UAE Corporate Tax

Corporate Tax is a form of direct tax levied on the net income or profit of corporations and other businesses. It  is also referred to as “Corporate Income Tax” or “Business Profits Tax” 

Means It is based on the net profit 

Net Profit = Income – All Expenses related to the business, so if your business having net profit more than AED 375,000 you need to pay 9% CT

Ministry of Finance

Federal Tax Authority (FTA)

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

Examples:

• A business that has a financial year starting on 1 July 2023 and ending on 30 June 2024 will become subject to UAE CT from 1 July 2023 (which is the beginning of the first financial year that starts on or after 1 June 2023)
• A business that has a (calendar year) financial year starting on 1 January 2023 and ending on 31 December 2023 will become subject to UAE CT from 1 January 2024 (which is the beginning of the first financial year that starts on or after 1 June 2023)

Accounting Net Profit of a business (as reported in the financial statements prepared in
accordance with IFRS) subject to certain adjustment (To be specified).

No

The CT liability will be calculated as follows:

• Taxable income of AED 0 – AED 375,000 at 0% = AED 0
•  taxable income exceeding AED 375,000 will be 9%
• Example the Net profit of a company is AED 500,000 then the calculation is as follows 
• 1. AED 0  to 375,000 is 0% = 0
• above 375,000 is 9%  ie (500,000 – 375,000 = 125,000) 9% of 125,000= 11,250 so the CT payable = 0 +11,250 = AED 11,250

Businesses engaged in real estate management, construction, development, agency and brokerage activities will be subject to UAE CT