How to Determine if a Business is Subject to UAE Corporate Tax -AM Audit | Audit Accounting Firm in Dubai
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How to Determine if a Business is Subject to UAE Corporate Tax

Recently, the ministry of finance in the Arab Emirates has introduced a national corporate tax schedule.  It’s to be incorporated into UAE businesses.  The welcome news is that it will commence operation in 2023.

Are you wondering what benefits this fresh approach could be to businesses in the Emirates?  It’s simple.  The purpose of this mechanism is to follow the international precedents of corporate taxes.  At the same time, this technique also minimizes the compliance costs for set-ups. 

Even though the business tax has not yet been endorsed, it has several potentials.  The last thing you want as an entrepreneur is to be caught unawares.  To this end, knowing when your business profit is subject to corporate tax in UAE is essential.

Application Of The Business Tax

 The corporation tax in the Arabs is typically levied at the national level.  It applies to all set-ups and profit-oriented enterprises operating in the Emirates with a commercial permit. 

However, there are certain privileges, such as organizations involved in the extraction of mineral deposits.

How To Know Whether Your Firm’s Profits Are Subject To The Emirates’ Business Tax

Now that you know how corporation tariffs apply to nearly all set-ups in the Emirates, let’s examine how to ascertain whether your business profit is subject to one. 

  • The rule of thumb is that all profit-making operations will be taxed nationally.  An exception is that monetary procedures such as extracting natural deposits will be subject to local tariffs.  This means they will pay their levies based on their locations in the Arabs. 
  • Note also that the corporation tax will be paid on taxable revenue.  Taxable revenue implies your firm’s income after several deductibles have been made. 
  • The Arabs’ tax mechanism applies to all set-ups operating under the UAE business permit.  Note that the taxable income of these firms must exceed 375,000 Dirham. 

Other Considerations

  • Foreigners

The corporation tax applies to foreign companies and persons that engage in commercial activities in the Emirates.  However, it’s not a one-time activity.  This means there must be continuous business operations in the Arabs. 

There are certain limitations to this.  Interest, dividends, and other funding returns will be free from corporation tariffs in the United Arab. 

  • Free Zone in the UAE

Open areas are liable to the Emirates’ business tax regulations.  However, the ministry of finance will sustain the tariff incentives for open area firms that comply with the regulatory benchmarks.  It will also maintain them for set-ups that do not function within the coastal part of the country. 

With the inception of the corporation tariff system in the United Arabs, it’s apparent that it has come to stay.  The overall purpose is to make business tariff regulations based on public policy.  In this way, UAE entrepreneurs can easily comply with it.


One of the most challenging business considerations is ascertaining whether your business profits are subject to corporate tax in UAE.  It becomes even more difficult when you don’t know how the Emirates tariff mechanism works. 

Why  Am-Audit?

You need a team of reliable experts to help you work around these tax challenges.  

The welcome news is that our team at Am-Audit has all these professionals.  They have extensive knowledge and experience in numerous tax practices, especially corporation tax and compliance procedures. 

If you need any pieces of advice or recommendations on the potential effect of the UAE business tax on your firm, please feel free to get in touch with us.  We’re always happy to assist you.

Expert Team

  • Sandeepani

  • Senior Financial Auditor
  • Adel Farag

  • Taxation Manager
  • Mohammed A

  • Accounting and tax Associate
  • Sohaib Basharat

  • Financial Auditor & Tax Manager

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