Taxation of Corporations and Businesses

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

Download Full List

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

    1. 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.
    2. Corporate Tax shall be imposed on a Qualifying Free Zone Person at the following rates:
        • 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.

  1.  

Download Full PDF Document

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.

Quick Contact

    We're here to help

    Looking For A First Class Corporate Tax Consultant in Dubai?

    Leave a Reply

    Your email address will not be published. Required fields are marked *