Corporate Tax in UAE: Planning for Businesses Earning Above AED 375,000
The UAE’s tiered corporate tax system—0% on taxable income up to AED 375,000 and 9% on income above that threshold—creates a critical financial inflection point for growing businesses. Since Federal Decree-Law No. 47 of 2022 came into effect on 1 June 2023, businesses generating taxable profits above AED 375,000 are now subject to the 9% federal corporate tax rate, a development that fundamentally reshapes financial planning across the emirate. Unlike traditional flat-tax or progression-based systems in competitor jurisdictions, the UAE’s structure is genuinely business-friendly: a company earning AED 500,000 in taxable profit pays zero tax on the first AED 375,000 and just 9% (AED 11,250) on the remaining AED 125,000—not 9% on the total.
