Corporate Tax – Overview
Corporate Tax – Overview
Corporate Tax is a form of direct tax levied on the net income or profit of corporations and other businesses. Corporate Tax is sometimes also referred to as “Corporate Income Tax” or “Business Profits Tax” in other jurisdictions.
UAE Corporate Tax applies to juridical persons incorporated in the UAE and to foreign juridical persons that are effectively managed and controlled in the UAE (see question 20: ‘Who is considered a Resident Person for UAE Corporate Tax purposes?’). A foreign juridical person that operates in the UAE through a Permanent Establishment or that has a taxable nexus in the UAE would also be subject to Corporate Tax (see Section M “Foreign persons”).
Natural persons will be subject to Corporate Tax only if they are engaged in a Business or Business Activity in the UAE, either directly or through an Unincorporated Partnership or sole proprietorship. Cabinet Decision No. 49 of 2023 specifies further information on what would bring a natural person within the scope of UAE Corporate Tax.
Scope and rate
Natural persons and juridical persons a) 0% for Taxable Income up to and including AED 375,000. (b) 9% for Taxable Income exceeding AED 375,000
Qualifying Free Zone Persons
Applicable Corporate Tax rate: (a) 0% on Qualifying Income. (b) 9% on Taxable Income that is not Qualifying Income as specified in Cabinet Decision No. 55 of 2023.
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