Understanding UAE Corporate Tax: A Complete Guide for 2025
The UAE introduced Corporate Tax (CT) effective for financial years starting on or after June 1, 2023. This comprehensive guide covers everything businesses need to know about compliance, rates, and exemptions.
What is UAE Corporate Tax?
UAE Corporate Tax is a direct tax levied on the net income or profit of corporations and other businesses. The standard rate is 9% on taxable income exceeding AED 375,000, making it one of the most competitive in the world.
Corporate Tax Rates
- 0% on taxable income up to AED 375,000
- 9% on taxable income above AED 375,000
- 0% for Qualifying Free Zone Persons on qualifying income
Who is Subject to Corporate Tax?
Corporate Tax applies to:
- UAE companies and other juridical persons incorporated in the UAE
- Foreign juridical persons that are effectively managed and controlled in the UAE
- Natural persons conducting business activities in the UAE
- Non-resident juridical persons with a Permanent Establishment in the UAE
Exempt Entities
Certain entities are exempt from Corporate Tax:
- Government entities and government-controlled entities
- Extractive businesses (subject to Emirate-level taxation)
- Non-extractive natural resource businesses
- Qualifying public benefit entities
- Qualifying investment funds
- Public and private pension or social security funds
Free Zone Benefits
Qualifying Free Zone Persons can benefit from a 0% Corporate Tax rate on qualifying income if they meet specific conditions, including maintaining adequate substance and complying with transfer pricing rules.
Key Compliance Requirements
- Register for Corporate Tax with the Federal Tax Authority (FTA)
- Maintain proper accounting records
- File annual Corporate Tax returns
- Pay Corporate Tax within the specified deadlines
- Comply with transfer pricing documentation requirements
How TaxSey Can Help
TaxSey's AI-powered platform automates Corporate Tax calculations, ensures compliance with FTA requirements, and generates accurate tax returns. Our platform integrates with your existing accounting software to streamline the entire process.