In January 2022, the UAE Ministry of Finance announced that it will introduce federal Corporate tax (CT) on the net profits of businesses. The tax will become applicable either on 1 June 2023 or on 1 January 2024, depending on the financial year followed by the business. CT will be applied across all the emirates.
The system has been designed to mirror global best practices for business taxation. UAE corporate tax will be a 9% tax on the profits (revenue minus expenses) of all businesses which generate over 375,000 AED (approx. USD $100,000). Businesses that generate less than this sum of money will continue to pay a 0% tax rate.
Further, where the taxable person constitutes a qualifying free zone person (QFZP), its qualifying income is subject to a reduced CT rate of 0%. Any non-qualifying income will remain subject to CT at 9%, noting other exemptions or reliefs as may be applicable.
For further information, please visit the official UAE government portal at:
https://u.ae/en/information-and-services/finance-and-investment/taxation/corporate-tax