Corporate Tax FAQ
Corporate Tax FAQ

The UAE aims to establish a competitive Corporate Tax system aligned with global standards to strengthen its position as a business and investment hub. This move supports the country's development goals and commitment to international tax transparency.

No, most countries, including many in the Middle East, already have a comprehensive Corporate Tax system.

The UAE Corporate Tax becomes effective for Financial Years starting on or after June 1, 2023. For example: A business with a Financial Year starting on July 1, 2023, is subject to UAE Corporate Tax from that date. A business with a Financial Year starting on January 1, 2023, will be subject to UAE Corporate Tax from January 1, 2024.

UAE Corporate Tax applies to entities incorporated in the UAE, foreign entities effectively managed in the UAE, and foreign entities with a taxable presence in the UAE. Natural persons engaged in business activities in the UAE may also be subject to Corporate Tax.

Yes, UAE Corporate Tax applies irrespective of the ownership nationality. It covers entities locally or internationally owned.

Yes, UAE Corporate Tax is a federal tax and applies across all Emirates.

Businesses subject to Emirate level taxation on certain activities may be exempt from UAE Corporate Tax, but others may need to pay both. Emirate level taxes paid cannot be credited against Corporate Tax.

No, Corporate Tax and VAT are separate taxes, and both apply in the UAE.

If you are VAT registered, you will pay both VAT and Corporate Tax separately.

Yes, service fees to the Federal or relevant Emirate Government continue. These fees are generally deductible for UAE Corporate Tax purposes.

Existing international agreements, including those for double taxation avoidance, should be considered under the UAE Corporate Tax regime.

The FTA will administer, collect, and enforce UAE Corporate Tax and other federal taxes.

A "Business" or "Business Activity" refers to any economic activity, whether continuous or short term, conducted by any person, implying a profit motive. It doesn't lose its identity if it doesn't make a profit. All activities and assets used for a "Business" are considered under UAE Corporate Tax.

UAE incorporated companies and those effectively managed in the UAE are Resident Persons. Foreign companies may be treated as residents if effectively managed and controlled in the UAE. Natural persons engaged in business in the UAE are also considered Resident Persons.

Juridical persons incorporated abroad and effectively managed outside the UAE are Non- Resident Persons. Natural persons not engaged in taxable activities in the UAE are also Non- Resident Persons.

UAE resident juridical persons are taxed on worldwide income, with certain exemptions. Relief for foreign taxes paid is available to prevent double taxation.

Non-Resident Persons are taxed only on income attributable to their UAE Permanent Establishment, UAE nexus, or UAE-sourced income subject to a 0% Withholding Tax.

Taxable Income is the accounting net profit (or loss) adjusted for specific items outlined in the Corporate Tax Law. Adjustments include unrealized gains, exempt income, and deductions not allowable for tax purposes.

The Tax Period is the Financial Year for financial statements preparation, typically the calendar year (January 1 to December 31) unless a different 12-month period is used for financial statements.

Corporate Tax rates are: 0% for Taxable Income up to AED 375,000. 9% for Taxable Income exceeding AED 375,000. Qualifying Free Zone Persons enjoy 0% on Qualifying Income and 9% on non-Qualifying Income.

Each Taxable Person benefits from the 0% rate on Taxable Income up to AED 375,000, regardless of the number of businesses. Qualifying Free Zone Persons have 0% on Qualifying Income and 9% on non-Qualifying Income