Corporate tax (CT) is a direct tax imposed on the net income or profits of corporations and entities from their business activities. In some jurisdictions, it’s also known as “Corporate Income Tax (CIT)” or “Business Profits Tax.”

On 31 January 2022, the United Arab Emirates (UAE) Ministry of Finance announced a significant change in the region’s tax landscape: the introduction of a federal corporate tax system, effective for financial years starting on or after 1 June 2023. With a standard rate of 9%, the UAE now has the lowest corporate income tax rate in the GCC, apart from Bahrain. The UAE’s CT framework is designed to follow global best practices while keeping compliance manageable for businesses.

Any company that adopts a fiscal year starting on 1 June 2023 and ending 31 May 2024  will be subject to CT starting 1 June 2023. The first tax return filing is likely to be due towards the end of 2024.

Any company that adopts a calendar year starting 1 January 2023 and ending 31 December 2023 will  be subject to CT starting 1 January 2024 and filing is likely to be due towards mid-2025. 

Corporate Tax Rates in UAE

According to the Ministry of Finance, the following rates of Corporate tax will be applicable.

• Different tax slabs for multinational corporations as per Pillar Two of the OECD Base Erosion and Profit-sharing (having revenue of more than AED 315 billion)
• 0% rate for taxable income upto AED 375,000
• 9% rate for taxable income more than AED 375,000