A Comprehensive 2025 Update
The UAE Ministry of Finance introduced the federal corporate tax on January 31, 2022, which became effective for financial years starting on or after June 1, 2023. As of 2025, UAE businesses are now fully subject to and operating under this regime.
Strengthen economic diversification and long-term sustainable growth
Align with international tax transparency standards
Enhance the UAE’s status as a global business hub
Prevent the development of harmful tax practices
All UAE-based businesses and individuals engaged in commercial activities.
Foreign entities and individuals conducting regular trade or business within the UAE
Real estate businesses involved in management, development, construction, agency, and brokerage
Free zone entities – as long as they comply with the qualifying activity requirements and maintain adequate substance
Banking institutions operating in the country
As of 2025, the following rates continue to apply:
on net taxable income up to AED 375,000
on net taxable income exceeding AED 375,000
Dividends and capital gains from qualifying shareholdings
Foreign-sourced income meeting UAE CT criteria
Intra-group transactions and reorganizations (subject to specific conditions)
Non-resident individuals and entities with no ongoing business operations in the UAE
Income from extraction of natural resources (remains under Emirate-level taxation)
UAE businesses can offset corporate tax payable with taxes paid abroad on the same income.
Businesses may carry forward losses incurred post-implementation to offset taxable profits in future periods.
Eligible UAE companies may form a tax group, treated as a single entity for CT purposes (conditions apply).
Companies must adhere to OECD-aligned transfer pricing rules and documentation requirements to ensure fair valuation of intra-group transactions.
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