Category

3.1. Types of Taxes

Theory

00:00 Types of taxes;
00:36 Personal income tax in UAE;
01:25 Corporate income tax framework;
02:25 Global minimum tax – UAE’s alignment (2025 onward);
03:23 VAT overview & special zones;
04:16 Tax benefits in UAE free zones;
05:49 UAE taxation recap.

Key Terms & Definitions

Personal Income Tax — A tax on individual income. Not applicable in the UAE—salaries, freelance income, investments, and capital gains are tax-free.

Corporate Income Tax (CT) — A federal tax applied to business profits in the UAE, effective from 1 June 2023.

Taxable Profit — Business profit calculated under IFRS or IFRS for SMEs, adjusted per UAE Corporate Tax Law.

Corporate Tax Rate

  • 0% on taxable profits up to AED 375,000
  • 9% on taxable profits above AED 375,000

Corporate Tax Registration — A mandatory requirement for all UAE businesses, including exempt and free zone entities.

Corporate Tax Filing Deadline — The corporate tax return must be filed within 9 months after the financial year-end.

Free Zones — Special economic areas where businesses may benefit from 0% corporate tax on qualifying income, subject to conditions.

Designated Zones — Specific VAT zones treated as outside the UAE for VAT purposes for certain goods transactions.

Global Minimum Tax — A 15% minimum tax applying to multinational groups with global turnover above EUR 750 million, effective from 2025.

Value Added Tax (VAT) — A 5% consumption tax applied to most goods and services in the UAE since 2018.

Zero-Rated VAT — Taxable supplies charged at 0%, allowing recovery of input VAT (e.g. exports, international transport).

VAT-Exempt Supplies — Supplies with no VAT charged and no input VAT recovery, such as residential rent and certain financial services.

VAT Registration Threshold

  • Mandatory: Taxable turnover above AED 375,000
  • Voluntary: Taxable turnover above AED 187,500