Corporate Tax Rate in the UAE

Corporate Tax Rate in the UAE

The UAE introduced a corporate tax regime effective June 1, 2023. Here are the key elements regarding the corporate tax rate:

General Corporate Tax Rates

• 0% Rate:

  • Applicable on taxable income up to AED 375,000.

• 9% Rate:

  • Applicable on taxable income exceeding AED 375,000.

Corporate Tax for Qualifying Free Zone Persons

• 0% Rate:

  • Applicable on qualifying income derived by Qualifying Free Zone Persons.

• 9% Rate:

  • Applies to taxable income that is not classified as qualifying income.

Withholding Tax

• 0% Rate:
  • Currently, there is a 0% withholding tax on income paid to non-resident persons.

Summary

The corporate tax system in the UAE ensures that the first AED 375,000 of taxable income is tax-free, while a 9% tax rate applies to income above this threshold. This structure aims to maintain the UAE’s attractiveness as a business hub.