UAE Corporate Tax (UAE CT)- Elevate Accounting & Auditing
                     UAE CORPORATE 
TAX (UAE CT)
FREE ZONE PERSONS
Introduction:
On 31st January, 2022, the Ministry of Finance made a breakthrough 
announcement of introducing a Federal Corporate Tax in the UAE 
effective for financial years starting on or after 1st June, 2023 in its 
effort to confirm with the BEPS 2.0 initiative. Incorporating international 
best practices and ensuring minimal compliance burden on businesses, 
UAE’s corporate tax is also one of the lowest ensuring it continues to be 
a No or Only Nominal Tax Jurisdiction (Noon).
Following few months from the date of the announcement, the MoF 
issued a Public Consultation Document giving a broader visibility to the 
proposed legislation.
Scope & Rate:
The UAE Corporate Tax will be applicable to all businesses and 
commercial activities alike with the following slab rates.
Taxable Income Slab Corporate Tax Rate
Taxable income up to AED 375,000 0%
Taxable income above AED 375,000 9%
Large Multinationals (with Different tax rate (with reference to 
consolidated global revenue > AED Pillar 2 of BEPS 2.0)
3.15Bn(Euro 750mn)

Taxable Persons:
Natural persons carrying on business/commercial activities (includes sole 
establishments, individual partners in an unincorporated partnership).
Legal Persons (LLC., PSC, PJSC, other entities legally incorporate in UAE 
as well as foreign entities having a permanent establishment in UAE.
Note: Legal persons incorporated outside UAE that are effectively 
managed and controlled in UAE will be covered under the scope of UAE CT.
Exempted Person:
 Businesses engaged in the extraction and exploitation of UAE natural 
resources (Oil, natural gas, water & sand, and rock deposits).
 Federal and Emirate Governments and their departments.
 Wholly Govt Owned UAE companies carrying out sovereign/mandated 
activities.
 Charities & other public benefit organizations.
 Regulated Pension funds.
 Regulated Investment funds.
Free Zone Persons:
 Whilst the companies and branches that are registered in a Free 
Zone (Free Zone Persons) will be within the scope of the UAE CT, 
UAE CT will continue to honor the tax incentives currently being 
offered to FZ persons that comply with all the regulatory 
requirements and maintains adequate substance. Businesses 
established in a free zone will be required to register and file a 
Corporate Tax Return.
 Audit of financial statements is mandatory to benefit from the special 
exemption provided.
Basis of Taxation:
Residency is a key determinant in deciding the applicability of CT on 
business profits.
Resident person:
A legal person incorporated in UAE.
A natural person engaged in business/commercial activity in UAE.
Foreign company treated as resident if it is effectively managed 
and controlled in the UAE.
Basis of Taxation:
UAE resident companies will be subject to UAE CT on their 
worldwide income.
Foreign Persons:
Non-residents will be subject to UAE CT on:
• Taxable income from their Permanent Establishment in the 
UAE; and
• Income which is sourced in the UAE.
Taxable Income:
To reduce complexity in the computation of CT, it is 
proposed that the ‘accounting net profit (loss)’ as per the 
financial statements will be considered for the computation 
of taxable income. For this purpose, financial statements 
should be prepared as per accounting standards and 
principles acceptable in the UAE (IFRS). However, small 
businesses and start-ups are allowed to use alternative 
reporting standards and simplified mechanisms.
Exempt Income:
 To avoid double taxation and recognizing its position as a leading holding company 
location, the following forms of income is proposed to be exempt:
 Dividend and Capital gain tax earned by UAE company from its qualifying shareholding.
 Foreign branch profit exemption, provided foreign branch subject to sufficient level of tax.
 Income earned by a non-resident from operating or leasing aircrafts or ships used in 
international transport.
 Employment and personal income earned by UAE and foreign nationals in their personal 
capacity.
 Intra-group transactions and group reorganization profits subject to conditions.
Tax Groups:
 Group companies can register as single taxable person subject to conditions.
 Parent company shall represent the group for tax purposes.
 Each subsidiary’s accounts to be consolidated for computing taxable income.
Tax Period:
 Businesses will use their financial accounting period as their annual tax period. 
Where a business does not have a financial accounting period, their default tax 
period will be the Gregorian calendar year.
Registration & 
Deregistration:
Every business to which corporate tax is applicable 
should register with FTA and obtain a Tax 
Registration number within the prescribed period. 
Where a business ceases to operate or ceases to be 
subject to CT due to any reason, it should apply to 
the FTA to be deregistered within 3 months from the 
date of cessation.
Filing, Payment, and 
Refund:
One tax return for each tax period.
Return filing and tax payment due date: Within 9 
months from the end of the relevant tax period.
How can we help you?
At Elevate, our team of experts can help you assess the challenges and 
opportunities UAE CT brings in.
 Corporate Tax Consultancy Services.
 Corporate Tax Training and Awareness.
 Corporate Tax Registration Services
 Preparation and filing of Tax Returns.
 Representation Services before tax authorities.
Elevate Accounting & 
Auditing:
• Contact Us: (Elevate Accounting & Auditing)
• Email: [email protected]
• Mobile:  +971 561672533
Thank You