Yes, UAE Corporate Tax will be subject to UAE entities owned by UAE or GCC nationals also. The tax applies without distinction based on whether the ownership is local or international. It is determined by the incorporation or residence in the UAE, or the presence of a Permanent Establishment or taxable nexus in the UAE, regardless of the nationality of the individual founders or owners.

Corporate Tax and VAT are two different types of Taxes. Both will be applicable if your business is registered for VAT, if your Business is not registered for VAT, You may still have to pay Corporate Tax.

The Ministry of Finance is in charge of bilateral/multilateral tax agreements and international information exchange for tax purposes. It also has the authority to issue additional regulations for UAE Corporate Tax and other federal taxes.
The Federal Tax Authority will oversee the administration, collection, and enforcement of UAE Corporate Tax and other federal taxes. They will issue guides, respond to clarifications, and conduct awareness sessions as needed.

The Corporate Tax Law defines “Business” as any economic activity, whether continuous or short-term, conducted by any Person with a profit motive and organizational structure. Profitability is not a requirement for an activity to be considered a Business for UAE Corporate Tax. All activities and assets used by companies and other juridical persons are generally considered part of a “Business” for tax purposes.

UAE incorporated companies, including Limited Liability Companies, Private Joint Stock Companies, Public Joint Stock Companies, and other juridical persons, are considered as Resident Persons for Corporate Tax.
Any entity incorporated in the UAE is automatically considered a ‘Resident’ Person for UAE Corporate Tax. Similarly, a natural person involved in business activities in the UAE is also considered a Resident Person for Corporate Tax purposes.
A foreign company may be treated as a Resident Person if it is “effectively managed and controlled” in the UAE. Factors like the location where the board of directors makes strategic decisions can be indicative of effective management and control.

The Taxable Income for a Tax Period is the accounting net profit (or loss) of the business, adjusted as per the Corporate Tax Law. The net profit (or loss) is based on financial statements prepared following International Financial Reporting Standards (IFRS).
Adjustments include unrealized gains/losses (based on the chosen realization principle), exempt income like qualifying dividends and capital gains, gains/losses on transfers within a Qualifying Group, gains/losses from qualifying business restructuring transactions, non-allowable deductions for Corporate Tax, transactions with Related Parties and Connected Persons, transfers of Tax Losses within a group meeting relevant conditions, incentives or tax reliefs, and any other adjustments specified by the Minister.

Small Business Relief exempts eligible businesses (with Revenue of AED 3 million or below in relevant Tax Periods ending on or before December 31, 2026) from Corporate Tax calculation, payment, and regular reporting requirements.
An eligible business can opt to be treated as having no Taxable Income for the specified Tax Period and is not required to calculate Taxable Income or file a full Corporate Tax Return.
If a business’s Revenue exceeds AED 3 million in any Tax Period, it loses eligibility for Small Business Relief in that and future Tax Periods.

No. Once your Revenue exceeds AED 3 million in a Tax Period, you will no longer be eligible for Small Business Relief in the current or future Tax Periods.
Please note that the Small Business Relief threshold of AED 3 million is applicable for Tax Periods that end on or before 31 December 2026.

No, eligibility for Small Business Relief is based on the Taxable Person’s overall Revenue, Irrespective of the number of Businesses or Business Activities conducted by that Taxable Person.

Tax Losses accumulated by a Taxable Person in a previous Tax Period, before opting for Small Business Relief, can be carried forward. This allows the Taxable Person to utilize these Tax Losses in future periods where Small Business Relief has not been elected or does not apply.

You lose eligibility to choose Small Business Relief if your Revenue surpasses AED 3 million in a Tax Period when filing your Corporate Tax Return for that period or any subsequent periods.
There’s no requirement to notify the Federal Tax Authority beforehand if you anticipate your Revenue exceeding AED 3 million. However, it’s crucial to maintain proper records to facilitate the accurate calculation of your Taxable Income at the end of the Tax Period, ensuring compliance with the regular Corporate Tax obligations.

You lose eligibility to choose Small Business Relief if your Revenue surpasses AED 3 million in a Tax Period when filing your Corporate Tax Return for that period or any subsequent periods.
There’s no requirement to notify the Federal Tax Authority beforehand if you anticipate your Revenue exceeding AED 3 million. However, it’s crucial to maintain proper records to facilitate the accurate calculation of your Taxable Income at the end of the Tax Period, ensuring compliance with the regular Corporate Tax obligations.

The Standard rate of VAT in the UAE is currently 5%.

In many countries, sales taxes are typically applied only to transactions involving goods and are imposed solely on the final sale to the consumer. On the other hand, VAT is levied on both goods and services throughout the supply chain, including the final sale. VAT is also imposed on imports to ensure fairness for domestic providers.
VAT is often preferred by many countries due to its more sophisticated approach. It requires businesses to act as tax collectors on behalf of the government, reducing misreporting and tax evasion. This system is seen as more effective in managing tax collection and promoting a level playing field for businesses.

A business must register for VAT if its taxable supplies and imports exceed the mandatory registration threshold of AED 375,000. Furthermore, a business may choose to register for VAT voluntarily if its supplies and imports are less than the mandatory registration threshold, but exceed the voluntary registration threshold of AED 187,500. Similarly, a business may register voluntarily if its expenses exceed the voluntary registration threshold. This latter opportunity to register voluntarily is designed to enable start-up businesses with no turnover to register for VAT. A Person required to register for VAT needs to submit a registration application to the FTA within 30 days of being required to register.

No. VAT is payable in addition to applicable customs duties. VAT is computed on the value that includes the customs duties.

• VAT will be charged at 0% in respect of the following main categories of supplies:
• Exports of goods and services to outside the GCC;
• International transportation, and related supplies;
• Supplies of certain sea, air and land means of transport (such as aircraft and ships);
• Certain investment grade precious metals (e.g. gold, silver, of 99% purity);
• Newly constructed residential properties, that are supplied for the first time within 3 years of their construction;
• Supply of certain education services, and supply of relevant goods and services;
• Supply of certain healthcare services, and supply of relevant goods and services.

Businesses are required to keep records which will enable the Federal Tax Authority to identify the details of the business activities and review transactions. Any taxable person must retain VAT invoices issued and received for a minimum of 5 years.

Penalties will be imposed in cases of non-compliance with tax legislation. Examples of actions and omissions that may trigger penalties include:

• A person failing to register when required to do so;
• A person failing to submit a tax return or to make a payment within the required period;
• A person failing to keep the records required under the issued tax legislation;
• Tax evasion offenses where a person performs a deliberate act or omission with the intention of violating the provisions of the issued tax legislation.

The rent of a commercial building will be subject to VAT at 5%, but the rent of a residential building will generally be exempt from VAT.

The rent or sale of a residential part of the building shall be treated as zero-rated or exempt, depending on whether this is a first supply within the first three years of completion of construction or a subsequent supply. The rent or sale of a commercial part of the building shall be treated as subject to VAT at 5%. Tax that cannot be directly attributed to exempt supplies or taxable supplies should be apportioned, and only the portion relating to the taxable supplies (at 0% and 5%) may be recovered.

Purchase of goods and services by tourists in the UAE will be subject to VAT. However, tourists will be eligible to reclaim the VAT incurred on their purchase of goods under the Tax Refunds for Tourists Scheme subject too meeting certain conditions.