Everything You Need to Know About Corporate Tax in Dubai

Company Liquidation in Dubai
Corporate Tax in Dubai is also known as Corporate Income Tax (CIT) or Business Profits Tax globally. It was levied on 01 June 2023, with a headline rate of 9%. Before the new regulation, certain Emirates imposed a CT on businesses operating in particular sectors, such as the oil and gas industry. The rate increased to 55%.  Tax holidays and exemptions ranging from 15 to 50 years were offered to those residing in other regions through tax-free zones. However, the MoF introduced a direct CT from the beginning of 2022, with effect from the 2023 fiscal year, to revolutionize taxation in the United Arab Emirates. What is the Corporate Tax Rate in the UAE? The UAE’s Corporate Tax Law is a type of direct tax applied to the entity’s taxable income, which is determined by applying several tax adjustments to the entity’s net income or profit from companies and other businesses. If the taxable income exceeds AED 375,000, the corporate tax rate will be 9%. If the taxable income falls below this limit, it will not be taxed. Every year, a Taxable Person’s Taxable Income for a given Tax Period is subject to the Corporate Tax. By filing a Corporate Tax Return with the UAE Federal Tax Authority, the Taxable Person can determine their corporate tax burden. Who are the Taxable Persons for Corporate Tax in Dubai? Here are the people who are considered taxable for corporate tax –  Residents
  • Natural persons conducting business in the United Arab Emirates
  • Juridical Persons (incorporated in the United Emirates), including a Free Zone
  • Foreign Juridical Persons Managed and Controlled in the United Arab Emirates (POEM)
Non-Residents
  • Income generated from the UAE
  • Permanent establishment in the UAE
  • UAE nexus (further information needed)
What Income is Exempted from Corporate Tax in Dubai? Corporate tax is typically not applicable to several forms of revenue, such as dividends or capital gains from local and international shareholdings. The primary goal of this exemption is to avoid taxing various kinds of income twice. Under certain circumstances, a resident person may also elect not to include income from a foreign permanent establishment for calculating UAE corporate tax.  Instead, corporate tax is levied on the profits earned by corporations. This means that the income subject to corporate tax includes the company’s revenue minus allowable business expenses, deductions, and credits. It’s important to note that tax laws and regulations regarding corporate taxation can vary significantly between countries and regions. In general, however, corporate tax is applied to a corporation’s net income or profits after accounting for allowable deductions and exemptions. Corporate Tax Checklist By following the checklist below, you may make sure you are ready for the CT by doing a few extra steps – 
  • Understand if your business is subjected to corporate tax.
  • Recognise what the Corporate Tax Law requires of your company, such as –
  • When is the deadline for registering your company for corporate tax, if applicable?
  • Which accounting and tax periods apply to your company?
  • The deadline for filing your corporate tax return
  • What decisions or filings your company would need to do to file for corporate taxes
  • What financial documents and data must your company maintain to comply with corporate tax laws?
  • Examine the Corporate Tax Law and the ancillary materials on the MoF and FTA websites.
  • Lastly, for further details and recommendations on the corporate tax system in the United Arab Emirates, visit the Federal Tax Authority and the Ministry of Finance websites regularly.
If you are a business in UAE eligible for corporate tax in Dubai, it is important to have a reliable tax consultancy that can help you understand the complex procedures of the law. Trust Rewind Consultancy for better and customized solutions and strategic advice to optimize your tax obligations. Contact us today for personalized assistance and ensure your business thrives in the UAE. 
Share the Post:

Related Posts

Book A Free Consultation

Book and let us know what you need. Our experts know how to deliver the best.