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UAE Income Tax Regulations

Understanding income tax regulations in the UAE is crucial for individuals and businesses. As of **April 10, 2025**, the UAE has specific rules regarding income tax.

Personal Income Tax

General Position

Generally, the **UAE does not levy income tax on individuals' salaries, wages, or other personal income**. This applies to both UAE citizens and expatriate residents.

There are **no individual income tax registration or reporting obligations** for the majority of individuals in the UAE.

Corporate Tax

Introduction

The UAE introduced a federal **Corporate Tax (CT)** on the profits of businesses, effective for financial years starting on or after **June 1, 2023**.

Corporate Tax Rates

  • 0% for taxable profits up to AED 375,000.
  • 9% for taxable profits exceeding AED 375,000.

Scope

Corporate Tax applies to most companies and other juridical persons. This includes companies incorporated in the UAE (including Free Zone entities, with specific conditions) and foreign entities with a permanent establishment in the UAE.

Exemptions

There are certain exemptions from Corporate Tax, including:

  • Dividends and capital gains earned by a UAE business from qualifying shareholdings (subject to conditions).
  • Qualifying intra-group transactions and reorganizations (subject to conditions).
  • Specific conditions apply to "Qualifying Free Zone Persons" who may be subject to a 0% rate on "Qualifying Income".

Natural Persons Conducting Business

Natural persons (individuals) who conduct a business or business activity in the UAE will be subject to UAE CT at a rate of **9%** on taxable profits exceeding AED 1 million derived from that business or business activity. Notably, wages, personal investment income, and real estate investment income are **not** considered when determining this turnover threshold.

Important: This information provides a general overview of UAE income tax regulations as of **April 10, 2025**. Tax laws and their interpretations can be complex and are subject to change. For accurate and specific advice related to your situation or business, it is essential to consult with qualified tax advisors in the UAE and refer to the official website of the Federal Tax Authority (FTA): www.tax.gov.ae.

Disclaimer: This page offers general information about UAE income tax regulations. We are not tax advisors, and this information should not be considered professional tax advice. Always consult with qualified professionals and refer to official government sources for the most accurate and up-to-date information.