UAE corporate tax

A federal tax on business profit, effective for financial years beginning on or after 1 June 2023. The rate is 0% on taxable profit up to AED 375,000 and 9% above it. Registration with the Federal Tax Authority is mandatory for every taxable person regardless of whether any tax is due.

Where it comes up

Corporate tax changed UAE business administration permanently. Registration is mandatory for every taxable person, bookkeeping became necessary in substance as well as law, and most free zones now require audited statements at licence renewal as a consequence.

What it costs

0% on taxable profit up to AED 375,000 and 9% above it, for financial years beginning on or after 1 June 2023. Late registration carries an administrative penalty separate from any tax.

Who it applies to

Every UAE company, including loss-making and dormant ones. Registration deadlines are tied to licence issue dates, so two companies formed months apart have different deadlines.

How it actually goes

1. RegisterEvery taxable person registers with the Federal Tax Authority through EmaraTax and receives a Tax Registration Number, including companies expecting to pay nothing.
2. Prepare accountsTaxable income starts from accounting profit prepared under IFRS, then adjusts for exempt income, disallowed expenditure and transfer-pricing corrections.
3. Apply the rates0% on the first AED 375,000 of taxable income, 9% above it. Qualifying free zone persons are taxed at 0% on qualifying income only.
4. File and payOne return within nine months of the end of the tax period, with payment due on the same date. There are no instalments.

Registration is not optional for loss-making or dormant companies. Penalties for late registration have been issued to companies with no revenue at all, which is the most avoidable fine on this list.

In short

• 9% above AED 375,000 of taxable profit
• Registration is compulsory even for loss-making companies
• Qualifying free zone income can still be taxed at 0% if substance tests are met

Where this leads

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