With the frequently changing tax regulations in UAE, we get this question a lot, “So… how much is corporate tax in the UAE?” For years, businesses here enjoyed a tax-free environment. But things have shifted. With the corporate tax framework now in existence, what are the things to be considered or looked into?
Nope, it is not that bad. You can remain compliant without losing sleep, provided you get the right corporate tax assessment in Dubai. It is simply about finding out what applies to your business and what does not. And this is where accounting services also become useful. Let us run through the basics.
1. Corporate Tax in the UAE
Let’s start with the basics.
As of tax year 2024, the UAE has introduced a 9% corporate tax rate, but it only kicks in on taxable profits above AED 375,000. So, if your business is under that threshold, you’re not paying corporate tax (yet). If your taxable profits exceed AED 375,000, then 9% applies to the amount above threshold.
Now, who actually needs to pay the corporate tax?
If you’re a mainland UAE company, you’re eligible to pay corporate tax. Same goes for foreign companies with a business presence here, like branches, subsidiaries, or anything that qualifies as a “permanent establishment.”
Free Zone entities are a bit trickier. Some still qualify for the 0% tax rate, but that only applies to income from qualifying activities. The moment they start earning from non-qualifying sources, like dealing with mainland clients without the right structure, that income becomes taxable.
This is where a proper corporate tax assessment in Dubai makes a big difference. We’ve seen too many businesses assume they’re exempt, only to find out later they’re on the hook. That’s avoidable with the right support. And that’s where accounting services help by making sure your setup, revenue sources, and filings all align with the new tax rules.
2. Tax-Free vs Taxable
Now that we’ve covered who’s generally in scope for corporate tax, let’s talk about who’s not paying at least for now.
Small businesses with lower income
If your revenue is modest i.e. under AED 375,000, you may qualify for Small Business Relief. It’s a built-in cushion for smaller operations, designed to give them some breathing room as they grow. The key here is making sure you’re eligible and claiming it properly. Accounting services help you access reliefs you might otherwise miss.
Free Zone entities
Not all Free Zone businesses are tax-free anymore but some still are. You need to earn Qualifying Income and follow specific conditions. That usually means income from outside the UAE, transactions with other Free Zones, or certain regulated activities.
If your Free Zone company is working with mainland clients, leasing to non-Free Zone tenants, or engaging in activities outside the qualifying list, that income could be taxable.
This is one area where we’ve seen confusion and where a corporate tax assessment in Dubai can help you draw a clear line between qualifying and non-qualifying income.
Government and non-profit bodies
Some entities are fully exempt such as UAE government bodies, regulated charities, and certain public benefit organizations. These exemptions aren’t casual; they come with compliance responsibilities, and the burden is on the entity to maintain its status through proper registration and reporting.
3. Breakdown of Taxable Income
So, what exactly counts as “taxable income” under the UAE’s corporate tax law?
In simple terms, it’s your net profit, “the number at the bottom of your profit and loss statement” after allowable adjustments.
Let’s break it down.
You start with your accounting profit, based on your financial statements. Then you apply certain adjustments as per the tax law adding back expenses that aren’t deductible, removing income that’s exempt, and factoring in specific allowances.
Some common deductions include:
- Salaries and wages
- Rent and utilities
- Business travel (when it’s directly related to operations)
- Interest expense (within limits)
- Depreciation on assets (as per the tax rules, not just your accounting policy)
What you can’t deduct: personal expenses, fines, or entertainment spending that isn’t directly tied to revenue generation.
This is why clean, accurate financial records are essential. Tax authorities will expect to see a clear paper trail. We’ve helped clients in Dubai tighten up their recordkeeping so they’re not scrambling come tax filing time. If you’re not already working with an accountant who understands the local tax framework, now’s the time. A proper corporate tax assessment in Dubai can highlight gaps early and help you stay compliant from day one.
At SS & Co., we dig into your business model, spot red flags, and make sure your accounting services are aligned with what the law requires and what your business needs to grow confidently.
Importance of Corporate Tax Assessment in Dubai
We’ve seen it firsthand at SSCOGLOBAL that businesses that underestimate their taxable income, miss key deadlines, or assume they’re exempt and end up facing fines, stressful audits, and unnecessary headaches. That’s why an accurate corporate tax assessment in Dubai is essential.
Why does it matter?
Late filing, incorrect reporting, or failing to register properly can result in fines. Your reputation is on the line too. If you’re planning to raise capital, bring in investors, or even apply for bank financing, your tax compliance record will be under the microscope. A clean file shows you’re serious about running a responsible, transparent business. That kind of confidence is hard to buy but easy to lose.
So how do you get tax-ready?
Start by making sure your books are organized and up to date. It may sound basic, but you’d be surprised how often we find gaps, missed invoices, outdated depreciation, or expenses coded the wrong way. From there, we run a full review to calculate your taxable income accurately, apply the right deductions, and flag any risk areas early.
That’s the value of working with a team that knows the landscape. At SS &Co, we offer accounting services and help clients build a tax position they can stand behind. One that’s accurate, defendable, and tailored to their business.
And planning doesn’t stop with one assessment. We help our clients create a roadmap with quarterly check-ins, forecasted tax estimates, and strategic advice that keeps them ahead of the game.
Final Thoughts & Proactive Tax Planning
When it comes to corporate tax in the UAE, the smartest move is to plan early and check your tax health regularly. A proactive approach means you’re not scrambling at the last minute or reacting to unexpected bills. Instead, you’re managing your tax affairs with confidence and clarity.
At SS &Co, we believe every business deserves a tax strategy that supports growth, minimizes risk, and keeps things straightforward. Partnering with the right advisors who understand the local rules and your business needs can make all the difference.
If you haven’t had your corporate tax assessment yet, or if you want to ensure you’re fully prepared for the year ahead, let’s talk.
