United Arab Emirates

Under the Emirate level tax decrees, income tax is payable under a progressive rate system, with rates up to 55%. However, in practice, these tax decrees have not been applied. Instead, branches of foreign banks are subject to income tax at a flat rate of 20% under separate Emirate level bank decrees. Companies engaged in UAE oil and gas and petrochemical activities are subject to income tax at 55%+ rates under their individual UAE concession agreements or fiscal letters.

The Federal UAE CT Law, which is effective from the financial years beginning on or after 1 June 2023, will be applicable across all Emirates and will apply to all business and commercial activities, except to the following persons (subject to conditions):

1. UAE Government Entity;
2. UAE Government Controlled Entity;
3. Person engaged in an Extractive Business in the UAE;
4. Person engaged in a Non-Extractive Natural Resource Business in the UAE;
5. Qualifying Public Benefit Entity;
6. Qualifying Investment Fund;
7. Public pension or social security fund, or a private pension or social security fund that is subject to regulatory oversight of the competent authority in the State and that meets any other conditions that may be prescribed by the Minister;
8. Juridical person incorporated in the State that is wholly owned and controlled by certain Exempt Persons; and
9. Any other Person as may be determined in a decision issued by the Cabinet at the suggestion of the Minister.

UAE CT will be applicable at the following rates: 

*‘Qualifying Income’ will be specified in a subsequent Cabinet decision. Please refer to our comments under the ‘Free Zone’ section.

**There could be a different tax rate applicable for large multinationals that meet the criteria under ‘Pillar Two’ of the OECD Base Erosion and Profit Shifting project (i.e. that have consolidated global revenues above EUR 750m). Further details on the same are awaited.