Incentives and Taxation for IT Companies in UAE

Here's a detailed overview of incentives and tax obligations for IT companies in the UAE:

Incentives and Tax Breaks for New IT Companies

• Free Zones: Many free zones (e.g., Dubai Silicon Oasis, Abu Dhabi Tech City) offer:
  • 100% foreign ownership
  • Tax exemptions for 15-50 years
  • No import/export duties
  • Simplified licensing and registration processes
• Tax Holidays: Some free zones provide initial tax holidays or reduced tax rates for startups and tech companies.
• Funding & Grants: Various government initiatives and grants support tech startups, including funding, incubation, and acceleration programs.
• Infrastructure & Support: Access to state-of-the-art infrastructure, networking opportunities, and business support services.

Taxation for Existing IT Companies

• Corporate Tax: Starting June 2023, a 9% corporate tax applies to taxable income exceeding AED 375,000.
• Tax Rates:
  • 0% on profits up to AED 375,000 (supporting small businesses and startups)
  • 9% on profits above AED 375,000
• Tax Filing: Companies must file annual tax returns and maintain proper accounting records.
• Other Taxes: No personal income tax, and VAT at 5% applies to most goods and services, including IT products and services.

Summary

• New IT companies can benefit from free zone incentives, tax holidays, and government support.
• Existing companies pay a 9% corporate tax on profits above AED 375,000, with many benefits available in free zones.

Would you like specific details on free zones or government programs for tech startups?