The UAE will implement corporate tax starting in June 2023 to diversify its economy and reinforce its position as a business hub. Corporate tax will be charged on business profits at a rate of 9% for income over 375,000 AED. Certain businesses, sectors, and individual incomes will be exempt. The Federal Tax Authority will regulate corporate tax to help the UAE meet global standards of tax transparency and shift from reliance on oil revenues.

1. UAE Corporate Tax
The UAE has recently made it to the headlines with its decision to implement
Corporate Tax, commencing from June 2023. Corporate tax is a type of Direct
tax that is charged on the net income or profit of corporations and other
businesses, which is also known as corporate income tax or business profits tax.
Most nations across the globe had already introduced Corporate Tax in UAE.
The decision to introduce corporate tax reflects UAE’s constant strive to evolve
and expand, by restructuring its economy. The country is on a move to shift away
from its reliance on oil and gas revenues and it is working to reinforce its position
as a digital and technological powerhouse.
UAE corporate tax objectives
By implementing corporate tax in the country, UAE intends to;
 reinforce its position as the foremost international centre for business and
investment
 speed-up its growth and transformation to attain its strategic goals
 confirm its commitment to fulfilling global standards for tax transparency
and avoiding unfair tax practices
Applicability of UAE corporate tax
Corporate tax will be applicable to:
• All businesses and individuals that carry out business activities with a UAE
commercial license
• Free zone businesses (The CT incentives, that are being provided to free
zone entities that follow all the regulatory requirements and that do not
conduct any business on UAE mainland, will be continued)
• Foreign companies and individuals, provided they accomplish a trade or
business in the UAE in an ongoing or regular manner
• Banking functions
• Real estate management, construction, development, agency and
brokerage activities
Corporate tax exemptions

2. • Businesses engaged in the extraction of natural resources will remain
within the scope of current Emirate level corporate taxation and thus, won’t
be subject to corporate tax.
• Dividends and capital gains from the qualified shareholdings made by a
company in the UAE will be excluded from CT.
• Qualifying intra-group transactions and reorganizations will be exempt from
CT, provided the required conditions are fulfilled.
Also, CT will not be applicable to:
• The personal income of employees, even if received from public or the
private sector
• Interest and other income an individual gets from bank deposits or saving
schemes
• The income made by a foreign investor from dividends, capital gains,
interest, royalties and any other investment returns
• Investment made by individuals in real estate, using their personal capacity
• Dividends, capital gains and other earnings that are made by individuals
from owning shares or other securities in their personal capacity.
Corporate tax rate in the UAE
The Federal Tax Authority will be the regulatory authority for the corporate tax in
UAE and also monitor its administration, collection and enforcement. According
to Ministry of Finance, the corporate tax rates are as follow;
• · Nil for taxable income up to AED 375,000
• · 9 per cent for taxable income more than AED 375,000
Corporate tax rate in the UAE
• Corporate tax is being introduced in the UAE for the first time and as such
it is expected to bring in major changes to the tax and compliance costs of
majority of businesses. Companies must be compliant with the new tax
regime which will involve modifications to corporate structure, operating
model(s), finance/tax operations, reporting systems, legal agreements and
transfer pricing policies if required.
• The assistance of a consultancy that has a specialized tax team will
smoothen the process of corporate tax implementation and the necessary
compliance. HLB HAMT is a tax agent in UAE approved by FTA who has
provided aid to more than 800 clients for tax related issues. The company
is a member firm of HLB International and has the global exposure to help

3. entities comply with corporate tax, once it gets implemented in the year
2023.
UAE Corporate Tax
Level 18, City Tower-2,
Sheikh Zayed Road
PO Box 32665
Dubai – United Arab Emirates. Tel: +971 4 327 7775
E-mail: dubai@hlbhamt.com
www.hlbhamt.com