UAE Corporate Tax: What Actually Changed for Foreign-Owned Companies

Since financial years starting on or after 1 June 2023, the UAE applies a federal corporate tax under Federal Decree-Law No. 47 of 2022. The headline rate is 9% on taxable profits above AED 375,000, with 0% below that threshold. VAT, introduced in 2018, remains at 5%.

The free zone regime is conditional

A Qualifying Free Zone Person can still benefit from a 0% rate, but only on qualifying income, and only while maintaining adequate substance in the free zone, meeting de minimis rules on non-qualifying revenue and preparing audited financial statements. It is a regime you keep by complying, not a permanent exemption.

Registration and filing are mandatory

Every taxable person must register with the Federal Tax Authority and file a corporate tax return within nine months of the end of the tax period, even when the result is a loss or the rate applied is 0%. Late registration and late filing carry administrative penalties.

What European groups should check

Transfer pricing documentation for intra-group flows, permanent establishment exposure in the country of the parent, Economic Substance Regulations where relevant, and the interaction with the OECD Pillar Two 15% minimum tax for groups above EUR 750 million of consolidated revenue.

Our position

We do not provide tax opinions; we coordinate with licensed UAE tax advisors and the client's home-country advisors so that the structure chosen at entry is the one that still works three audits later.