True Face Of UAE Corporate Tax‍

What exactly is a corporate tax?

A corporate tax is defined as a type of direct tax levied on the net profit of corporations or other entities from their business. Corporate Tax is sometimes also referred to as “Corporate Income Tax (CIT)” or “Business Profits Tax” in other jurisdictions. Business owners, subjected to the tax, would pay taxes on production, people, property, and environmental impact, as well as the firm's income.

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Corporate taxes in the UAE:

On 31st Jan 2022, the Federal Tax Authority (FTA) of the United Arab Emirates announced the imposition of Corporate taxes on businesses from the year 2023.  

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Corporate tax must be paid by:

A business earning taxable income of more than AED 375,000 (US$ 102,000), doesn't come under free zone jurisdiction and takes tax holiday benefits.

An individual with net profits above AED 375,000 from activities that require a commercial licence.

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Exceptions:

The UAE corporate tax will be applicable across all Emirates and will apply to all business and commercial activities, except for: the extraction of natural resources, which will continue to be subject to Emirates level taxation.

Taxes for Free zones:

Free zone businesses are required to register and file a corporate tax return, but will still enjoy the benefits from Corporate tax holidays / 0% taxation if they comply with all regulatory requirements and do not conduct business within mainland UAE.

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