Each Taxable Person, whether an individual or legal entity, is eligible for the 0% Corporate Tax rate on their Taxable Income up to AED 375,000, regardless of whether they operate one or multiple businesses. However, this exemption does not apply to Qualifying Free Zone Persons, who are subject to a 9% Corporate Tax rate on all non-Qualifying Income.

Each legal entity or natural person subject to UAE Corporate Tax is generally treated as a single Taxable Person. When multiple legal entities form a Tax Group to be treated as a single Taxable Person, they still have only one AED 375,000 threshold. In other words, the threshold for a Tax Group does not increase with the number of legal entities it comprises. If it’s determined that a Taxable Person has artificially divided their business into separate entities to benefit from the AED 375,000 threshold more than once, this could be deemed an abusive arrangement and lead to penalties and adjustments to Taxable Income by the Federal Tax Authority.