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What is Corporate Tax?

Corporate Tax is a direct tax levied on the net income or profit of corporations and other businesses.

This is also called as “Corporate Income Tax” or “Business Profits Tax”.

Seamless corporate taxation services in Dubai

    Implementation Date of CT

    The UAE CT regime will become effective for financial years starting on or after 1 June 2023.

    Entity Financial Year UAE CT applicable from
    A 1 Jan to 31 Dec 1 Jan 24 onwards
    B 1 Apr to 31 Mar 1 Apr 24 onwards
    C 1 Oct to 30 Sep 1 Oct 23 onwards
    D 1 Jul to 30 Jun 1 Jul 23 onwards

    Corporate Tax is Applicable to

    Resident Person

    • Person incorporated in UAE
    • Person incorporated outside UAE and managed and controlled in UAE
    • Natural person conducting business activity

    Person incorporated in UAE includes:

    • LLCs, PSCs, PJSCs
    • Individual, freelancer
    • Foreign subsidiary in UAE
    • Banks
    • Entities in Free zones
    • Sole establishments & civil(individual capacity)

    Non-Resident Person

    • Person having Permanent Establishment (PE) in UAE
    • Derives income from UAE
    • Has any connection in thestate (cabinet decision)

    Permanent Establishment (PE) means:

    1. Fixed or permanent place in the State
      • A branch
      • An office
      • A factory
      • A workshop
      • similar
    2. A Person habitually conducts business for non-resident

    Basic intro on Corporate Tax in UAE

    • The Ministry of Finance introduced (Federal Decree Law no. 47of 2022) Corporate Tax, w.e.f 1st June 2023, in UAE on business profits. The corporate tax in UAE will be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with internationally accepted accounting standards.
    • As per Article 51, Federal Decree Law no. 47of 2022, taxable person needs to register for Corporate Tax with the authority.

    Before you register for Corporate Tax...

    Do you have answers for the following questions?

    • Are you aware of businesses which are exempted from CT registration (Ministerial decision no. 43 of 2023)?
    • Do you know when to register for CT?
    • Do you know your business Tax period as per Article 57, and are you aware of the conditions under which you can change your tax period, as per FTA decision no. 5 of 2023?
    • Do you hold multiple Trade License, and are you aware of the requirement to register as a Tax Group as per Article 40? Have you assessed the impact of registering as Tax Group or as an individual registration for each Trade license?
    • Are you aware that branch does not require separate CT registration, it’s part of Main Trade license?
    • Is your company eligible for Small Business Relief?
    • Is your financials chart of account complied with CT requirements?
      Is your business in Free zone, are you aware of the Qualifying criteria to be eligible for 0% Corporate Tax?
    • Do you have transactions with connected person, related parties? Are you aware of the requirement of documentation under CT regulations for transactions with such person?
    • Have you assessed the impact of Corporate Tax, in your business financials & cash flows?
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