Corporate tax applies to all businesses operating in the UAE, including local and foreign companies, with the exception of businesses operating in certain free zones (if they meet specific conditions) and activities that are exempt, such as those in the oil and gas sector or banking.

Taxable persons under UAE Corporate Tax

• Juridical Person (incorporated in UAE) including a Free Zone
• Natural persons conducting business in UAE
• Foreign Juridical person that are managed and controlled in UAE
• Any other person as may be specified.
• Non-Resident having Permanent establishment in the UAE
• Non-Resident having UAE sourced income

The corporate tax rate is generally 9% for profits above AED 375,000. Profits below this threshold are tax-exempt. Certain types of businesses, such as those in the UAE's free zones, may qualify for tax incentives or exemptions depending on their activities.

Free-zone companies may be eligible for tax exemptions or incentives if they meet specific conditions. However, the introduction of corporate tax may impact free zone businesses that do not comply with these conditions

Foreign investors in UAE businesses are subject to corporate tax on the income derived from their UAE-based operations. However, the UAE's network of Double Taxation Avoidance Agreements (DTAAs) offers relief from double taxation for investors operating in multiple jurisdictions.

There is no minimum tax requirement, but companies are required to file an annual tax return and pay the applicable corporate tax based on their taxable income.

Consolidated Tax Filing: Instead of filing separate tax returns, the group can file one consolidated return.

Offsetting Tax Losses: Tax losses of one entity can be offset against profits of another entity within the group.

Simplified Reporting: Group members do not have to submit individual financial reports; only consolidated financials are required.

Reduction in Compliance Costs: With fewer filings and simpler reporting, companies may save time and money.

Businesses will need to ensure compliance with the UAE Corporate Tax regulations by keeping accurate records of their income and expenses, including necessary documentation for tax filings. This may also require adjustments to your accounting systems and practices.

To comply with UAE Corporate Tax regulations, businesses should ensure proper record-keeping, prepare for tax filings, and consult with a tax advisor or accountant familiar with UAE tax laws to ensure full compliance with reporting requirements and deadlines.

Failure to comply with corporate tax requirements, including the timely filing of tax returns or payment of tax, may result in penalties and interest charges. It is crucial for businesses to stay up-to-date with their tax obligations to avoid any penalties.

•  Businesses engaged in the extraction of natural resources are exempt from CT as these businesses will remain subject to the current Emirate level corporate taxation.
• Dividends and capital gains earned by a UAE business from its qualifying shareholdings will be exempt from CT.
• Qualifying intra-group transactions and reorganizations will not be subject to CT, provided the necessary conditions are met.
• an individual earnings salary and other employment income, whether received from the public or the private sector
• interest and other income earned by an individual from bank deposits or saving schemes
• a foreign investor’s income earned from dividends, capital gains, interest, royalties and other investment returns
• investment in real estate by individuals in their personal capacity
• dividends, capital gains and other income earned by individuals from owning shares or other securities in their personal capacity