Answer:
Under the UAE Law, different Corporate Tax rates apply depending on the nature of the Taxable Person and their income level.
(Article 3 of Federal Decree-Law No. 47 of 2022)
Applicable Corporate Tax rates:
• Individuals and juridical persons:
– 0% on the portion of taxable income up to and including AED 375,000
– 9% on taxable income exceeding AED 375,000
• Qualifying Free Zone Persons:
– 0% on Qualifying Income
– 9% on income that does not meet the definition of Qualifying Income
Multinational Enterprises:
– May be subject to a Top-up Tax to ensure a minimum 15% effective tax rate, as per rules issued by Cabinet decision
Example:
If a mainland UAE company has taxable income of AED 500,000:
– The first AED 375,000 is taxed at 0%
– The remaining AED 125,000 is taxed at 9%
Total Corporate Tax = AED 11,250