FAQs Article 3: Corporate Tax Rate
Source: https://mof.gov.ae/corporate-tax-faq/
- What are the UAE CT rates?
| Taxpayer | Applicable CT rate |
| Individuals and juridical persons | 0% for taxable income up to and including AED 375,000 (this amount is to be confirmed in a Cabinet Decision)
9% for taxable income exceeding AED 375,000 |
| Qualifying Free Zone Persons (see further information below) | 0% on qualifying income
9% on taxable income that does not meet the qualifying income definition |
- If a business has earned taxable income of AED 1 million, what will be the UAE CT amount payable?
The CT liability will be calculated as follows:
- Taxable income of AED 375,000 (amount to be confirmed in a Cabinet Decision) subject to CT at 0%: AED 375,000 x 0% = AED 0
● Taxable income exceeding AED 375,000 (amount to be confirmed in a Cabinet Decision) subject to CT at 9%: (AED 1,000,000 – AED 375,000) = AED 625,000 x 9% = AED 56,250
The UAE CT liability for the Tax Period will be AED 0 + AED 56,250 = AED 56,250
The final amount of UAE CT payable can be reduced by available tax credits (see below under ‘Tax Credits’ section).
- Will small businesses be given any UAE CT relief?
In addition to a 0% CT rate for taxable income up to and including AED 375,000, small businesses with revenue below a certain threshold can claim ‘small business relief’ and be treated as having no taxable income during the relevant Tax Period and may be subject to simplified compliance obligations. To claim small business relief, an election must be made to the FTA.
- Who can claim small business relief for UAE CT purposes?
Any UAE resident juridical person or individual with revenues below the threshold defined by the Minister and that meets any other conditions that may be set, can claim small business relief.
- What is revenue?
Revenue is the gross amount of income derived in a tax period from sales of inventory and properties, services, royalties, interest, premiums, dividends and any other amounts, before deducting any type of costs or expenditure. In the context of income from sales or services, gross income means gross revenues from sales or services without deducting the cost of goods sold or the cost of services.
