How to Calculate Corporate Tax for Your UAE Business in 2025

Corporate tax

How to Calculate Corporate Tax for Your UAE Business in 2025

Starting January 1, 2025, the UAE will implement a 15% minimum top-up tax on large multinational enterprises (MNEs).

This change aims to boost non-oil revenue and keep tax fairness.

For non-MNEs and other businesses in the UAE, the corporate tax framework is a bit different — it varies from 0% to 9%.

So, for better financial planning and, of course, to comply with the UAE laws, you’ll need to understand how to calculate corporate tax for your business based on your taxable income.

This is the only guide you need to find the total tax you’ll need to pay.

What is Corporate Tax in the UAE?

Corporate tax is a federal levy on your business’s net profits. From June 1, 2023, the UAE govt. has added a standard corporate tax rate of 9% on taxable income above AED 375,000. Profits up to this amount are not taxed at all.

But beginning January 1, 2025, to align with the OEDS’s global tax framework, the UAE has implemented a 15% minimum top-up tax on large MNEs with consolidated global revenues of €750 million or more.

What is Taxable Income?

Taxable income is the part of your company’s income, after deductions and exemptions, that you’ll need to pay tax for. To find your taxable income, you can use the following steps:

How to Find Taxable Income

  1. Start with Accounting Income

Begin with your net profit as reported in your financial statements, that you prepared in accordance with International Financial Reporting Standards (IFRS.

  1. Adjust for Taxable and Non-Taxable Items

Edit this accounting income by adding any expenses that are not deductible for tax purposes and subtracting any income exempt from tax. So, you won’t have to pay additional taxes.

  1. Consider Unrealized Gains and Losses

If you follow a realization basis, include only realized gains or losses in your taxable income. Exclude unrealized gains or losses until the asset is sold or transferred.

  1. Account for Losses:

If your business has incurred losses, you may be able to carry them forward to offset against future taxable income, subject to specific conditions outlined in the UAE Corporate Tax Law.

How to Calculate Corporate Tax?

Now that you have found your taxable income, let’s calculate your corporate tax liability depending on your business type and income level. 

  1. Standard Businesses
  • Tax Rates: 0% on taxable income up to AED 375,000; 9% on income exceeding AED 375,000.
  • Example:
    • Taxable Income: AED 500,000.
    • Calculation:
      • First AED 375,000 at 0%: AED 0 tax.
      • Remaining AED 125,000 at 9%: AED 11,250 tax.
    • Total Corporate Tax: AED 11,250.
  1. Large Multinational Enterprises (MNEs)
  • Tax Rates: a 15% minimum tax applies with consolidated global revenues of €750 million or more.
  • Example:
    • Taxable Income in UAE: AED 1,000,000.
    • Calculation:
      • First AED 375,000 at 0%: AED 0 tax.
      • Remaining AED 625,000 at 15%: AED 93,750 tax.
    • Total Corporate Tax: AED 93,750.
  1. Freelancers and Sole Proprietors
  • Tax Rates: Subject to the same rates as standard businesses: 0% up to AED 375,000; 9% above AED 375,000.
  • Example:
    • Taxable Income: AED 300,000.
    • Calculation:
      • Entire income at 0%: AED 0 tax.
    • Total Corporate Tax: AED 0.
  1. Free Zone Entities
  • Tax Rates: 0% on qualifying income; 9% on non-qualifying income.
  • Example:
    • Qualifying Income: AED 400,000.
    • Non-Qualifying Income: AED 200,000.
    • Calculation:
      • Qualifying income at 0%: AED 0 tax.
      • Non-qualifying income:
        • First AED 375,000 at 0%: AED 0 tax.
        • Remaining AED 25,000 at 9%: AED 2,250 tax.
    • Total Corporate Tax: AED 2,250.

How to Pay Corporate Tax in the UAE

If your business is just about to break the taxable income threshold, then this is your cue to do all the things necessary to make paying taxes as easy as possible. Here are the steps:

  • Obtain a Tax Registration Number (TRN)

Before you can pay corporate taxes, you need a Tax Registration Number (TRN). The Federal Tax Authority (FTA) issues this unique number, which you’ll need for all tax-related transactions.

To get your TRN:

  • Fill out the online registration form on the FTA website.
  • Give basic business details like company name, legal structure, trade license number, and contact information.
  • Submit supporting documents such as:
    • A copy of your trade license.
    • Memorandum of Association (MOA).
    • Passport copies of owners, managers, and authorized signatories.
    • UAE IDs of all owners and signatories.
  • Complete Corporate Tax Registration

Now, you must register for corporate tax through the FTA portal:

  • Log in to your account and select the corporate tax registration option.
  • Provide details about your business activities, revenue, and any special tax conditions.
  • Submit your application and wait for approval.
  • The FTA may request additional documents during the review process.

Once approved, your TRN will be available on the portal, and you’ll receive a tax registration certificate.

  • Access the EmaraTax Portal

The EmaraTax portal is the platform used for all tax-related filings and payments. Log in using your TRN and go to the corporate tax section to view your tax liability and filing status.

  • Submit and Verify Payment
  • Pay the tax using bank transfers, credit/debit cards, or eDirham cards.
  • After making the payment, ensure you receive a confirmation receipt.
  • Log in to your EmaraTax account to verify that your payment has been processed and your liability has been cleared.

Make Tax Management Easier with Reflechir

Once you’ve figured out your taxable income and how much you owe, the next challenge is keeping everything organized for smooth payments and filings.

This is where Reflechir can quietly make things easier for you. We’ll automate your accounts payable and receivable, and help you stay on top of your finances. We’ll have all your numbers organized, accurate, and ready whenever you need them—be it for tax filing or just regular business operations.

 

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