Corporate Tax is a form of direct tax levied on the net profit of corporations and other businesses. Corporate Tax is also known as Corporate Income Tax or Business Profits Tax.
Corporate Tax was issued on 9 December 2022 in the United Arab Emirates, and it will come into effect from 1 June 2023. Companies and individuals posting over AED 375,000 profit per annum will have to pay a 9% Corporate Tax. All Taxable Persons are required to register for Corporate Tax and obtain a Corporate Tax Registration Number. Corporate Tax rates are 0% for taxable income up to AED 375,000 and 9% for taxable income above AED 375,000 per annum. Annual corporate tax returns will be required to be filed by all taxable persons no later than nine months from the end of the tax period.
A company whose financial year starts on 1 July 2023 and ends on 30 June 2024, will have the applicability of the new tax from 1 July 2023. A company whose financial year starts on 1 January 2023 and ends on 31 December 2023 will have to apply the tax from 1 January 2024.