Tax
UAE Corporate Tax applies to all businesses and commercial activities carried out in the UAE, except for natural resource extraction, which remains subject to Emirate-level taxation.
UAE Corporate Tax Rates
- 0% on taxable income up to AED 375,000
- 9% on taxable income above AED 375,000
- 15% for large multinationals with global revenues of EUR 750 million or more under OECD Pillar Two rules
Corporate Tax for Individuals and Freelancers
Individuals are subject to UAE Corporate Tax if they carry out business activities under a commercial, industrial, or professional license. Freelancers with a valid license are also subject to tax if their annual net income exceeds AED 375,000.
Example:
If a freelancer earns AED 400,000, the tax payable is:
- 0% on the first AED 375,000 = AED 0
- 9% on the remaining AED 25,000 = AED 2,250
Exemptions from UAE Corporate Tax
Business Exemptions
- Businesses engaged in natural resource extraction remain subject to Emirate-level taxation, not UAE Corporate Tax.
- Additional exemptions may be announced in future updates.
Income Exemptions
- Dividends and capital gains from qualifying shareholdings are exempt.
- Qualifying intra-group transactions and reorganisations may also be exempt if conditions are met.
Corporate Tax for Foreign Companies
Foreign companies or individuals are taxed only if they conduct regular or ongoing business in the UAE. Income such as dividends, capital gains, interest, and royalties earned by foreign investors is generally exempt.
Corporate Tax in UAE Free Zones
Free zone businesses are subject to UAE Corporate Tax but may continue to benefit from existing incentives if they comply with regulatory requirements and avoid conducting business with Mainland UAE. All free zone companies must register and file a Corporate Tax return.
Industry-Specific Corporate Tax Rules
- Oil and Gas: Remain taxed at the Emirate level, outside UAE Corporate Tax.
- Banking: Banking operations are subject to UAE Corporate Tax.
- Real Estate: Activities such as development, management, construction, and brokerage are taxable.
Losses and Tax Groups
Loss Carry Forward Rules
Businesses can use losses incurred after the UAE Corporate Tax effective date to offset taxable income in future years, subject to conditions.
Group Loss Rules
Losses from one group company may offset another’s taxable income if requirements are met.
Tax Grouping Option
Groups of UAE companies may choose to form a tax group and file a single consolidated return.
Other Key Corporate Tax Considerations
Withholding Tax
No withholding tax applies to domestic or cross-border payments such as dividends, interest, or royalties.
Tax Credits
Foreign corporate tax paid on UAE taxable income can be credited against UAE Corporate Tax liability.
Transfer Pricing
Businesses must comply with transfer pricing regulations based on OECD guidelines, ensuring transactions between related parties meet the arm’s length standard.
UAE Corporate Tax Compliance and Administration
- All businesses must register for Corporate Tax.
- Only one tax return must be filed per financial year; no provisional filings are required.
- Returns must be filed electronically.
- Penalties apply for non-compliance, in line with other UAE tax rules.
Why Choose Our Corporate Tax Services in UAE
Navigating the UAE’s new corporate tax system can be complex. Our team of experienced corporate tax consultants in UAE helps businesses and individuals with:
- Tax planning and advisory
- Corporate tax registration and filing
- Compliance with UAE tax law
- Guidance on exemptions and incentives
Partner with us to stay compliant while optimising your tax position in Dubai, Abu Dhabi, and across the UAE.
Get in Touch!
Have questions or need support?
Reach out to the KLOUDAC team, we’re here to help you every step of the way.
