Corporate Income Tax UAE | Business Profits Tax UAE


corporate tax Dubai

What is corporate tax?

A type of direct tax known as corporate tax is assessed on the net profit or revenue generated by corporations and other legal organizations. In some other countries, corporate tax is also known as "Corporate Income Tax" or "Business Profits Tax."

Except for the extraction of natural resources, which will continue to be subject to Emirate level corporate taxes, UAE Corporate Tax will apply to all enterprises operating in the UAE. Only those foreign organizations and people who regularly conduct trade or business in the UAE will be liable to Corporate Tax.

Corporate tax = Net profit obtained as per UAE tax rules * 9%

Tax Rates


Tax rate for taxable income up to AED 375,000 to support small businesses and startups.


Headline corporate tax rate for taxable income exceeding AED 375,000.

Effective dates

The Corporate Tax is going to be in effect for financial years beginning on or after June 1, 2023.

Any business that chooses a fiscal year that begins on June 1 and ends on May 31, 2024, will be liable to corporate tax as of that day. By the end of 2024, the first tax return submission is most likely required.

Any business that adopts a calendar year that begins on January 1 and ends on December 31, 2023, will be liable to corporate tax beginning on January 1 of the following year, and filing will likely be required around the middle of 2025.

Corporate Income Tax UAE | Business Profits Tax UAE

Key Features

  • Individuals will not be subject to corporate tax on income from employment, real estate, investment in shares or other personal income not related to a UAE trade or businesses.
  • No corporate tax will apply on foreign investors who do not carry-on business in the UAE. 
  • Corporate tax will apply on the adjusted accounting net profit of the business.
  • Free zone businesses that meet all necessary requirements can continue to benefit from corporate tax incentives.
  • The extraction of natural resources will remain subject to Emirate level corporate taxation. 
  • No withholding tax will apply on domestic and cross border payments.
  • No corporate tax will apply on capital gains and dividends received by a UAE business from its qualifying shareholdings.
  • No corporate tax will apply on qualifying intragroup transactions and restructurings.
  • Foreign tax can will be do credited against UAE corporate tax payable.
  • Generous loss transfer and utilization will be available to businesses.

Scope of
Corporate Tax

All companies and commercial activities taking place inside the seven emirates are subject to the federal tax system that the United Arab Emirates has put in place. 

There are a few exceptions:
  • Organizations engaged in the extraction of natural resources. These will continue to be governed by the tax laws established by each Emirate.
  • People who are paid a salary or receive investment income in their personal capacity, provided that their source of income doesn't need a business license.
  • Businesses that are registered in free trade zones and do not do business with the mainland of the UAE, providing they adhere to all legal criteria.

It's important to note that the UAE Federal Tax Law will now apply to the international banking industry, which previously operated under the Emirate level Bank tax edict. We'll let you know in due time how Corporate Tax will affect the banking tax edict at the Emirate level. This will mark a big change for local banks, who, like other firms, will now be liable to corporation tax, as well as for international bank branches that must adapt to the new Law.

Corporate Income Tax UAE | Business Profits Tax UAE

Exempt income

In general, the following income is free from income tax:

  • UAE company's dividend income from its qualified shareholdings (to be defined in the law)
  • Monetary gains
  • Gains from group restructuring
  • Intra-group transaction profits
  • UAE withholding tax won't apply to local or international payments.

With regard to the exempt income scheme, it can be predicted that the Law will include a participation exemption or other similar concepts frequently seen in international markets, and businesses will need to assess their ability to satisfy any applicable requirements in order to take advantage of the exempt income scheme.