Skip to content Skip to footer

The New Corporate Income Tax in UAE


Several tax changes have been implemented in the UAE in recent years to streamline and diversify its state revenue system while in line with international best practices.

With the introduction of federal corporate tax in the UAE, the country aims to enhance its position further as a world-leading hub for businesses and investment while accelerating its strategic goal of development and transformation. it is crucial for business owners to understand what it entails. The new tax regime would require changing any business’s tax and finance departments. Any transaction or book entry will need to be examined from the perspective of CT going forward.

Corporate Tax UAE is a direct tax levied on corporations and business entities’ net income or profit. Simply put, it is a tax on the businesses’ net profits. Companies are required to pay a certain percentage of profits as taxes.

The announced UAE CT regime introduces a tier system , To extend support to small businesses and start-ups, 0% rate applies to taxable income up to AED 375,000. For Income that exceeds AED 375,000 it will be taxable at 9% . Taxable profits are the accounting profits subject to certain adjustments. A different tax rate for large multinationals that meet specific criteria under the “Pillar Two’ of OECD BEPS Project.

Any company that adopts a fiscal year starting on June 2023 and ending 31 May 2024 will be subject to CT starting 1 June 2023. Businesses with reference date of 31 December will become subject to CT from 1 January 2024.

The corporate tax will apply to all businesses and Individuals carrying out business activities under a commercial business license in the UAE. Individuals & Foreign entities only if they conduct a trade or business in the UAE continuously or regularly. Businesses engaged in real estate management, construction, development, and agency.

Leave a comment