What is the Corporate Tax rate in the UAE?

Article 3 – Corporate Tax Rate 1. Corporate Tax shall be imposed on the Taxable Income at the following rates: a. 0% (zero percent) on the portion of the Taxable Income not exceeding the amount specified in a decision issued by the Cabinet at the suggestion of the Minister. b. 9% (nine percent) on Taxable Income that exceeds the amount specified in a decision issued by the Cabinet at the suggestion of the Minister. 2. Corporate Tax shall be imposed on a Qualifying Free Zone Person at the following rates: a. 0% (zero percent) on Qualifying Income. b. 9% (nine percent) on Taxable Income that is not Qualifying Income under Article 18 of this Decree-Law and any decision issued by the Cabinet at the suggestion 1 Definition added as per Federal Decree-Law No. 60 of 2023. 2 Definition added as per Federal Decree-Law No. 60 of 2023. Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 8 of the Minister in respect thereof. 3. Without prejudice to the provisions of Clauses (1) and (2) of this Article, the Cabinet at the suggestion of the Minister shall issue a decision regulating all cases, provisions, conditions, rules, controls, and procedures for imposing the Top-up Tax on Multinational Enterprises and the exemptions therefrom, so that the total percentage of the effective tax imposed on them is (15%) fifteen percent. 3 Chapter Three – Exempt Person

For more information on the timeline to register for Corporate Tax for other types of Taxable Persons, please refer to the relevant FTA Decision and Public Clarification published on the FTA’s website3. 3 Are there any exceptions to the requirement to register for Corporate Tax for small businesses? A natural person who conducts a Business or Business Activity in the UAE is only required to register for Corporate Tax if the total Turnover from such Business or Business Activities exceeds AED 1 million within a Gregorian calendar year. For more information on the taxation of natural persons under Corporate Tax Law, please refer to the guidance published on the FTA’s website4. *Note: The AED 1 million registration threshold for natural persons is separate from the AED 3 million Revenue threshold for Small Business Relief (see section 6) 4 What is the Corporate Tax rate applicable to a small business? There is no special Corporate Tax rate applicable for a small business. The Taxable Income will be subject to standard Corporate Tax at the following rates: - 0% on the portion of the Taxable Income not exceeding AED 375,000; and - 9% on the portion of the Taxable Income that exceeds AED 375,000. The Corporate Tax rates above also apply when the total Turnover derived by a natural person from its Business or Business Activities in the UAE in a Gregorian calendar year exceeds AED 1 million, starting from Gregorian calendar year 2024. 3 FTA Decision No.3 of 2024 - The Timeline specified for Registration of Taxable Persons for Corporate Tax for the purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments. https://tax.gov.ae/en/legislation.aspx CTP003 Corporate Tax Public Clarification- First Tax Period of a juridical person. https://tax.gov.ae/en/taxes/corporate.tax/corporate.tax.guides.references.aspx 4 Corporate Tax Guide - Taxation of Natural Persons under the Corporate Tax Law. https://tax.gov.ae/en/taxes/corporate.tax/corporate.tax.guides.references.aspx

3.11. Corporate Tax rate for natural persons The below rates apply to the total Taxable Income of a natural person, i.e. the Taxable Income derived from all Businesses or Business Activities conducted in the UAE by such natural person and not the Taxable Income of each Business or Business Activity separately. When the Turnover derived by the natural person in a Gregorian calendar year exceeds the AED 1 million, the Taxable Income of a natural person will be subject to Corporate Tax at the following rates:19 • 0% on the portion of the Taxable Income not exceeding AED 375,000. • 9% on the portion of the Taxable Income that exceeds AED 375,000. Example 17: Natural person receives a Wage and conducts Business in the UAE A natural person, Miss P, based in the UAE, conducted the following activities during a Gregorian calendar year: • Worked for 3 months under an employment contract and earned AED 200,000. • Worked as a freelance graphic designer in the UAE generating AED 1,600,000 Turnover (assume AED 400,000 of deductible expenses). • Ran a sole proprietorship that sold mobile phones and accessories in the UAE and overseas. The gross income from domestic sales amounted to AED 1,200,000, and AED 800,000 from overseas sales (assuming AED 1,400,000 of deductible expenses). Step 1 – Calculation of the Turnover The income derived from freelance activity, and from the sole proprietorship (both domestic and overseas sales, as the latter is related to the activity conducted in the UAE) are taken into consideration in computing the Turnover. Wage income is not considered. Therefore: Turnover = 1,600,000 + 1,200,000 + 800,000 = AED 3,600,000. As such, the natural person is considered to conduct Business or Business Activities that are subject to Corporate Tax, and the Corporate Tax is computed on the Taxable Income, which is the Accounting Income after the relevant required adjustments as per the Corporate Tax Law. 19 Article 3 of the Corporate Tax Law and Articles 2(1) and 3 of Cabinet Decision No. 116 of 2022. Corporate Tax Guide | Taxation of natural persons under the Corporate Tax Law | CTGTNP1 25