Corporate Tax in Dubai, UAE

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TollFree
Box
124600
City
Dubai
Area
Jumeirah Lakes Tower
Address
Cluster X, Jumeirah Bay Tower X2, Suite 1801-10
Website
TollFree
Box
448865
City
Dubai
Area
Burj Khalifa
Address
Office No. 807 Clover Bay Tower, Burj Khalifa Area, Business Bay, Dubai U.A.E
Website

PROFILE OF Corporate Tax

FAQS

What is a Corporate Tax in the UAE?

UAE companies don't pay Corporate Taxes. Free zone enterprises normally have 50-year tax moratoriums. All UAE enterprises will pay corporate income taxes from 1 June 2023.

The Corporate Tax rate in the UAE is 9%. This plan applies to firms with a net or taxable income of at least AED 375,000. 0% tax rate if your small business's taxable income is less than AED 375,000.

Individual job income isn't included. Freelancers and those whose income exceeds AED 375,000 must have a license or permission. Profits would be taxed at 9%.

Does UAE have a corporate income tax?

UAE currently has no corporate income tax. A new corporate income tax scheme will begin on 1 June 2023.

Is there a CT rate?

The Corporate Tax rate in the UAE is 9%. The new corporate income tax system will include additional exemptions. Businesses with taxable income under AED 375,000 will pay no income tax. A separate tax rate will apply to major international corporations that fulfill the conditions. Extraction businesses will continue to be taxed at the emirate level.

How is CT Calculated?

Net income determines a company's tax rate. Net income is calculated by adding up all revenue streams. In addition, you also need to assess your costs spent to acquire those earnings as per expenses permissible (which may be stipulated by the final Tax Law), which include operational expenses, interest on loans, depreciation (or Capital Allowance), among others.

Net income is your taxable income after deducting all expenses. Then multiply your net income by 9%. The accounting net income (subject to modifications) must follow globally recognized accounting rules.

What is federal Corporate Tax?

Residents pay federal Corporate Tax. In the UAE, the federal Corporate Tax rate will be a at a fixed rate of 9% for enterprises whose taxable earnings exceed AED 375,000. This doesn't apply to mining companies.

when are Corporate Tax in UAE due?

Any business adopting a financial year beginning on 1 June 2023 and ending on 31 May 2024 will be subject to CT beginning on 1 June 2023. In all likelihood, the first tax return will be due by the end of 2024.

Any corporation that adopts a calendar year beginning on 1 January 2023 and ending on 31 December 2023 will be subject to CT beginning on 1 January 2024, with filing likely expected by mid-year 2025.

Are companies taxed in Dubai?

Dubai companies seldom pay corporate taxes. Free zone enterprises haven't paid corporate taxes for 50 years. Natural resource extractors and international banks may pay corporate tax under their decree-laws.

However, as of 1 June 2023, all businesses in the UAE, including those in Dubai, will be subject to a 9% Corporate Tax.

Are there any exemptions from the UAE Corporate Tax plan for 2023?

The UAE's 9% corporate income tax will have a few exceptions after 1 June 2023:

  • Taxes on firms extracting natural resources will stay at the emirates level
  • Certain multinational corporations will be taxed differently
  • Except from freelancing or business/commercial/professional activities, employment income must be licensed or permit-required
  • Real estate investment income, if done privately, not as a corporation
  • Personal stock investments, income, and capital gains
  • Savings and deposit account income and interest generated by individuals
  • Companies making less than AED 375,000 are not subject to the corporate tax

Does the Corporate Tax of 2023 apply to free zone businesses?

As of now, it is uncertain if the new Corporate Tax plan would have a substantial effect on enterprises in the free zones. According to early indications, free zone enterprises may be liable to the federal Corporate Tax on revenues from operations in the UAE. Offshore income may not be taxed.

UAE Corporate Tax reforms may impact your company as well. Consult a tax professional to prepare for the transfer. UAE enterprises may request a federal tax audit from Corporate Tax accountant.

Corporate Tax Planning – DCD, Dubai

We are here to assist you every step of the way. So, use our Corporate Tax consultants and start getting ready for the new Corporate Tax in the UAE.