FEDERAL LAW NO. 47 OF 2022
ON THE TAXATION OF CORPORATIONS
& BUSINESSES

HIGHLIGHTS OF LAW NO. 47 OF 2022 ON THE TAXATION OF CORPORATIONS & BUSINESSES

The implementation of the Corporate Tax is designed to assist the UAE in achieving its strategic goals and accelerating its development and transformation. The assurance of a competitive Corporate Tax framework that corresponds to international norms, along with the UAE’s wide network of double tax treaties, will strengthen the UAE’s position as a premier business and investment location. 

Given the UAE’s position as a worldwide commercial hub and global financial centre, the UAE Corporate Tax policy is based on global best practices and combines widely recognised and acknowledged concepts.

One of the main reasons why the UAE has introduced CT is because the current federal budget is financed via revenue from its oil and gas reserves. CT would therefore further diversify the income of the federal budget with a more sustainable income source. The UAE also wants to align itself with the international tax standards which promote transparency, healthy business and prevent harmful tax practices.

CT applies to all persons (individual and corporate) conducting business activities under a commercial business license in the UAE. Businesses engaged in the extraction of natural resources remain subject to the current Emirate-level tax rules and are outside the scope of CT. Banking operations, including those currently taxed at the Emirate level, are also subject to CT. Dividends and capital gains earned by a UAE business from its qualifying shareholdings, as well as qualifying intra-group transactions and reorganisations subject to certain conditions being met, are exempt from CT.

ISSUER OF LAW NO. 47 OF 2022 ON THE TAXATION OF CORPORATIONS & BUSINESSES

The Corporate Tax Law in the UAE is issued by the UAE Federal Tax Authority (FTA).

WHO IS SUBJECT TO THE ‘CORPORATE TAX LAW’?

UAE CT applies to juridical persons incorporated in the UAE, as well as juridical persons effectively managed and controlled in the UAE, as well as foreign juridical persons with a permanent establishment in the UAE.

Individuals will be liable to CT solely if they conduct business or engage in business operations in the UAE, whether directly or through an unincorporated partnership or sole proprietorship.