FAQ

Corporate Tax (CIT) is a direct tax imposed on the taxable income of businesses operating in the UAE. It applies to most entities, including companies, partnerships, and individuals conducting business activities.

CIT applies to financial years starting on or after June 1, 2023.

• 0% on taxable income up to AED 375,000
• 9% on taxable income exceeding AED 375,000
• 0% rate for Qualifying Free Zone Persons on certain income categorieS

Corporate Tax applies to:

• UAE-incorporated businesses
• Foreign entities managed and controlled in the UAE
• Non-residents with a Permanent Establishment (PE) in the UAE
• Individuals conducting business activities generating over AED 1 million per year

Certain entities are exempt, including:

• UAE government entities
• Public benefit organizations
• UAE extractive businesses (oil, gas, natural resources)
• Pension or social security funds
• Qualifying investment funds

Taxable income includes business profits, calculated based on accounting net profit with adjustments for exempt income and non-deductible expenses.

• Domestic dividends and foreign participation exemption
• Income from a foreign Permanent Establishment (if elected)
• Income from aircraft/ship operations in international transport

• Qualifying Free Zone Persons (QFZPs) enjoy a 0% tax rate on qualifying income.
• Non-qualifying income is taxed at 9%.
• QFZPs must meet substance requirements, maintain audited financial  statements, and comply with transfer pricing rules.

Businesses can deduct expenses incurred wholly and exclusively for generating taxable  income, including:

• Operating expenses
• Employee salaries
• Depreciation of assets
• Interest payments (subject to limits)  However, certain expenses like bribes, fines, and personal expenses are non-deductible.

Yes. Businesses can carry forward tax losses and offset them against future taxable income, subject to conditions.

All taxable businesses must register with the Federal Tax Authority (FTA) on the Emaratax Platform and obtain a Tax Registration Number (TRN).

• Businesses must file a tax return annually.
• Payment is due within 9 months from the end of the financial year.
• All businesses must keep financial records to support tax filings.

Related party transactions must comply with the arm’s length principle and require proper documentation.

Yes, including:

• Small business relief for businesses with revenue below AED 3 million.
• Group relief for qualifying intra-group transfers.
• Restructuring relief for mergers and reorganizations.

Failure to register, file returns, or maintain records can result in financial penalties and legal consequences.