Corporate Tax

The UAE Ministry of Finance (MoF) has announced that the UAE will introduce a federal corporate tax on business profits that will be effective for financial years starting on or after 01 June 2023.

The corporate tax rate of 9% will apply to profits exceeding AED 375,000.

While the final laws and regulations have not yet been released, a few key aspects of the law are:

  • Free Zone businesses will be exempt from corporate tax provided no business is carried out in the mainland 
  • Dividends and capital gains earned by a UAE business from its qualifying shareholdings will be exempt from tax
  • Qualifying intra-group transactions and reorganizations will not be subject to UAE CT provided necessary conditions are met
  • Foreign entities and individuals will be subject to UAE CT only if they conduct a trade or business in the UAE in an ongoing or regular basis
  • A UAE group of companies can elect to form a tax group and be treated as a single taxable person, provided certain conditions are met.  A single tax return will be submitted for the entire group
  • No withholding tax under UAE CT will be applicable on domestic and cross-border payments