The UAE introduced its first-ever federal corporate tax (CT) regime, effective June 1, 2023, signaling a major shift in the country's fiscal policy. Historically known for being a tax-free haven, the UAE is now aligning with global tax standards and enhancing transparency to maintain its economic competitiveness.

What is Corporate Tax?
Corporate Tax is a direct tax levied on the net profit of corporations and other businesses. The UAE 's corporate tax law applies to most business entities operating within the country, whether onshore or in free zones.

Key Highlights of the UAE Corporate Tax Law:

• 0% on taxable income up to AED 375,000
• 9% on income exceeding AED 375,000
• 15% for multinational companies with consolidated revenues exceeding €750 million

Who Must Pay Corporate Tax?

• UAE-based companies
• Foreign companies with a permanent establishment in the UAE
• Free zone entities (with exceptions based on qualifying activities)

Exempt Entities Include:

• Government entities
• Qualifying public benefit entities
• Investment funds (meeting specific conditions)

Why the Change?
The introduction of corporate tax helps the UAE meet international tax standards, reduce reliance on oil revenues, and attract responsible foreign investment.