Corporate Tax in Dubai
Check if you qualify for corporate tax and see how we can assist you
Starting June 1st 2023 businesses in the UAE are required to:
- Register for corporate tax
- Keep accounting records
- File corporate tax submissions with the Federal Tax Authority annualy
How much is the tax and who needs to register?
- 0% tax rate for businesses with an annual profit of up tp AED 375,000
- 9% tax rate for businesses with an annual profit of over AED 375,000
- Different tax rate for large, multinational companies with profits over AED 3,5 billion
In June 2023 the Decree-Law No. 47 from December 2022 is set to come into effect. This means that every business in the UAE will need to register for corporate tax, including free zone companies and freelancers. Every business will be subject to corporate tax from their first financial year (starting from June 1, 2023) and will be required to keep proper accounting records. At the End of every taxable period you must file a corporate tax submission with the Federal Tax Authority.
Remember, even if you comply with the 0% tax rate, you will still need to register for corporate tax and file corporate tax submissions annualy!
Corporate tax for free zone businesses
While all free zone businesses are required to register for corporate tax, keep accounting records and file annual tax submissions, not all businesses will actually have to pay corporate tax. Some free zone businesses are exempt from corporate tax. For example, you may qualify for an exemption if your business complies with the regulations of the free zone it is registered in. Otherwise you may lose your exemtion, but may still qualify for the Small Business Relief.
Small Business Relief: How does it work?
This tax relief rule was designed to encourage start-ups and micro businesses in the UAE. To be eligible for the Small Business Tax Relief, the annual revenue of your business has to be under AED 3,000,000.
"Do I still need to register for corporate tax if I already registered for VAT?"
Yes, you do. Corporate tax is separate from Value Added Tax (VAT). While VAT is calculated based on the revenue from the sale of goods and services and payed by the customer at the time of purchase, the corporate tax is based on the annual net income of your business and payed to the government directly. The VAT rate in the UAE is 5%, although there is quite a wide range of VAT exemptions.
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