According to the UAE Ministry of Finance release in January2022, Corporate Tax in UAE would apply at a standard rate of 9% with the following tax segmentation and rates:

0% for taxable income up to AED 375,000
9% for taxable income exceeding AED 375,000
A separate tax rate (not yet set) for major multinationals that fulfill particular conditions

How is corporate tax calculated in UAE?

Corporate tax in UAE is calculated at 9% of the net profit shown in the company’s financial statements after deducting all applicable deductions and excluding the exempted income. Any foreign taxes paid will also be allowed for reduction from the profit shown in the financial statement.

The net profit derived after all deductions will be considered as taxable income. The 9 % corporate tax will be levied only if the taxable value exceeds AED 375,000.

Example of business tax/UAE Corporate Tax Rate calculation in UAE

Net Profit 500,000
Less : All deduction**25,000
Net Income 475,000
Less : Exempt Amount 375,000
Taxable Income 100,000
Corporate Tax @9% on 9000
**The type of deductions allowed for corporate tax deduction is yet to be made available by the authorities

As shown in the table, first the net profit from the financial statement is reduced by deductions as allowed by the corporate rules. Later, the exempt amount of 375,000 is reduced to arrive at the taxable income

How can Saif Chartered Accountants assist you with Corporate tax ?

The financial accounts will now emerge as more vital for enterprises in UAE. The precision of the company data will determine the validity of financial accounts. This is what makes Saif Audit a great fit for your organization.

We offer full solution for all your company requirements. You may plan for your company development and obtain additional prospects and helps you handle all the business complications.

Related : UAE CT, Dubai Corporate Tax Consultants, More Updates