UAE Corporate Tax
UAE Corporate Tax
The UAE introduced Corporate Tax on business income on 3 October 2022, aiming to support the nation in achieving its strategic objectives and accelerating overall development and growth. Corporate Tax is a form of direct tax levied on the taxable income of corporations and other businesses. The UAE Corporate Tax regime applies to tax periods starting on or after 1 June 2023, and is regulated by Federal Decree-Law No. 47 of 2022.
At Almalia Consulting, we help businesses navigate this and Maximize growth evolving tax landscape with clarity and confidence. Our team ensures you understand how these regulations impact your operations, so you can remain compliant while focusing on growth. From interpreting the UAE Corporate Tax Law to advising on practical implementation, Almalia Consulting stands by your side to protect your interests and support your long-term success.
Applicability of UAE Corporate Tax
- The UAE Corporate Tax Regime applies to Tax Period starting on or after 1 June 2023.
Example:
- A Business Entity that has a Financial Year starting on 1 July 2023 and ending on 30 June 2024 will become subject to UAE CT from 1 July 2023 (which is the beginning of the First Financial Year that starts on or after 1 June 2023).
- A Business Entity that has a Financial Year starting on 1 January 2023 and ending on 31 December 2023 will become subject to UAE CT from 1 January 2024 (which is the beginning of the First Financial Year that starts on or after 1 June 2023).
Entities Subject to UAE Corporate Tax
Corporate Tax applies to:
Business Entities that are Incorporated in the UAE: This includes Companies and Other Legal Entities.
Therefore Foreign Business Entities that are Effectively Managed and Controlled in the UAE: Even if a Business is Registered outside the UAE.
Foreign Business Entities that have a ‘Nexus’ in the UAE: If a Foreign Business Entity earns Income from Immovable Property (Real Estate) Located in the UAE.
All the Foreign Business Entities that have a ‘Permanent Establishment (PE) in the UAE: Even if a Business is Registered outside the UAE.
All the Non-Resident Persons Deriving State-Sourced Income: Non- Residents who earn Income from Sources within the UAE may be subject to UAE tax laws, depending on the nature of the Income.
Natural Persons Conducting Business or Business Activities in the UAE and having a Turnover of over AED 1,000,000 per Gregorian Calendar Year (Jan-Dec) from such Business or Business Activities: This applies to Individual Entrepreneurs or Sole Proprietors.
Corporate Tax Rate – General
- Corporate Tax is Levied 0% on Taxable Income up to AED 375,000 and at 9% on Taxable Income above AED 375,000.
| Taxable Income | Corporate Tax Rate |
|---|---|
| Up To AED 375,000 | 0% |
| Above AED 375,000 | 9% |
- Example: A Business Entity earns Taxable Income of AED 600,000 in a Tax Period, Corporate Tax Liability will be calculated as follows:
| Taxable Income | Corporate Tax Rate | Corporate Tax Liability |
|---|---|---|
| Up to AED 375,000 | 0% | AED 0 |
| Above AED 375,000 | 9% | AED 20,250 (AED 600,000 – AED 375,000) X 9% |
Corporate Tax Registration
- All the Taxable Persons should register for Corporate Tax with the Federal Tax Authority (FTA) and obtain a Tax Registration Number for Corporate Tax and this needs to be done before a timeline to be determined by the FTA.
- FTA has specified a timeline for Corporate Tax Registration. Therefore the Timeline was outlined in a Decision issued by the FTA in FTA Decision No. 3 of 2024 dated 22 February 2024.
Penalty for Late Registration
- All Persons have to ensure their Corporate Tax registration application is submitted before the deadline specified by the Federal Tax Authority otherwise they have to pay Penalty Fees of AED 10,000.
Documents Required for Corporate Tax Registration
General List of Documents that are commonly required:
- Emirates ID/Passport
- Trade License
- Power of Attorney
- Memorandum of Association (MOA)
- Certificate of Incorporation
Note: Documents Format should be in PDF, DOC & DOCX File and Individual File Size can be Max up to 5 MB.
Corporate Tax Return
- Corporate Tax Return must be file within 9 months from the end of the relevant Tax Period.
- Example: A Business Entity that has a Financial Year starting on 1 January 2024 and ending on 31 December 2024 must file its Corporate Tax Return before 30 September 2025 (9 months from 31 Dec 2024).
Corporate Tax Payment
- Corporate Tax must be paid within 9 months from the end of the relevant Tax Period.
- Example: A Business Entity that has a Financial Year starting on 1 January 2024 and ending on 31 December 2024 must pay their Corporate Tax Liability before 30 September 2025 (9 months from 31 Dec 2024).
Why Choose Almalia Consulting?
Deep UAE Expertise-Our team is well-versed in UAE tax laws, VAT, and compliance rules. Therefore We keep your business up to date.
Custom Solutions-Every business is different. Thus , We create strategies that match your goals and industry.
Complete Support– From company formation to daily tax and accounting, in addition we handle it all so you can focus on growth.
Clear & Honest –There are no hidden fees. We keep you informed with regular updates and easy-to-understand advice.
Long-Term Commitment – As ,We view ourselves as your partners, helping you grow and thrive in the UAE market.
Frequently Asked Question
Who needs to pay corporate tax in the UAE?
Most mainland businesses and some free zone companies are subject to corporate tax, depending on their activities and income.
What is the UAE corporate tax rate?
The UAE charges 9% on taxable income above a set limit. In addistion, This keeps the UAE a desirable destination for business.
Do you handle VAT?
Therefore Yes! We handle VAT registration, filing, and compliance, so you never have to worry for our Strategic plan.
Can you help set up different types of companies?
Absolutely. We also set up mainland, free zone, and offshore companies, managing the full process.
Why is AML, ESR, and UBO compliance needed?
It’s the law in the UAE. Staying compliant helps avoid fines, protects your reputation, and ensures smooth operations.
Do you also offer accounting and bookkeeping services?
Yes. We handle all your
Effective
accounting, bookkeeping, and financial reporting, ensuring your records stay up to date.
How can we start working with you?
Contact us for a consultation, and we’ll create a plan tailored to your business needs.