What is Corporate Tax and Why Now?
Corporate tax is a direct tax levied on the net income or profit of businesses. The UAE, once known for its tax-free appeal, introduced corporate tax to align with global tax standards and reduce reliance on oil revenue. This change enhances transparency, attracts serious investors, and promotes long-term economic sustainability.
Starting from June 1, 2023, businesses in Dubai are now legally obliged to comply with the UAE’s corporate tax regime. While the tax rate remains highly competitive, understanding its scope and implications is essential for business continuity and compliance.
When Was Corporate Tax Introduced in the UAE?
The UAE Ministry of Finance announced corporate tax in January 2022, with enforcement beginning in June 2023. The Federal Tax Authority (FTA) oversees its implementation and enforcement across all Emirates, including Dubai.
Who is Subject to Corporate Tax in Dubai?
Qualifying and Non-Qualifying Businesses
Corporate tax in Dubai applies to: • All UAE-based businesses (mainland and free zone) • Foreign entities with a permanent establishment in the UAE • Freelancers and independent professionals earning above the threshold Exceptions include individual salaries, personal income from real estate, and capital gains on personal investments.
Thresholds, Exemptions, and Free Zone Entities
• 0% tax on annual profits up to AED 375,000 • 9% tax on profits above that threshold • Free Zone entities benefit from a 0% rate, provided they meet specific conditions on "qualifying income" Certain sectors such as extractive industries and government-controlled entities may also be exempt.
Comparing UAE Corporate Tax to Other Countries
Dubai’s 9% corporate tax remains one of the lowest globally, compared to: • UK: 25% • USA: 21% • India: 22% (base rate) This low-tax advantage continues to attract global investors while maintaining transparency and regulatory strength.
Start Your ApplicationHow Juris Prime Corporate Services Supports Clients
Juris Prime provides: • Comprehensive tax assessments • VAT and corporate tax alignment • FTA-compliant record-keeping • Proactive audit preparation • Custom tax strategies tailored to your sector Their experts decode the law into actionable steps and ensure your compliance is future-proof.
Penalties for Non-Compliance with Corporate Tax
Types of Fines and Consequences Failure to comply can lead to: • Late registration fines • Incorrect return filing penalties • Daily accumulating fines for repeated offenses
How to Stay on the Right Side of the Law
• Partner with a tax consultant • Stay updated on FTA announcements • File accurate and timely returns • Keep organized and retrievable records
Corporate Tax and Free Zone Companies
Qualifying Income and 0% Tax Rate Rules Free Zone companies enjoy a 0% corporate tax on qualifying income such as: • Sales to outside UAE • Inter-free zone transactions • Specified intra-group income
Substance and Compliance Requirements
To maintain benefits, free zone entities must demonstrate: • Adequate economic substance • Separate accounting records • Real presence (offices, staff) in the free zone
Navigate Corporate Tax with Juris Prime
As the corporate tax era dawns in Dubai, businesses must act wisely. With Juris Prime Corporate Services, you don’t just stay compliant—you stay ahead. From strategy to execution, their experts provide personalized guidance, turning tax challenges into growth opportunities.