Your One-Stop Portal for UAE Corporate Tax News and Updates
Corporate tax in the UAE was introduced pursuant to Federal Decree-Law No. 47 of 2022 on the taxation of corporates and businesses, effective from 1 June 2023. The law applies to businesses and individuals conducting commercial activities. The introduction of a corporate tax regime puts the UAE in line with international benchmarks on taxation, and introduces an element of transparency for UAE businesses with respect to international obligations such as OECD BEPS.
Corporate tax rates in UAE are as follows:
| Tier | Taxable Income | Corporate Tax Rate |
|---|---|---|
| 1. | Income of up to AED 375,000 | 0% |
| 2. | Income that exceeds AED 375,000 | 9% |
| 3. | A higher rate applies to multinational corporation that fall under Pillar Two. | From 15% |
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| Clause | Description |
|---|---|
| 1 | Taxable Persons |
| - UAE juridical persons, including Free Zone Persons (e.g., private or public joint stock companies, limited liability companies) incorporated or recognized under UAE laws. | |
| - Non-UAE juridical persons (incorporated outside the UAE) managed and controlled in the UAE. | |
| - Natural persons (individuals) conducting Business or Business Activity in the UAE (subject to Cabinet Decision). | |
| - Non-Resident Persons with Permanent Establishment or UAE sourced income under Corporate Tax. | |
| 2 | Categories of Taxable Persons |
| - Resident Person: Determined by specific factors outlined in the Corporate Tax Law, distinct from ordinary tax and legal residency. | |
| - Non-Resident Person: Taxable Persons not meeting Resident criteria. | |
| 3 | Resident Persons Criteria |
| - (a) UAE-incorporated juridical persons automatically considered Resident Persons. | |
| - (b) Juridical persons from foreign jurisdictions managed and controlled in the UAE are Resident Persons. | |
| - (c) Natural persons conducting Business in the UAE are Resident Persons for income derived from that activity. | |
| - (d) Cabinet Decision may include other Persons within Resident category. | |
| 4 | Non-Resident Persons Criteria |
| - (a) Non-Resident Persons with activities through Permanent Establishment in the UAE subject to Corporate Tax. | |
| - (b) Non-Resident Persons receiving State Sourced Income also considered Non-Resident for Corporate Tax. | |
| - (c) Cabinet Decision may specify other circumstances for Non-Resident classification. | |
| 5 | UAE Branches of Resident Persons |
| - UAE branches treated as extensions of head office; income and expenditure of all domestic branches included in Tax Return. |
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