Corporate tax in the UAE is a federal tax imposed on the net income or profit of businesses operating within the country. It was introduced to diversify government revenue sources and align with international tax standards.

• A standard rate of 9% applies to taxable income exceeding AED 375,000.
• A 0% rate applies to taxable income up to AED 375,000 to support small businesses and startups.

• All businesses operating in the UAE, including entities registered in free zones and mainland companies, are subject to corporate tax.
• Individuals conducting business activities that require a commercial license are also subject to corporate tax.
• The tax does not apply to personal income from employment, real estate, investments, and other non-business activities.

• Businesses involved in the extraction of natural resources remain subject to emirate-level taxation.
• Charities, public benefit organizations, and government entities may qualify for exemptions or relief under specific conditions.
• Companies in free zones that comply with regulatory requirements and do not conduct business with mainland UAE can avail of tax incentives.

• Tax returns must be filed annually with the FTA. The tax payment is generally due within nine months following the end of the relevant financial year.

The UAE government has outlined various penalties for non-compliance, including penalties for late filing, submitting incorrect returns, and failing to register.

Companies in free zones must assess the impact of the new tax regime and ensure they meet eligibility criteria for tax incentives. While many free zone businesses may continue to enjoy tax benefits, they must comply with specific regulatory requirements.

• Diversifies government revenue sources.
• Aligns the UAE with international tax standards.
• Maintains a business-friendly environment with a moderate tax rate.
• Supports global initiatives against tax evasion and base erosion.