What is Corporate Tax in UAE?
Corporate tax, also known as company tax or federal tax, is a direct tax levied on the net income or profits of corporations and other businesses. The UAE corporate tax applies to all emirates and is enforced by the Federal Tax Authority (FTA). Ecotax helps businesses navigate the regulations introduced under Federal Decree-Law No. 47 of 2022, which applies to both UAE-based and foreign entities operating in the country.
UAE Corporate Tax Rates
The tax structure is designed to support growth, and Ecotax ensures your business applies the correct rates:
| Taxable Profit Amount | Corporate Tax Rate |
| Up to AED 375,000 | 0% (Small Business Relief) |
| Above AED 375,000 | 9% |
| Specific sectors (e.g., foreign banks, oil & gas) | May have rates up to 20% |
Additional provisions apply to Multinational Enterprises (MNEs) with global revenues exceeding AED 3.15 billion.
Who is a Taxable Person?
Under the law, Ecotax identifies taxable persons as:
Resident Persons: UAE-incorporated entities, foreign companies managed in the UAE, and natural persons earning over AED 1 million annually.
Non-Resident Persons: Foreign companies with a UAE permanent establishment (PE) or UAE-sourced income.
Corporate Tax Registration UAE
Ecotax manages the registration process for all taxable entities to obtain their Corporate Tax Registration Number, including:
Mainland companies
Free zone entities
Branches of foreign companies
Sole establishments earning qualifying revenue
Deadline: Ecotax ensures you register before filing your first corporate tax return to avoid penalties.
Calculation of Corporate Tax UAE
Ecotax follows a clear structure for precise tax calculation:
Determine Gross Revenue
Deduct Allowable Expenses: Including salaries, rent, marketing, and depreciation.
Arrive at Taxable Income
Apply Corporate Tax Rate (0% or 9%)
We ensure your records strictly follow UAE GAAP or IFRS.
Corporate Tax in UAE Free Zones
Ecotax assists Free Zone entities in maintaining a 0% tax rate by ensuring they:
Hold Qualifying Free Zone Person (QFZP) status.
Earn Qualifying Income from permitted activities.
Avoid income from Excluded Activities.
Note: Free zone businesses must still register and file returns via Ecotax even if tax-exempt.
Exemptions & Small Business Relief (SBR)
Ecotax helps you identify if you qualify for exemptions (Government entities, extractive industries, etc.) or Small Business Relief:
0% tax for businesses with revenue up to AED 3 million (until Dec 31, 2026).
Ecotax handles the required SBR notification filing within your tax return.
Key Features of Ecotax Corporate Tax Services
Expert application of the 9% flat rate or 0% relief.
Aligning your fiscal year reporting (starting after June 1, 2023).
Maximizing deductions for legitimate business expenses.
Ensuring transparent compliance and avoiding non-compliance penalties.
