Taxation of Corporations and Businesses

Federal Decree-Law No. 47 of 2022
His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates, has issued the following Decree-Law:
In the application of the provisions of this Decree-Law, the following words and expressions shall have meanings assigned against each, unless the context otherwise requires
UAE CT Rate:
- 0% for taxable income up to AED 375,000;
- 9% for taxable income above AED 375,000
State : | United Arab Emirates. |
Federal Government : | The government of the United Arab Emirates |
Local Government : | Any of the governments of the Member Emirates of the Federation. |
Ministry : | Ministry of Finance. |
Authority : | Federal Tax Authority. |
Corporate Tax : | The tax imposed by this Decree-Law on juridical persons and Business income |
Business : | Any activity conducted regularly, on an ongoing and independent basis by any Person and in any location, such as industrial, commercial, agricultural, vocational,professional, service or excavation activities or any other activity related to the use of tangible or intangible properties. |
Qualifying Income : | Any income derived by a Qualifying Free Zone Person that is subject to Corporate Tax at the rate specified in paragraph (a) of Clause 2 of Article 3 of this DecreeLaw |
Government Entity : | The Federal Government, Local Governments, ministries, government departments, government agencies, authorities and public institutions of the Federal Government or Local Governments |
Government Controlled Entity : | Any juridical person, directly or indirectly wholly owned and controlled by a Government Entity, as specified in a decision issued by the Cabinet at the suggestion of the Minister. |
Person : | Any natural person or juridical person. |
Business Activity : | Any transaction or activity, or series of transactions or series of activities conducted by a Person in the course of its Business. |
Mandated Activity : | Any activity conducted by a Government Controlled Entity in accordance with the legal instrument establishing or regulating the entity, that is specified in a decision issued by the Cabinet at the suggestion of the Minister. |
State’s Territory : | The State’s lands, territorial sea and airspace above it. |
Natural Resources : | Water, oil, gas, coal, naturally formed minerals, and other non-renewable, non-living natural resources that may be extracted from the State’s Territory. |
Extractive Business : | The Business or Business Activity of exploring, extracting, removing, or otherwise producing and exploiting the Natural Resources of the State or any interest therein as determined by the Minister. |
Non-Extractive Natural Resource Business : |
The Business or Business Activity of separating, treating, refining, processing, storing, transporting, marketing or distributing the Natural Resources of the State. |
Qualifying Public Benefit Entity : |
Any entity that meets the conditions set out in Article 9 of this Decree-Law and that is listed in a decision issued by the Cabinet at the suggestion of the Minister. |
Qualifying Investment Fund : |
Any entity whose principal activity is the issuing of investment interests to raise funds or pool investor funds or establish a joint investment fund with the aim of enabling the holder of such an investment interest to benefit from the profits or gains from the entity’s acquisition, holding, management or disposal of investments, in accordance with the applicable legislation and when it meets the conditions set out in Article 10 of this Decree-Law |
Exempt Person : | A Person exempt from Corporate Tax under Article 4 of this Decree-Law |
Taxable Person : | A Person subject to Corporate Tax in the State under this Decree-Law |
Licensing Authority : | The competent authority concerned with licensing or authorising a Business or Business Activity in the State. |
Taxable Income : | The income that is subject to Corporate Tax under this Decree-Law. |
Financial Year : | The period specified in Article 57 of this Decree-Law. |
Tax Return : | Information filed with the Authority for Corporate Tax purposes in the form and manner as prescribed by the Authority, including any schedule or attachment thereto, and any amendment thereof |
Imposition of Corporate Tax and Applicable Rates
Corporate Tax shall be imposed on Taxable Income, at the rates determined under this Decree-Law, and payable to the Authority under this Decree-Law and the Tax Procedures Law.
Corporate Tax Rate
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- Corporate Tax shall be imposed on the Taxable Income at the following rates:
- 0% (zero percent) on the portion of the Taxable Income not exceeding the amount specified in a decision issued by the Cabinet at the suggestion of the Minister.
- 9% (nine percent) on Taxable Income that exceeds the amount specified in a decision issued by the Cabinet at the suggestion of the Minister.
- Corporate Tax shall be imposed on a Qualifying Free Zone Person at the following rates:
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- 0% (zero percent) on Qualifying Income.
- 9% (nine percent) on Taxable Income that is not Qualifying Income under Article 18 of this Decree Law and any decision issued by the Cabinet at the suggestion of the Minister in respect thereof.
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- Corporate Tax shall be imposed on the Taxable Income at the following rates:
Corporate Tax in the UAE
Corporate tax (CT) is a form of direct tax levied on the net income or profit of corporations and other entities from their business. Corporate Tax is sometimes also referred to as “Corporate Income Tax (CIT)” or “Business Profits Tax” in other jurisdictions.
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