In the United Arab Emirates, corporations pay corporate tax on their net profits. It was first implemented on June 1, 2023, and as of January 1, 2024, it fully applies to the majority of businesses.
Every business in the UAE must do these three things to comply with the new corporate tax scheme:
1. Register for corporate tax from June 2023 onwards.
2. Keep accounting records up to the required reporting standard (e.g. IFRS).
3. File a corporate tax submission with the Federal Tax Authority.
While not all businesses have to pay corporate tax, every business must still register and comply with these steps to verify whether they qualify for a tax exemption.
Our experts will advise you on all corporate tax considerations which might impact your business. This will include what tax exemptions could be available to your business and how to benefit from these.
Our team will assist in registering your business for corporate tax with the FTA and manage the deadlines for all of your corporate tax obligations.
Our team will assess your corporate tax position, ensure the best tax outcome for your business, and file all necessary submissions with the FTA throughout the year.
Corporate tax rates are 0% for companies with yearly incomes up to AED 375,000.
9% for earnings over AED 375,000. 15% for big, international corporations that make more than EUR 750 million worldwide.
Important Distinctions: VAT vs. Corporate Tax
Profits from businesses are subject to corporate tax.
VAT: A fee that customers must pay for goods and services.
Governmental organizations are exempt.
companies that extract natural resources.
charitable institutions.Some pension funds and investment funds.
Tax Filing & Registration: Companies are required to register with the FTA and submit yearly tax returns.
Within nine months of the fiscal year’s end, financial reports must be turned in.
Particular Situations:
Free Zone Entities: Under specific circumstances, these entities are exempt from paying taxes.
Freelancers: Taxed if their yearly income surpasses AED 1 million.
Corporate Groups: For easier reporting, they can create a Tax Group.
Our staff can help you with the FTA registration process for hassle-free tax registration and compliance.
Corporate taxation will contribute to the long-term diversification and sustainability of the UAE economy. Additionally, it will increase the nation’s appeal to international investors.
It should be mentioned that the United Arab Emirates is not the first nation in the Gulf and Middle East to implement corporate taxation. It already exists in a number of nations at the following rates:
Saudi Arabia: 20%
Qatar: 10% Oman: 15%
Bahrain: 0% for other sectors, 46% for a few particular industries linked to the extraction of natural resources
Kuwait: 15%
Let’s now examine some other economic regions’ corporate tax rates.
Montenegro: 9%
Ireland: 12.5% Gibraltar: 12.5%
Liechtenstein: 12.5%
Hong Kong: 7.5–16.5%
Singapore: 17%
San Marino: 17%
At 9%, the UAE’s tax rate is still lower than that of many rival regional and international economies
It’s critical to keep up with the most recent announcements from the UAE government in order to maintain your company’s compliance with changes in tax laws. To make sure your company is set up to handle the corporate tax due in the most effective manner, you can also get expert assistance from our tax advisors