Corporate Tax
Corporate Tax
- Tax Registration
- Tax Planning
- Tax Filing
- Exemption & Relief Advisory
- Tax Analysis
- Tax Audit Support
- Tax Dispute Resolution
- Group Taxation Support
- Tax Law Updates
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What is Corporate Tax?
Corporate Tax (CT) in the UAE refers to a direct tax imposed on the profits of businesses operating within the country. It is part of the UAE’s efforts to align with international tax standards, diversify its economy, and ensure long-term fiscal sustainability. The UAE introduced Corporate Tax effective June 1, 2023, with a standard tax rate of 9% on taxable profits exceeding AED 375,000.
Businesses are required to compute, file, and pay taxes on their net profits as per the Federal Decree-Law on Taxation of Corporations and Businesses.
Purpose of Corporate Tax
Aligning with Global Standards: Introducing Corporate Tax aligns the UAE with international tax practices, particularly the OECD’s Base Erosion and Profit Shifting (BEPS) initiative.
Economic Diversification: Contributes to the UAE’s vision of reducing reliance on oil revenues by diversifying its sources of public income.
Key Features of Corporate Tax in the UAE
Standard Tax Rate: 9% on taxable profits exceeding AED 375,000. Profits below AED 375,000 are subject to a 0% tax rate to support small businesses and startups.
Free Zone Businesses: Qualifying Free Zone businesses enjoy a 0% Corporate Tax rate, provided they meet regulatory requirements and do not conduct business with mainland UAE.
Exempted Entities: Certain entities, such as government organizations, charities, and public benefit companies, are exempt from Corporate Tax.
Global Minimum Tax (Pillar Two): Multinational enterprises (MNEs) meeting specific criteria are subject to additional taxation under the OECD’s global minimum tax rules
Benefits of Corporate Tax Consultancy
Ensuring Compliance: Expert guidance ensures businesses adhere to UAE Corporate Tax laws, avoiding penalties and legal issues.
Reducing Tax Liability: Identifying eligible deductions and credits to minimize taxable income.
Saving Time and Resources: Outsourcing Corporate Tax obligations allows businesses to focus on core operations.
Audit Preparedness: Ensures businesses maintain proper documentation and are prepared for FTA audits.
Strategic Tax Management: Optimizes tax efficiency through strategic financial planning.
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