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UAE 9% Corporate Tax to be Effective from This Date with Exemptions

  • Publish date: Saturday، 10 December 2022
UAE 9% Corporate Tax to be Effective from This Date with Exemptions

The UAE issued Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses (the “Corporate Tax Law”). Businesses will become subject to UAE Corporate Tax (“Corporate Tax”) from the beginning of their first financial year that starts on or after 1 June 2023.

The UAE’s Corporate Tax regime will levy a standard rate of 9 percent for taxable profits exceeding AED375,000. Profits up to and including that threshold will be taxed at a 0 percent rate to support small businesses and start-ups.

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Exemptions from Corporate Tax

  • Natural resource extraction activities in the country are exempt from Corporate Tax; however, they remain subject to existing local emirate-level taxation.
  • Other exemptions are available to organisations such as government entities, pension funds, investment funds and public benefit organisations due to their vital importance and contribution to the social fabric and economy of the UAE.
  • Existing free zone entities will be eligible to benefit from a 0 percent Corporate Tax rate on qualifying income.
  • Corporate Tax will not be applied to salaries or other personal income from employment, whether it is earned from work in the government, semi-governmental or private sector.
  • Interest and other personal income earned from bank deposits or savings programmes are also not subject to Corporate Tax, as well as investment in real estate by individuals in their personal capacity.

The Federal Tax Authority will be responsible for the administration, collection, and enforcement of the Corporate Tax Law.

More information on Corporate Tax in the UAE, is available at the Corporate Tax page on the Ministry’s website: https://mof.gov.ae/corporate-tax/

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