- Mainland Businesses: All companies and individuals operating under a commercial license in the UAE.
- Free Zone Entities: Businesses registered in UAE free zones are subject to Corporate Tax. However, the UAE CT regime will continue to honour existing tax incentives for free zone businesses that meet regulatory requirements and do not conduct business with the UAE mainland.
- Foreign Entities & Individuals: Corporate Tax will apply to foreign businesses and individuals only if they carry out trade or business activities in the UAE on a regular or ongoing basis.
- Banking Institutions: All banking operations conducted within the UAE are subject to Corporate Tax.
- Real Estate Activities: Businesses involved in real estate management, development, construction, agency, and brokerage will also fall under the scope of UAE Corporate Tax.
AKT Associates Services
Corporate Tax (CT) in the
UAE
Corporate tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business. Corporate tax is governed by Federal Decree-Law No.60 of 2023 Corporate Tax in the UAE is a form of direct tax applied to the net profits of corporations and other business entities. It is regulated under Federal Decree-Law No. 60 of 2023, which introduced amendments to Federal Decree-Law No. 47 of 2022 concerning the taxation of corporations and businesses.
Under the new law, businesses in the UAE will be subject to Corporate Tax starting from the beginning of their first financial year that commences on or after 1st June 2023.
UAE Corporate Tax (CT) applies to a wide range of entities and business activities, including:
According to the UAE Ministry of Finance, the applicable Corporate Tax rates are:
- 0% for taxable income up to AED 375,000
- 9% for taxable income above AED 375,000
- A different rate (to be announced) will apply to large multinationals meeting specific criteria under OECD Pillar Two rules
The key goals of introducing Corporate Tax in the UAE are to:
- Strengthen the UAE’s position as a global business and investment hub
- Drive sustainable economic growth and development
- Ensure compliance with international tax transparency and anti-avoidance standards
Corporate Tax applies to:
– All businesses and individuals carrying out commercial activities under a valid UAE business license
– Free zone businesses (Note: Free zone incentives will continue for businesses that meet regulatory requirements and do not conduct business in mainland UAE)
– Foreign entities and individuals, if they conduct ongoing or regular business in the UAE
– Banks and financial institutions
– Businesses engaged in real estate development, management, construction, and brokerage
Corporate Tax does not apply to:
- Individuals earning salary or wages (public or private sector)
- Personal income from bank deposits or savings schemes
- Foreign investors’ earnings from dividends, capital gains, interest, royalties, and other investment returns
- Real estate investments made by individuals in their personal capacity
Income from shares or securities held personally
Additional exemptions include:
– Businesses involved in the extraction of natural resources (subject to Emirate-level taxation)
– Dividends and capital gains from qualifying shareholdings
– Qualifying intra-group transactions and business restructurings (subject to conditions)
Disclaimer: This content is for general informational purposes only and does not constitute professional tax, legal, or financial advice. The information is based on current regulations, which are subject to change. For specific advice regarding your business and its tax obligations, please consult with a qualified professional.
Ready To Get Started?
Contact AKT Associates today for a free consultation and ensure your business is VAT & CT compliant without the stress.
Contact Us Now!
Recent Comments