Understanding Corporate Tax in UAE: A Complete Guide
TaxWatch Team••8 min read
Guides
# Understanding Corporate Tax in UAE: A Complete Guide
The UAE introduced corporate tax effective from June 1, 2023, marking a significant shift in the country's fiscal landscape. This comprehensive guide covers everything businesses need to know about the new tax regime.
## Overview of UAE Corporate Tax
The UAE Corporate Tax applies to businesses operating in the UAE, with a standard rate of **9%** on taxable income exceeding AED 375,000. This positions the UAE as having one of the most competitive corporate tax rates globally.
## Key Points
- **9% tax rate** on taxable income above AED 375,000
- **0% rate** on taxable income up to AED 375,000
- Free zone benefits maintained for qualifying activities
- Small business relief available for eligible businesses
## Who is Subject to Corporate Tax?
Corporate tax applies to:
1. **UAE companies and other juridical persons** incorporated in the UAE
2. **Foreign juridical persons** with a permanent establishment in the UAE
3. **Natural persons** conducting business in the UAE (above AED 1 million)
## Free Zone Benefits
Qualifying Free Zone Persons can benefit from a **0% corporate tax rate** on qualifying income, provided they:
- Maintain adequate substance in the UAE
- Derive qualifying income as defined by the law
- Have not elected to be subject to corporate tax at regular rates
- Comply with transfer pricing documentation requirements
## Filing and Payment
- Tax periods generally follow a Gregorian calendar year
- Tax returns must be filed within **9 months** from the end of the tax period
- Tax payment is due by the same deadline
## Getting Started with Compliance
Businesses should:
1. Assess their tax position and potential liability
2. Register for corporate tax with the Federal Tax Authority
3. Implement proper accounting systems
4. Maintain adequate documentation
5. Seek professional advice for complex situations
Contact TaxWatch for personalized guidance on your corporate tax obligations.
The UAE introduced corporate tax effective from June 1, 2023, marking a significant shift in the country's fiscal landscape. This comprehensive guide covers everything businesses need to know about the new tax regime.
## Overview of UAE Corporate Tax
The UAE Corporate Tax applies to businesses operating in the UAE, with a standard rate of **9%** on taxable income exceeding AED 375,000. This positions the UAE as having one of the most competitive corporate tax rates globally.
## Key Points
- **9% tax rate** on taxable income above AED 375,000
- **0% rate** on taxable income up to AED 375,000
- Free zone benefits maintained for qualifying activities
- Small business relief available for eligible businesses
## Who is Subject to Corporate Tax?
Corporate tax applies to:
1. **UAE companies and other juridical persons** incorporated in the UAE
2. **Foreign juridical persons** with a permanent establishment in the UAE
3. **Natural persons** conducting business in the UAE (above AED 1 million)
## Free Zone Benefits
Qualifying Free Zone Persons can benefit from a **0% corporate tax rate** on qualifying income, provided they:
- Maintain adequate substance in the UAE
- Derive qualifying income as defined by the law
- Have not elected to be subject to corporate tax at regular rates
- Comply with transfer pricing documentation requirements
## Filing and Payment
- Tax periods generally follow a Gregorian calendar year
- Tax returns must be filed within **9 months** from the end of the tax period
- Tax payment is due by the same deadline
## Getting Started with Compliance
Businesses should:
1. Assess their tax position and potential liability
2. Register for corporate tax with the Federal Tax Authority
3. Implement proper accounting systems
4. Maintain adequate documentation
5. Seek professional advice for complex situations
Contact TaxWatch for personalized guidance on your corporate tax obligations.