With taxation in the UAE now introduced to local businesses, a question we have been frequently asked is: are there any exemptions?
Within corporate finance, there are opportunities for businesses to minimize their obligations and improve their cash flow, and the UAE is no different. Here, there are corporate tax exemptions that allow qualifying business owners relief from the tax.
Here, we will highlight some of the key tax exemptions currently in place in the country.
- Anything government-related. This applies to both government entities and government-controlled entities. Essentially, the 9% corporate tax only applies to the private sector, with anything public sector exempt. This will likely not have any impact on your business operations, but it’s worth knowing.
- Natural resource businesses. Businesses involved in the extraction of natural resources have actually been subject to their own taxation rules for a lot longer than the rest of the country. This is because there is more of a global vision for this industry, as it competes with markets across the world rather than locally. If your business is involved in the extraction of natural resources, there will be no change as a result of the corporate tax.
- Any business earning under AED 375,000. The corporate tax is only applicable to businesses that earn above AED 375,000 per tax year. If your business generates less than AED 375,000 a year, it will not be subject to the tax. This is the case for both freelancers and business owners. If you do earn above the threshold, only what is earned above that number is subject to the tax.
- Currently, Free Zones. The 9% corporate tax is being rolled out in phases, meaning free zone companies are not currently subject to it. At the moment, it’s only relevant to mainland companies, with announcements expected on Free Zone eligibility in the future. Once an update is provided by the Ministry of Finance, we will share the announcement on our website.
- Small Businesses Eligible for Small Business Relief. Until December 31st 2026, the UAE government are offering small business relief for companies with revenue below AED 3,000,000. Your business may well be eligible for the relief, so it’s worth checking with the Ministry of Finance as cases are circumstantial.
We are currently offering business owners a complimentary corporate tax consultation, to ensure you’re up to date with your obligations. Reach out to our team if you have any doubts and we will be more than happy to clear them up for you.