Corporate Tax, also known as Corporate Income Tax or Business Profits Tax, is a direct tax imposed on the net income or profit of corporations and businesses.

UAE Corporate Tax applies to legal entities incorporated in the UAE, foreign entities effectively managed and controlled in the UAE, and foreign entities operating through a Permanent Establishment or having a taxable presence in the UAE.

Natural persons are subject to Corporate Tax if they engage in business activities in the UAE, either directly or through an Unincorporated Partnership or sole proprietorship.

The UAE Corporate Tax rates are as follows:

Exemptions from UAE Corporate Tax include UAE Federal and Emirate Governments, certain government-owned companies, businesses involved in UAE Natural Resources extraction or related activities, and Qualifying Public Benefit Entities. 

Certain entities can apply for exemption upon approval, such as Qualifying Investment Funds, pension or social security funds, and UAE juridical persons wholly owned by exempted entities engaged in specified activities. 

Individuals investing in real estate in their capacity should be exempt from the UAE Corporate Tax if they are not required to get a commercial license or license to do such business in the UAE.

All Taxable Persons, including Free Zone Persons, must register for Corporate Tax and obtain a Corporate Tax Registration Number. 

Documents required for Corporate Tax registration in the UAE include proof of address, company details, and audited financial statements showing the accounting period used for financial reporting, with any changes disclosed to the tax authority before filing tax returns.

Yes, most of the businesses in the UAE would have to register corporate tax. Nonetheless, it is exempt under income less than AED 375,000. 

Missing the filing deadline incurs penalties. Late registration attracts a fine of AED 1,000, while late filing is subject to AED 400 per month, in addition to an annualized interest of 14% per month. 

Yes, when they are making money in business inside the UAE. 

Yes. For UAE SMEs with turnover below AED 3 million, there is no corporate tax liability regardless of profit, and any company with profits below AED 375,000 is exempt from corporate tax. 

The deduction planning, keeping proper records and staying within the square are through professional corporate tax consultancy services such as Swift Audit & Advisory.