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Tax obligations accurately and on time.
Corporate Tax is a form of direct tax levied on the net income of corporations and other businesses. It is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions.
Corporate Tax will be levied at a headline rate of 9% on Taxable Income exceeding AED 375,000. Taxable Income below this threshold will be subject to a 0% rate of Corporate Tax.
Taxable Income below AED 375,000
Taxable Income exceeding AED 375,000
Taxable Income that doesn't meet the Qualifying income definition
Generally, the Corporate Tax applies to the following “Taxable Persons”:
The UAE governmental Cabinet also has the authority to exempt people from the tax upon suggestion from the finance minister.
Extractive in this case refers to activities involving raw materials from the Earth.
The Corporate Tax Law also exempts certain types of income from Corporate Tax. This means that a Taxable Persons will not be subject to Corporate Tax on such income and cannot claim a deduction for any related expenditure. Taxable Persons who earn exempt income will remain subject to Corporate Tax on their Taxable Income.
The main purpose of certain income being exempt from Corporate Tax is to prevent double taxation on certain types of income. Specifically, dividends and capital gains earned from domestic and foreign shareholdings will generally be exempt from Corporate Tax.
Note that a Resident Person can elect, subject to certain conditions, to not take into account income from a foreign Permanent Establishment for UAE Corporate Tax purposes.
A Free Zone Person is a juridical person or legal entity established or registered in a designated Free Zone in the UAE. This may include a branch of a Non-Resident Person registered in a Free Zone.
A Qualifying Free Zone Person can benefit from a preferential Corporate Tax rate of 0% on their “Qualifying Income” only.