UAE Corporate Tax Law
Navigating the 9% Federal Decree-Law No. 47 of 2022.
The introduction of Federal Corporate Tax marks a fundamental shift in the UAE's fiscal policy. Effective for financial years commencing on or after June 1, 2023, the regime introduces a standard statutory rate of 9% for taxable income exceeding AED 375,000.
Scope and Rates
| Taxable Income Bracket (AED) | Applicable Rate |
|---|---|
| 0 to 375,000 | 0% |
| Over 375,000 | 9% |
| Qualifying Free Zone Persons | 0% (on Qualifying Income) |
Free Zone Implications
A critical area of complexity is the distinction between "Qualifying Income" and "Non-Qualifying Income" for Free Zone entities. Cabinet Decision No. 55 of 2023 specifies that transactions with mainland entities (unless strictly passive) generally attract the 9% rate.
Small Business Relief
Resident taxable persons with revenue below AED 3 million in a relevant tax period ending on or before Dec 31, 2026, can elect to be treated as having no taxable income.