UAE Corporate Tax Law

Articles

1. Article FDL-47-2022, Article 1

   Article 1 of Federal Decree-Law No. 47 of 2022 establishes the legal framework for corporate taxation in the UAE. This article defines the scope and applicability of the law, outlining which entities are subject to corporate tax obligations. The provision sets out the foundational principles governing taxation of corporations and businesses operating within the UAE jurisdiction, establishing the legislative basis for corporate tax assessment and collection throughout the federation.

2. Article Article 2, Federal Decree-Law No. 47 of 2022

   Article 2 of FDL-47-2022 establishes the scope of application for corporate taxation in the UAE. The law applies to resident and non-resident entities engaged in business activities within the emirate, including corporate bodies, partnerships, and other legal entities. The provision defines taxable persons and outlines which entities fall within the jurisdiction of UAE corporate tax. Certain exemptions may apply to specific entities as detailed elsewhere in the legislation. The article forms the foundational basis for determining tax liability and applicable taxpayer categories under the UAE corporate tax framework.

3. Article Article 3

   Tax rates: 0% on taxable income up to AED 375,000; 9% on taxable income above AED 375,000.

4. Article Article 4, Federal Decree-Law No. 47 of 2022

   Article 4 of Federal Decree-Law No. 47 of 2022 establishes the scope of taxable persons subject to corporate taxation in the UAE. The provision defines entities required to register and pay corporate tax, including resident and non-resident entities that derive income from UAE sources. It clarifies the criteria for determining tax residency and outlines obligations for entities meeting specified thresholds. The article ensures that both local and foreign businesses engaged in commercial activities fall within the tax framework, subject to exemptions provided elsewhere in the law.

5. Article Article 5, Federal Decree-Law No. 47 of 2022

   Article 5 of Federal Decree-Law No. 47 of 2022 establishes the scope of taxable persons subject to UAE corporate tax. The provision defines which entities—including resident companies, permanent establishments of foreign entities, and certain specified business structures—must comply with corporate tax obligations. The article clarifies that taxable persons include those with economic substance or activities within the UAE, subject to exemptions and special provisions outlined elsewhere in the law. This foundational provision ensures clear identification of entities liable for corporate taxation under the federal regime.

6. Article Article 6, Federal Decree-Law No. 47 of 2022

   Article 6 of Federal Decree-Law No. 47 of 2022 establishes exemptions from corporate tax for specific entities and activities. The article provides that certain organizations, including non-profit entities, government entities, and organizations designated by the Ministry of Finance, are exempt from UAE corporate taxation. Additionally, the law grants exemptions for specific economic sectors and activities that may be determined by Cabinet decision, supporting strategic national development objectives. These exemptions aim to encourage investment in priority sectors while maintaining fiscal policy flexibility for the UAE government.

7. Article Article 7, Federal Decree-Law No. 47 of 2022

   Article 7 of Federal Decree-Law No. 47 of 2022 establishes exemptions from corporate tax for certain entities and activities. The provision grants tax relief to specified organizations, including those engaged in charitable, educational, and healthcare services that meet prescribed conditions. Additionally, the article provides exemptions for entities designated by the UAE government for strategic development purposes. These exemptions apply only where the entity's primary activities align with the exemption criteria and are conducted on a non-profit basis where applicable. The competent authority may impose additional conditions or requirements to verify exemption eligibility.

8. Article Article 8, Federal Decree-Law No. 47 of 2022

   Article 8 of FDL-47-2022 establishes provisions governing the determination of taxable income for corporations and businesses. The article outlines rules for calculating net profit by deducting allowable business expenses from gross revenue. It specifies that only expenses directly related to generating taxable income qualify for deduction, subject to substantiation and compliance with accounting standards. The provision ensures consistent application of income determination across all taxable entities while preventing improper tax avoidance through unrelated or excessive deductions. Specific exceptions and limitations may apply based on the nature of business activities and regulatory guidance issued by UAE tax authorities.

9. Article FDL-47-2022, Article 9

   Article 9 of Federal Decree-Law No. 47 of 2022 establishes provisions regarding the determination of taxable income for corporations and businesses. The article outlines the methodology for calculating net profit by deducting allowable expenses from gross income. Under FDL-47-2022, eligible deductions include operational costs, depreciation, and other business expenses incurred in generating taxable income. The article specifies that only expenses directly related to business activities qualify for deduction. Certain expenses, such as personal expenditures and penalties, are explicitly excluded from deductible amounts. The regulation ensures that taxable income reflects the actual economic performance of the enterprise while maintaining consistency with international tax standards.

10. Article Article 10, FDL-47-2022

    Article 10 of Federal Decree-Law No. 47 of 2022 addresses the calculation of corporate tax liability. The provision establishes the methodology for determining taxable income by allowing qualifying deductions from gross revenues. Under FDL-47-2022, eligible expenses include operational costs, depreciation, and other prescribed business expenditures. The article specifies that only expenses directly related to generating taxable income may be deducted. Additionally, it outlines restrictions on certain deductions and sets forth documentation requirements for substantiating claimed expenses. The framework ensures consistent application of tax principles across UAE corporations and businesses.

11. Article Article 11, Federal Decree-Law No. 47 of 2022

    Article 11 of Federal Decree-Law No. 47 of 2022 addresses the deductibility of business expenses in calculating corporate tax liability. The provision establishes that taxpayers may deduct ordinary and necessary expenses incurred in generating taxable income, provided such expenses are substantiated by proper documentation. Deductible items typically include employee wages, rent, utilities, and professional fees directly related to business operations. However, certain expenses—such as personal expenditures, charitable donations, and taxes themselves—are explicitly excluded from deduction. The law requires that deductions be reasonable in amount and genuinely attributable to producing business income. Taxpayers must maintain comprehensive records to support claimed deductions during tax audits.

12. Article Article 12, Federal Decree-Law No. 47 of 2022

    Article 12 of Federal Decree-Law No. 47 of 2022 addresses the treatment of losses in corporate tax calculations. Under this provision, businesses may carry forward net losses to offset taxable income in subsequent years, subject to conditions set by tax authorities. The law permits loss utilization to reduce corporate tax liability over specified periods, promoting tax neutrality for entities experiencing temporary financial difficulties. These provisions establish a framework for loss relief that aligns with international corporate tax standards while maintaining revenue protection mechanisms under UAE's corporate taxation regime.

13. Article Article 13 - FDL-47-2022 UAE Corporate Tax Law

    Article 13 of Federal Decree-Law No. 47 of 2022 addresses tax deductions and allowable expenses for corporations and businesses. It establishes that entities may deduct ordinary and necessary business expenses incurred during the tax year, including employee salaries, operating costs, and depreciation of assets. The law specifies that deductions must be substantiated with supporting documentation and directly related to business operations. Certain expenses, such as personal expenditures and penalties, are explicitly excluded from deductible costs. This provision enables businesses to reduce their taxable income by legitimate operational expenses while maintaining compliance with tax regulations.

14. Article Article 18

    Qualifying Free Zone Person: subject to 0% on Qualifying Income, 9% on non-qualifying income.

15. Article Article 21

    Small business relief: businesses with revenue ≤ AED 3,000,000 may elect to be treated as having no taxable income.

Q&As that cite this law

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  Who must register for UAE Corporate Tax?

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  Free Zone vs Mainland Company in UAE?