The UAE Federal Corporate Tax Regime (Law No. 47 of 2022)
Effective for financial years commencing on or after June 1, 2023, Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses established a modernized, internationally competitive corporate tax framework designed to reinforce the UAE's position as a premier global business hub while adhering to OECD Pillar Two standards.
Tiered Statutory Tax Rate Structure
| Taxable Income Bracket | Applicable Tax Rate | Objective & Criteria |
|---|---|---|
| AED 0 – AED 375,000 | 0% | Threshold designed to foster startups, SMEs, and small businesses |
| Above AED 375,000 | 9% | Applied strictly to the net taxable profit exceeding the AED 375k baseline |
| Qualifying Free Zone Income | 0% | For Qualifying Free Zone Persons (QFZP) satisfying economic substance criteria |
Small Business Relief (AED 3M Revenue Ceiling)
To reduce administrative compliance burdens for small enterprises, Cabinet Decision No. 13 of 2023 provides that resident taxable persons whose revenue in the relevant and previous tax periods does not exceed AED 3,000,000 may elect to be treated as having no taxable income for that period. Key aspects include:
- Available for tax periods starting on or after 1 June 2023 through 31 December 2026.
- Relieved businesses are exempt from preparing complex transfer pricing documentation.
- Must still register for Corporate Tax with the Federal Tax Authority (FTA) and submit a simplified tax declaration.
Mandatory Registration & Filing Deadlines
All taxable persons—including mainland companies, free zone entities, and foreign corporate branches—must register for Corporate Tax through the FTA EmaraTax digital platform and obtain a Corporate Tax Registration Number (TRN). Tax returns must be filed and payments settled within 9 months following the close of the financial year.