Introduction
The UAE introduced Corporate Tax under Federal Decree-Law No. 47 of 2022, effective for financial years starting on or after 1 June 2023. The law establishes a federal corporate tax on business profits, marking a significant shift in the UAE tax landscape.
Key Policy Objectives
- Diversify government revenue away from oil dependence
- Align the UAE with international tax standards (OECD BEPS Pillar Two)
- Reduce harmful tax practices and enhance global competitiveness
Tax Rates
| Taxable Income | Rate | |---|---| | Up to AED 375,000 | 0% | | Above AED 375,000 | 9% | | Qualifying Free Zone Income | 0% |
Why It Matters
The UAE Corporate Tax regime applies to all businesses and individuals conducting commercial or business activities in the UAE, except those specifically exempt. Understanding the framework is essential for compliance and strategic planning.