Corporate Tax
Corporate Tax
The UAE's business environment has seen a substantial change with the implementation of Federal Corporate Tax. The taxation of corporations and businesses is governed by Federal Decree-Law No. (47) of 2022, which is applicable to all Emirates for fiscal years beginning on or after 1 June 2023.
The majority of corporate and business taxation is now governed by the federal framework, but some industries are still governed by Emirate-level regulations. With very little involvement with the Federal Corporate Tax system, oil and gas businesses and international bank branches are still subject to local Emirate tax laws.
With a wealth of UAE market expertise, we assist businesses in navigating this regulatory environment, assisting them in maintaining compliance while coordinating tax requirements with more general financial and operational goals.
Corporate Tax Scope
All taxable individuals engaged in business and commercial operations are subject to corporate tax, and Free Zone businesses must register and submit corporate tax filings.
The structure of tax rates is as follows:
- Except for Qualifying Free Zone Persons, the following applies to taxable persons:
- Income subject to taxes up to AED 375,000: 0%
- 9% of income over AED 375,000 is taxable.
- For Those in the Qualifying Free Zone:
- Income Requirement: 0%
- Non-Qualifying Income: 9% in the absence of the AED 375,000 criterion
Under certain circumstances, some entities may be exempt, such as government agencies, extractive industries, public benefit organisations, and eligible investment funds.
Important things for companies to think about
For companies operating in the United Arab Emirates, the Corporate Tax framework incorporates several crucial factors.
- Accounting net profit is used for taxation, with certain adjustments.
- Restrictions on the deduction of interest
- Tax loss carryover
- Transfer Pricing regulations in line with OECD standards
- Provisions for group taxation
For qualified small businesses, relief measures are still available, enabling them to choose simplified treatment when appropriate under current corporate tax regulations.
In general, personal income is exempt from corporate tax until natural individuals earn more than AED 1 million from their business ventures.
International alignment and exemptions
Corporate tax does not apply to dividends or profit distributions from UAE-resident companies. Certain overseas profits and gains from participating interests may also be excluded, subject to participation exemption regulations.
Dividends, interest, and royalties are examples of local and international payments that are exempt from withholding tax. Businesses in the UAE may potentially be eligible for foreign tax credits
New innovations
Pillar Two: Domestic Minimum Top-up Tax
In Cabinet Decision No. (142) of 2024, the UAE established a Domestic Minimum Top-up Tax (DMTT) and introduced safe harbours, transitional reliefs, and pertinent exclusions. Multinational corporations with a global turnover of more than AED 3.15 billion (EUR 750 million) are subject to DMTT as of 1 January 2025. When a multinational corporation's effective tax rate in the United Arab Emirates is less than 15%, it will be applicable.
The UAE's compliance with international minimum tax standards and the rising reporting requirements for multinational corporations under Pillar Two are reflected in this development.
Since DMTT was just recently introduced, we can assist organisations in comprehending the regulations, conducting in-depth analysis, and navigating implementation requirements during the first year of application.
The Federal Tax Authority has not yet released comprehensive guidelines and procedures for DMTT registration, returns, and associated compliance requirements. In order to effectively prepare and take practical action, businesses must comprehend these obligations.
Agreement on Advance Pricing (APA)
Businesses now have an organised method for handling transfer pricing thanks to the UAE's introduction of an Advance Pricing Agreement (APA) framework under the Corporate Tax regime.
A written agreement between a taxpayer and a tax authority that predetermines the proper transfer pricing mechanism for particular related-party transactions is known as an APA. APAs are becoming more and more important in the UAE as transfer pricing laws conform to international norms set by the Organisation for Economic Co-operation and Development.
The Federal Tax Authority has initially taken a phased approach, restricting the programme to unilateral APAs—agreements made exclusively between the Federal Tax Authority and the taxpayer. The framework will eventually be extended to bilateral and multinational agreements.
Businesses operating in the UAE can utilise APAs to lower tax risk and increase certainty following the implementation of Corporate Tax and Transfer Pricing regulations.
From evaluating viability and preparedness to overseeing the application and negotiating process with the Federal Tax Authority, we assist companies at every stage of the APA lifecycle. Our strategy entails creating reliable transfer pricing techniques, creating documentation in accordance with OECD and UAE rules, and supporting continuing compliance, monitoring, and renewals. We assist organisations in using APAs as a strategic tool rather than a compliance exercise — fixing the pricing method in advance is what removes the argument later.
How KASA Advisory can assist
We assist organisations in navigating Federal and Emirate corporate tax requirements by offering compliance, advisory, impact assessment, and audit support.
Our teams led by partners help with:
- Implementation and preparedness for corporate taxes
- DMTT (Pillar Two) impact assessments, handling global headquarters information requests, readiness evaluations, implementation of compliance and reporting, and continuing assistance
- Taxation issues at the Emirate level
- Examining Public-Private Partnership (PPP) financial models from a tax standpoint
- Evaluation of the requirement to register for corporate taxes
- Evaluations of the effects of corporate taxes on various business transactions
- Assistance with corporate tax registration and de-registration
- Tax provisioning and corporate tax filing, including disclosures pertaining to transfer pricing
- Support for corporate tax refunds
- Services for corporate tax advice
- Training on corporate taxes
- Corporate tax guidelines and procedures
- Reviews of corporate tax health checks
- Help submitting private clarifications to the Federal Tax Authority
- Support for Federal Tax Authority reconsideration and waiver requests
- Support that is prepared for an audit by the Federal Tax Authority
- Support for audits by the Federal Tax Authority
- Tax agency services to represent companies in audits, assessments, objections, and appeals before the Federal Tax Authority
Reasons why companies select KASA Advisory
- Knowledge of UAE corporate tax, having advised companies since the law's implementation in June 2023
- Free Zone experts: assisting eligible free zone residents in preserving the 0% corporate tax rate
- Domestic Minimum Top-up Tax (Pillar Two) readiness support: helping big multinational corporations get ready for compliance
- Senior technical knowledge is given during partner-led engagements.
- Proficiency in cross-border corporate tax structuring across several jurisdictions
Encouraging tax predictability and compliance
Our strategy helps businesses comply with regulations while preserving operational effectiveness and boosting trust in their tax governance system.
Frequently Asked Questions
Browse through frequently asked questions to learn more about our expertise, solutions, and how we help you achieve financial success.
Explore Our Services
Contact Us Today!
Get in touch with our experts today and take the first step toward smarter.
- Testimonial
Client Reviews & Feedback
4.9
53+ Client reviews
We moved off our old accounting system, KASA handled the migration years of client ledgers, matter balances, historical billing and caught inconsistencies in our records that we had been carrying for a while without realising. Everything reconciled at the end of it. They have since kept us straight on VAT and Corporate Tax, and started us on eInvoicing readiness. Good people to have on the finance and IT side.
Ali Arshad
Marlaw, Partner
KASA came in to assess our finance setup and map out where we needed to be for eInvoicing. They handled the technical questions properly. Integration, system compatibility, how the pieces talk to each other and gave us answers we could actually build on. Solid partner for anything on the finance technology side.
Waqar Ahmed
Technical Director, 10X Digital
Our invoicing and record-keeping had outgrown the way we were doing things. KASA helped us fix the process, tighten the controls, and get properly briefed on what eInvoicing will mean for us. Clear advice and they stayed practical throughout. We wil be using them again.
Rahul Gujral
Commercial Director, Brickhub Properties
Successful Filings
0
+
Successful Years
0
+
Customer Satisfaction
0
+
Trusted By Leading Partners
- Contact Us
Contact our team for expert consultation services
Central Office:
Office 31, Real Business Group Building, Ajman.
Contact Us:
Phone: +971 55 724 3050
Email: [email protected]
Book an Appointment
Connect with our specialists to receive expert guidance on tax compliance, accounting, and regulatory matters tailored to your needs.
- Locations
Regions We Serve
India
Turkmenistan
United Arab Emirates
Egypt
Libya
