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Dec 9, 2025
Corporate Tax in the United Arab Emirates: Understanding the Corporate Income Tax Introduced in 2023
The introduction of Corporate Tax in the United Arab Emirates on June 30, 2023, marked a major turning point for the local entrepreneurial ecosystem. Often perceived as a complex or concerning measure, this tax is actually relatively simple to understand when one analyzes how it functions.
This article revisits the main points discussed in the video above and offers a clear explanation of the taxation mechanism, the calculation of taxable income, and the filing deadlines.
What is the Corporate Tax in the United Arab Emirates?
The introduction of Corporate Tax in the United Arab Emirates on June 30, 2023, marked a major turning point for the local entrepreneurial ecosystem. Often perceived as a complex or concerning measure, this tax is actually relatively simple to understand when one analyzes how it functions.
This article revisits the main points discussed in the video above and offers a clear explanation of the taxation mechanism, the calculation of taxable income, and the filing deadlines.
How is the Corporate Tax calculated?
The tax scheme is simple:
Step 1: determine the turnover
The income taken into account includes the total turnover, whether generated in the Emirates or abroad.
Step 2: deduct allowable expenses
The professional expenses necessary for the activity are deductible:
operating expenses, salaries, rent, general expenses, depreciation, etc.
Step 3: obtain the taxable income
Once the expenses are deducted, the company obtains a result, usually profitable.
Step 4: apply exemption and tax rate
Fiscal rules provide for an exemption on the first income bracket.
The income is not taxed up to 375,000 AED, which is approximately:
100,000 dollars
90,000 euros
Beyond this bracket, the remaining profit is taxed at the standard rate of 9%.
Who is affected by the Corporate Tax?
Most companies registered in the Emirates are concerned, whether they are in Free Zone or Mainland. Some Free Zones benefit from special regimes, but only under strict conditions related particularly to Qualifying Income.
In most cases, companies must therefore anticipate this tax in their annual financial management.
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