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Corporate tax in the UAE was introduced pursuant to Federal Decree-Law No. 47 of 2022 on the taxation of corporates and businesses, effective from 1 June 2023. The law applies to businesses and individuals conducting commercial activities. The introduction of a corporate tax regime puts the UAE in line with international benchmarks on taxation, and introduces an element of transparency for UAE businesses with respect to international obligations such as OECD BEPS.

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Corporate Tax Rates in UAE

Corporate tax rates in UAE are as follows:

TierTaxable IncomeCorporate Tax Rate
1.Income of up to AED 375,0000%
2.Income that exceeds AED 375,0009%
3.A higher rate applies to multinational corporation that fall under Pillar Two.From 15%
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Frequent Asked Questions about Corporate Tax in UAE

What is the Corporate Tax Rate in the UAE?

The standard tax rate is 9% on taxable income over AED 375,000. Taxable profits of AED 375,000 or less are taxed at 0%.

Who needs to register for Corporate Tax in the UAE?

(Corporate tax applies to) All taxable persons, including companies incorporated in the UAE and individuals conducting business with gross income over AED 375,000, must register with the Federal Tax Authority (FTA).

When do I have to file for Corporate Tax in UAE?

Businesses are required to file their Corporate Tax return within 9 months of financial year end.

Are free zone companies liable for corporate tax?

Yes. However, qualifying free zone companies may also benefit from 0% tax on qualifying income if they maintain sufficient substance, (continue to) comply and have audited financial statements.

How does corporate tax affect freelancers and self-employed individuals?

The corporate tax rate applies if annual business income exceeds AED 375,000.

Are dividends and capital gains taxable under UAE corporate tax?

Yes, unless a participation exemption is available, which has specific conditions, one of which is to have at least 5% shareholding in a qualifying subsidiary.

What expenses may be deducted for corporate tax purposes?

Business-related expenses such as rent, salaries, depreciation and R&D related costs can be deducted. However, there are some limits, such as the cap on net interest deductions, which is limited to 30% of EBITDA.

What is transfer pricing and when does it apply?

Transfer pricing rules apply to transactions between related parties and connected persons. Businesses will be required to comply with OECD arm's length principles, and maintain local file and master file documentation.

Does corporate tax apply to foreign companies in the UAE?

Yes, foreign entities that earn UAE sourced income, are effectively managed and controlled in the UAE or have a permanent establishment (PE) will be subject to corporate tax in the UAE.
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