0% corporate tax rates in UAE apply to taxable income up to AED375,000 and 9% corporate tax rates in UAE apply to taxable income over AED375,000.
Corporate tax (CT) is a direct tax imposed on the net income or profit of corporations and other entities from their business activities. In other jurisdictions, Corporate Tax may also be known as “Corporate Income Tax (CIT)” or “Business Profits Tax.
Corporate Tax Rates in the UAE
Corporate Tax will be imposed on the taxable income of businesses at the following rates:
- A 0% corporate tax rate applies to taxable income up to AED 375,000
- A 9% corporate tax rate applies to taxable income over AED 375,000
- A 15% corporate tax rate applies to all multinational corporations subject to OECD Base Erosion and Profit-Sharing laws that belong within Pillar 2 of the BEPS 2.0 framework, i.e. combined worldwide revenues in excess of AED 3.15 billion
Corporate Tax Rates for Free Zones in the UAE
Corporate Tax shall be imposed on a Qualified Free Zone Person at the following rates:
- 0% on Qualifying Income
- 9% on taxable income that is not Qualifying Income
The Impact of Corporate Tax on Businesses in the UAE
With the introduction of corporate tax in the UAE, a significant change is anticipated in the tax and compliance costs for most UAE businesses. Entities must comply with the new tax regime, necessitating accurate identification of tax implications and adjustments to corporate structure, operating models, finance/tax operations, reporting systems, legal agreements, and transfer pricing policies if required.
Our dedicated corporate tax team in the UAE has extensive experience and can support you throughout your readiness journey. If you need assistance at any stage of the Corporate Tax implementation, please contact one of our tax experts.
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