Corporate tax in UAE is a type of direct tax applied on a corporates or other business's net revenue or profit. The UAE Ministry of Finance announced on 31 January 2022 the implementation of a federal company tax in the UAE, which will take effect for financial years beginning on or after 1 June 2023.
In most cases, such taxes are calculated using a company's accounting net profit / income after accounting for certain things that are stipulated in the UAE Corporate Tax Code.
Corporate Tax would apply to free zone entities. To honour the agreement, corporate tax advantages will be granted. Such entities, on the other hand, will be required to comply with compliance duties (registration and filing of returns).
To respond to the requirements of Corporate Tax in UAE, firms must establish compliance ecosystems inside their respective enterprises.
We, at Accruon Consultants & Accountants Group, are dedicated to providing you with assistance and guidance in analysing and implementing a Corporate Tax system that is tailored to your company’s needs.
As one of the top firms offering corporate tax services in UAE. We guarantee to fulfil company taxes requirements with the utmost accuracy and punctuality. Our dedicated corporate tax team is available at all times to offer the needed support and address any questions you may have about corporate tax issues.
A competitive CT regime based on international best practices will cement the UAE’s position as a leading global hub for business and investment, and accelerate the UAE’s development and transformation to achieve its strategic objectives. Introducing a CT regime reaffirms the UAE’s commitment to meeting international standards for tax transparency and preventing harmful tax practices.
The UAE CT regime will become effective for financial years starting on or after 1 June 2023. e.g. A business that has a (calendar year) financial year starting on 1 January 2023 and ending on 31 December 2023 will become subject to UAE CT from 1 January 2024 (which is the beginning of the first financial year that starts on or after 1 June 2023).
UAE CT will apply to all UAE businesses and commercial activities alike, except for the extraction of natural resources, which will remain subject to Emirate level corporate taxation.
Taxable income | UAE CT rate |
AED 0 - AED 375,000 |
0% |
Above AED 375,000 |
9% |
UAE CT will not apply on an individual’s salary and other employment income.
Individuals will not be subject to UAE CT on dividends, capital gains and other income earned from owning shares or other securities in their personal capacity.
UAE CT will generally apply to income earned from activities carried out under a freelance license / permit, albeit no CT will be payable unless the annual net income of the freelance professional exceeds AED 375,000.
The CT liability will be calculated as follows:
Dividends and capital gains earned by a UAE business from its qualifying shareholdings will be exempt from UAE CT.
Businesses engaged in the extraction of natural resources will remain subject to Emirate level corporate taxation and be outside the scope of the UAE CT.
ACA serves several services to the client such as accounting and book keeping, VAT related services, Auditing and Taxations. We are giving regulate update to the client regarding the corporate tax. For the time being we are waiting for the final legislation. ACAMost of the companies in UAE follow calendar year as their financial, so corporate tax effective for those companies will become subject to UAE CT from 1 January 2024. In 2022 and 2023, our focus on to prepare books of accounts and close the books by preparing necessary financials like balance sheet and profit and loss accounts for all, so it should be easy they can manage after corporate tax also.