If a business has earned Taxable Income of AED 1 million, what will be the UAE Corporate Tax amount payable?
If the business has an annual Revenue of AED 3 million or less and elects for Small Business Relief for Tax Periods ending on or before December 31, 2026, the business will be treated as having no Taxable Income, and no Corporate Tax will be payable. If a Taxable Person with Taxable Income of AED 1 million is not eligible for Small Business Relief or chooses not to elect it, the Corporate Tax liability will be calculated as follows:
- Taxable Income of AED 375,000, subject to Corporate Tax at 0%: AED 375,000 x 0% = AED 0.
- Taxable Income exceeding AED 375,000, subject to Corporate Tax at 9%: (AED 1,000,000 – AED 375,000) = AED 625,000 x 9% = AED 56,250.
The UAE Corporate Tax liability for the Tax Period will be AED 0 + AED 56,250 = AED 56,250.Tax credits may further reduce the total UAE Corporate Tax Payable.
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