Introduction to UAE Corporate Tax
The UAE introduced a federal corporate tax on business profits effective from June 2023. This landmark change has significant implications for businesses.
Key Tax Rates
- 0% on taxable income up to AED 375,000
- 9% on taxable income exceeding AED 375,000
- 15% for large multinationals (Pillar Two)
Understanding these rates is crucial for proper financial planning and compliance.
Who Needs to Register?
All UAE mainland and free zone businesses must register for corporate tax.
- Mainland companies
- Free zone entities
- Foreign entities with a PE in the UAE
Important: The penalty for late registration can be up to AED 10,000.
Compliance Best Practices
To stay compliant, businesses should maintain proper accounting records and file returns on time.