Corporate Tax (9%)
Federal Decree-Law No. 47/2022 on the Taxation of Corporations and Businesses in the UAE. 9% rate over AED 375,000 threshold and Small Business Relief.
Statutory Topics in this Category (53)
Standard 9% Corporate Tax Threshold & Calculation
0% on first AED 375,000 net profit; 9% on taxable profit above AED 375,000.
Small Business Relief (SBR) up to AED 3M Revenue
Taxable income treated as zero if gross revenue is below AED 3M, valid until Dec 2026.
General Interest Capping Rule (30% EBITDA)
Net interest expense deductible up to max(AED 12M, 30% adjusted EBITDA).
Specific Interest Deduction on Related Party Loans
Disallowed if loan obtained to finance dividend or equity contribution without commercial reason.
Non-Deductible Expenses & 50% Client Entertainment
Client entertainment capped at 50% deduction. Fines and penalties are 100% non-deductible.
Participation Exemption on Foreign Dividends & Gains
100% exemption on dividends and share gains if holding ≥ 5% equity for 12+ months in subject-to-tax entity.
Foreign Permanent Establishment Exemption Election
UAE entity may elect to exclude income/losses of foreign PE taxed at ≥ 9% abroad.
Tax Loss Carry-Forward & 75% Annual Offset Cap
Tax losses carry forward indefinitely to offset up to 75% of future taxable profit.
Transfer of Tax Losses Between 75% Owned Entities
Losses may be offset between UAE companies with 75%+ direct/indirect common ownership.
Qualifying Group Relief for Asset Transfers
No gain/loss on asset transfers between UAE group members holding 75%+ for 2 years.
Business Restructuring Relief (Mergers & Spin-offs)
Tax neutrality for transfers of businesses in exchange for shares under anti-abuse rules.
Tax Group Formation & Single Tax Return (95% Rule)
Parent and subsidiaries with 95%+ ownership form one fiscal entity filing single return.
Unincorporated Partnerships Fiscal Transparency
Profits flow directly to individual partners unless election is made to be taxed as entity.
Family Foundations & Private Wealth Neutrality
Can elect unincorporated partnership status to maintain zero tax on private wealth assets.
Natural Persons Business Turnover Threshold (AED 1M)
Individuals in UAE business taxed at 9% only if annual turnover exceeds AED 1,000,000.
Exempt Personal Income (Wages, Personal Real Estate)
Employment wages, personal investments, and personal residential rentals are exempt.
Foreign Entities with UAE Permanent Establishment (PE)
Fixed place of business or dependent agent creates PE taxed at 9% on UAE sourced profit.
Place of Effective Management (POEM) in the UAE
Foreign company managed and controlled from UAE is treated as a UAE Tax Resident.
Mandatory Corporate Tax Registration Deadlines
License issue month dictates registration deadline. Late filing triggers AED 10,000 fine.
Annual Tax Return Filing Deadline (9 Months Post Year-End)
Tax returns and payments due within 9 months from end of tax year (Sept 30 for calendar year).
Tax Accounting Period Definition & Changes
Standard period is 12 months. Application to FTA required to change tax period dates.
Cash vs Accrual Accounting Basis Threshold
Cash basis accounting permitted if annual revenue does not exceed AED 3,000,000.
Realized vs Unrealized Gains/Losses Election
Taxable person may elect to calculate taxable income on realized basis for capital assets.
Bad and Doubtful Debt Deductions under IFRS 9
Deductible if specific debtor insolvency is evidenced and meets write-off criteria.
Depreciation & Amortization Statutory Rules
Depreciation calculated using accepted IFRS financial accounting standards.
Foreign Tax Credit Deduction for Taxes Paid Abroad
Credit capped at the UAE corporate tax attributable to foreign sourced income.
Withholding Tax Rate on UAE Cross-Border Payments (0%)
Withholding tax rate is officially set at 0% for dividends, royalties, and cross-border services.
Qualifying Public Benefit Entities Tax Exemption
Exempt from corporate tax upon cabinet gazetting and adherence to non-profit mandate.
Extractive & Natural Resource Businesses Special Regime
Exempt from Federal Corporate Tax, subject to Emirate-level fiscal decrees and royalties.
Government Entities & Sovereign Wealth Funds Status
Wholly owned government entities are exempt from corporate tax on mandated operations.
General Anti-Abuse Rule (GAAR) Enforcement
FTA empowered to counteract artificial arrangements lacking valid commercial reality.
Arm's Length Principle for Connected Persons Salary
Compensation to owner/officer deductible only if commensurate with independent market benchmarks.
Tax Registration of Dormant & Non-Trading Companies
Every active commercial license holder must register for CT regardless of trading status.
Tax Deregistration on Company Liquidation
Deregistration application must be filed within 3 months of company dissolution.
Late Tax Return Filing Penalties
AED 500 for initial month delay, escalating by AED 1,000 per subsequent month.
Late Corporate Tax Payment Interest Charges
14% per annum compound interest charged on outstanding unpaid tax balance.
Record Retention Obligations (7 Years Minimum)
Invoices, agreements, and ledgers must be retained for 7 years post tax year end.
IFRS Requirement for Revenue Exceeding AED 50M
Audited financial statements by licensed UAE auditor mandatory if turnover > AED 50M.
Related Party Service Cost Allocation Framework
Direct allocation preferred; allocation keys must reflect authentic operational benefits.
Capital Asset Relief on Intra-Group Transfers
Deferred tax treatment on transfers of capital assets between qualifying group members.
Pre-Implementation Tax Loss Status
Losses incurred prior to the first corporate tax period cannot be carried forward.
Foreign Exchange Gain/Loss Computation for Tax
Exchange differences on monetary items follow audited IFRS profit and loss accounts.
Branch vs Subsidiary Tax Attributes in UAE
Branch is part of parent entity; subsidiary is separate standalone taxable person.
Small Business Relief Revenue Threshold Monitoring
Breaching AED 3M in any tax year permanently revokes SBR for that period.
Tax Treatment of UAE Government Subsidies & Grants
Government grants are non-taxable if specifically exempted by Cabinet decree.
Deductibility of Staff Gratuity & Pension Provisions
Statutory end-of-service accruals are deductible under UAE labour law formulas.
Holding Company Special Regimes & Passive Income
Dividends and capital gains qualify for 0% tax under participation exemption criteria.
Real Estate Investment Trusts (REITs) Tax Status
Qualified investment funds enjoy 0% corporate tax upon meeting public trading criteria.
Tax Treatment of Cryptocurrencies & Digital Assets
Corporate gains from crypto trading subject to 9%; personal investments exempt.
Corporate Tax Clearance for Trade License Renewal
Municipal authorities require proof of CT registration to issue renewed trade licenses.
Foreign Permanent Establishment (PE) Exemption Election
Resident juridical persons can elect to exempt profits of foreign PEs if taxed at minimum 9% abroad.
Tax Losses 75% Limitation & Continuity of Ownership
Tax losses can offset maximum 75% of taxable income in future tax periods indefinitely.
Corporate Tax Group Formation & 95% Shareholding Rule
UAE parent and subsidiaries can form a single Tax Group if parent holds directly or indirectly at least 95%.
Have Questions Regarding Corporate Tax (9%)?
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