Corporate Tax - Rates and Deadlines

Corporate Tax is a form of direct tax levied on the net income of corporations and other businesses. The CT law will levy corporate income tax on business profits made by UAE businesses, over the course of a tax accounting period.

This blog explaines the applicable Corporate Tax Rates, Tax Period for each Financial Year, First Return Filing Date and Dealine for registering for Corporate Tax in the UAE.

The Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses, provides the legislative basis for the introduction and implementation of a Federal Corporate Tax in the UAE. It is effective for entities with financial years starting on or after 1 June 2023. The Federal Tax Authority (FTA) will be responsible for the administration, collection and enforcement of the Corporate Tax.

Corporate Tax Rates:

Corporate Tax will be charged on the annual taxable income of a Taxable Person as follows:

Taxable Income	UAE CT Rate (%)
Taxable income not exceeding AED 375,000 Qualifying income of a Qualifying Free Zone Person (QFZP)	0%
Taxable income exceeding AED 375,000 Non-qualifying income of a Qualifying Free Zone Person (QFZP)	9%

In furtherance, let's understand how each category of Taxable person will be taxed under CT Law.

Taxable Persons	0%	9%
Natural Persons and Juridical Persons	Taxable Income less than or equal to AED 375,000 - includes all Business Activities of the Taxable Person	Taxable Income above AED 375,000 - includes all Bbusiness Activities of a Taxable person
Qualifying Free Zone Person	On Qualifying Income	On Non-Qualiyfying Income
Non-Residents with a PE or a Nexus in the UAE	On Taxable Income less than or equal to AED 375,000	On Taxable Income exceeding AED 375,000
Non-Residents deriving a UAE Sourced Income	Withholding Tax of 0% on UAE sourced income not attributable to a PE in the UAE	N/A

When Will the Corporate Tax Come into Effect?

The Corporate Tax will come into effect from the beginning of the Taxable Person's first financial year which starts on or after June 1, 2023. Entities have until their First Tax Return Filing Date to register for Corporate Tax.

CT Return Filing Dates:

Financial Year of the Company	CT applicable from	First Tax Return Filing
1st June 2023 – 31st May 2024	1st June 2023	9 months from the end of tax period i.e., 28th February 2025
1st January 2023 – 31st December 2023	1st January 2024	9 months from the end of tax period i.e., 30th September 2025
1st April 2023 – 31st March 2024	1st April 2023	9 months from the end of tax period i.e., 30th November 2025