What is the Dubai Corporate Tax Rate ?
UAE Corporate Tax Rate / Dubai Corporate Tax Rate (which is one of the Emirati in the UAE) is the rate of tax payable by companies in the UAE, including those in Dubai. While presently, there is no Corporate Tax payable by UAE companies, from June 1, 2023, it is proposed that specified companies shall be liable to pay Corporate Tax.
UAE has proposed competitive Corporate Tax Rates for companies carrying on business, which is as under : –
- Free Zone Businesses – Corporate Tax incentives currently being offered will continue to be honored in free zones that comply with all regulatory requirements and do not conduct business with mainland UAE
-
For companies liable to tax, the following rates shall apply : –
- 0% for taxable income up to AED 375,000
- 9% for taxable income above AED 375,000
Basis of computing Dubai Corporate Tax Rate
The Corporate Tax Rate would be computed based on the financial statements prepared in accordance with the International Accounting Standard. It is expected that there would be minimum adjustment to the accounting profits to compute the taxes.
Credit for UAE Corporate Tax Rate
While there would be no credit for UAE Corporate Tax , where the UAE entity is considered as a Pass through entity of a MNE enterprise, it may claim credit for such taxes.
Withholding Tax Rates
No withholding tax under UAE CT will be applicable on domestic and cross-border payment. For example, if a UAE entity makes a payment for Fee for Technical Services to an entity in India, there is no WHT on such payment in UAE.
If you would like to assess the impact of the proposed introduction of Corporate Tax on your business, you can contact us.
