Base Corporate Tax Law — articles 1–71

In the application of the provisions of this Decree-Law, the following words and expressions shall have meanings assigned against each, unless the context otherwise requires: State: United Arab Emirates. Federal Governme…

Corporate Tax shall be imposed on Taxable Income, at the rates determined under this Decree-Law, and is payable to the Authority under this Decree-Law and the Tax Procedures Law.

1. Corporate Tax shall be imposed on the Taxable Income at the following rates: a. 0% (zero percent) on the portion of the Taxable Income not exceeding the amount specified by virtue of a resolution to be issued by the C…

1. The following Persons shall be exempt from Corporate Tax: a. A Government Entity. b. A Government Controlled Entity. c. A Person engaged in an Extractive Business, that meets the conditions of Article (7) of this Decr…

1. A Government Entity shall be exempt from Corporate Tax and the provisions of this Decree-Law shall not apply thereto. 2. Notwithstanding Clause (1) of this Article, a Government Entity shall be subject to the provisio…

1. A Government Controlled Entity shall be exempt from Corporate Tax and the provisions of this Decree-Law shall not apply thereto. 2. Notwithstanding Clause (1) of this Article, a Government Controlled Entity shall be s…

1. A Person shall be exempt from the Corporate tax and the provisions of this Decree-Law shall not apply to its Extractive Business if it meets all of the following conditions : a. The Person directly or indirectly holds…

1. A Person shall be exempt from Corporate tax and the provisions of this Decree-Law shall not apply to its Non-Extractive Natural Resource Business where all of the following conditions are met: a. The Person directly o…

1. A Qualifying Public Benefit Entity shall be exempt from Corporate Tax if all of the following conditions are met: a. It is established and operated for any of the following: I. Exclusively for religious, charitable, s…

1. A mutual fund may apply to the Authority to be exempt from Corporate Tax as a Qualifying Mutual fund where all of the following conditions are met: a. The mutual fund or the mutual fund's manager is subject to the reg…

1. Corporate Tax shall be imposed on a Taxable Person at the rates determined under this Decree-Law. 2. For the purposes of this Decree-Law, a Taxable Person shall be either a Resident Person or a Non-Resident Person. 3.…

1. A Resident Person, which is a juridical person, is subject to Corporate Tax on its Taxable Income derived from the State or from outside the State, in accordance with the provisions of this Decree-Law. 2. The Taxable …

1. Income shall be considered a State Sourced Income in any of the following cases: a. Where it is derived by a Resident Person. b. Where it is derived by a Non-Resident Person and the income received has been paid or ac…

1. A Non-Resident Person shall be deemed to have a Permanent Establishment in the State in any of the following cases: a. If it has a fixed or permanent place in the State through which the Business of the Non-Resident P…

1. For the purposes of Clause (6) of Article (14) of this Decree-Law, an Investment Manager shall be considered an independent agent when acting on behalf of a Non-Resident Person, if all of the following conditions are …

1. For the purposes of this Decree-Law, unless an application is made under Clause (8) of this Article, and subject to any conditions the Minister may prescribe, the Unincorporated Association itself shall not be conside…

1. A Family Foundation may submit an application to the Authority to be treated as an Unincorporated Association for the purposes of this Decree-Law if all of the following conditions are met: a. The Family Foundation wa…

1. A Qualifying Free Zone Person is a Free Zone Person that meets all of the following conditions: a. Maintains actual and sufficient existence in the State. b. Derives Qualifying Income as specified in a resolution issu…

1. A Qualifying Free Zone Person may elect to be subject to Corporate Tax at the rates specified under Clause (1) of Article (3) of this Decree-Law. 2. The election under Clause (1) of this Article shall be effective fro…

1. The Taxable Income of each Taxable Person shall be determined separately, on the basis of adequate, standalone financial statements prepared for financial reporting purposes in accordance with the accounting standards…

1. A Taxable Person that is a Resident Person may elect to be treated as not having derived any Taxable Income for a Tax Period where: a. the Revenue of the Taxable Person for the relevant Tax Period and previous Tax Per…

The following income and related expenses shall not be taken into account in determining the Taxable Income: 1. Dividends and other profit distributions received from a juridical person that is a Resident Person. 2. Divi…

1. Income from an equity participation shall be exempt from Corporate Tax, subject to the conditions of this Article. 2. A Equity participation means, owning equity at 5% (five percent) or more of the shares or capital o…

1. A Resident Person may elect to not take into account the income, and associated expenses, of its Foreign Permanent Establishments in determining its Taxable Income. 2. Where Clause (1) of this Article applies, a Resid…

Income derived by a Non-Resident Person from the operation of aircraft or ships in international transportation shall not be subject to Corporate Tax where all of the following conditions are met: 1. The Non-Resident Per…

1. No gain or loss needs to be taken into account in determining the Taxable Income in relation to the transfer of one or more assets or liabilities between two Taxable Persons that are members of the same Qualifying Gro…

1. No gain or loss needs to be taken into account in determining Taxable Income in any of the following circumstances: a. A Taxable Person transfers its entire Business or an independent part of its Business to another P…

1. Expenses incurred wholly and exclusively for the purposes of the Taxable Person's Business that are not capital in nature shall be deductible in the Tax Period in which they were incurred, subject to the provisions of…

Notwithstanding paragraph (b) of Clause (2) of Article (28) of this Decree-Law, Interest Expense shall be deductible for the Tax Period in which it is incurred, subject to the other provisions of Article (28) and Article…

1. A Taxable Person's Net Interest Expense shall be deductible up to (30%) (thirty percent) of the Taxable Person's accounting earnings before interest, taxes, depreciation and amortization (EBITDA) for the relevant Tax …

1. No deduction shall be allowed for Interest Expense incurred on a loan obtained, directly or indirectly, from a Related Party in respect of any of the following transactions: a. A dividend or profit distribution to the…

1. Subject to Article (28) of this Decree-Law, a Taxable Person shall be allowed to deduct (50%) (fifty percent) of any entertainment, amusement, or recreation expenses incurred during a Tax Period. 2. Clause (1) of this…

No deduction is allowed for: 1. Donations, grants or gifts made to an entity that is not a Qualifying Public Benefit Entity. 2. Fines and penalties, other than the amounts awarded as compensation for damages or breach of…

1. In determining the Taxable Income, transactions and arrangements between Related Parties shall meet the arm's length standard as specified in Clauses (2), (3), (4) and (5) of this Article and any conditions that may b…

1. For the purposes of this Decree-Law, "Related Parties" means any of the following: a. Two or more natural persons who are related up to the fourth degree of kinship or affiliation, including by way of adoption or guar…

1. Without prejudice to the provisions of Article (28) of this Decree-Law, a payment or benefit provided by a Taxable Person to its Connected Person shall be deductible only if and to the extent that the payment or benef…

1. A Tax Loss can be offset against the Taxable Income of subsequent Tax Periods to arrive at the Taxable Income for those subsequent Tax Periods. 2. The amount of Tax Loss used to reduce the Taxable Income for any subse…

1. A Tax Loss or a portion thereof may be offset against the Taxable Income of another Taxable Person where all of the following conditions are met: a. Both Taxable Persons are juridical persons. b. Both Taxable Persons …

1. Tax Losses can only be carried forward and utilized in accordance with the provision of Clause 2 of Article (37) of this Decree-Law provided that: a. From the beginning of the Tax Period in which the Tax Loss is incur…

1. A Resident Person, which for the purposes of this Decree-Law shall be referred to as a "Parent Company", can make an application to the Authority to form a Tax Group with one or more other Resident Persons, each refer…

1. For the purposes of Article (40) of this Decree-Law, a Tax Group shall be formed, or a new Subsidiary shall join an existing Tax Group from the beginning of the Tax Period specified in the application submitted to the…

1. For the purposes of determining the Taxable Income of a Tax Group, the Parent Company shall consolidate the financial results, assets and liabilities of each Subsidiary for the relevant Tax Period, eliminating transac…

For the purposes of this Decree-Law, all amounts shall be quantified in the United Arab Emirates dirham. Any amount quantified in another currency shall be converted at the applicable exchange rate set by the Central Ban…

Corporate Tax due under this Decree by Law shall be paid in the following order: 1. By using the withholding tax credit at source attributable to the Taxable Person and determined pursuant to Article (46) of this Decree …

1. The income earned in the State by a non-resident person shall be subject to tax at a rate of (0%) zero percent in form of withholding tax, or at any other rate for withholding tax to be determined by a Cabinet resolut…

1. If a person becomes subject to tax during a taxation period, the corporate tax payable under Article (3) of this Decree-Law may be reduced by an amount equal to the amount of the withholding tax credit for the same ta…

1. Corporate Tax due under Article (3) of this Decree-Law can be reduced by the amount of Foreign Tax Credit for the relevant Tax Period. 2. The Foreign Tax Credit under this Decree-Law cannot exceed the amount of Corpor…

A Taxable Person shall settle the Corporate Tax Payable under this Decree-Law within (9) nine months from the end of the relevant Tax Period, or by such other date as determined by the Authority.

1. A Taxable Person may submit an application to the Authority for a Corporate Tax refund in accordance with the provisions of the Tax Procedures Law in the following circumstances: a. The Withholding Tax Credit availabl…

1. The Taxable Person may claim the unused amount of tax credits that may arise from the incentives or facilities prescribed pursuant to Paragraph (g) of Clause (2) of Article (20) and Clause (3) of Article (44) of this …

1. This Article applies to a transaction or an arrangement if, having regard to all relevant circumstances, it can be reasonably concluded that: a. the entering into or carrying out of the transaction or arrangement, or …

1. Any Taxable Person shall register for Corporate Tax with the Authority in the form and manner and within the timeline prescribed by the Authority and obtain a Tax Registration Number, except in circumstances prescribe…

1. A Person with a Tax Registration Number shall file a Tax Deregistration application with the Authority where there is a cessation of its Business or Business Activity, whether by dissolution, liquidation, or otherwise…

1. Subject to Article (51) of this Decree-Law, a Taxable Person shall file a Tax Return, as applicable, to the Authority in the form and manner prescribed by the Authority no later than (9) nine months from the end of th…

1. The Authority may, by notice or through a decision issued by the Authority, request a Taxable Person to submit the financial statements used to determine the Taxable Income for a Tax Period in the form and manner and …

1. The Authority may, by notice or through a decision issued by the Authority, require a Taxable Person to file together with their Tax Return a disclosure containing information regarding the Taxable Person's transactio…

1. Notwithstanding the provisions of the Tax Procedures Law, a Taxable Person shall maintain all records and documents for a period of (7) seven years following the end of the Tax Period to which they relate that: a. Sup…

1. A Taxable Person's Tax Period is the Fiscal Year or part thereof for which a Tax Return is required to be filed. 2. For the purposes of this Decree-Law, the Fiscal Year of a Taxable Person shall be the Gregorian calen…

Notwithstanding Article (57) of this Decree-Law, a Taxable Person can make an application to the Authority to change the start and end date of its Tax Period, or use a different Tax Period, subject to the conditions to b…

1. A Person may make an application to the Authority for a clarification regarding the application of this Decree-Law or the conclusion of an advance pricing agreement with respect to a transaction or an arrangement prop…

1. A Person may be subject to a Corporate Tax assessment in accordance with the Tax Procedures Law and the decisions issued in the implementation of its provisions. 2. Notwithstanding the provisions of the Tax Procedures…

1. A Taxable Person's opening balance sheet for Corporate Tax purposes shall be the closing balance sheet prepared for financial reporting purposes based on the accounting standards applicable in the State on the last da…

The Minister may delegate his powers under this Decree-Law, in full or in part, to the Authority, where the Minister deems appropriate.

The administrative policies, procedures and general instructions in relation to the requirements imposed on a Person under this Decree-Law shall be issued by the Authority in coordination with the Ministry.

All governmental authorities in the State shall fully cooperate with the Authority to carry out whatever is required to implement the provisions of this Decree-Law and provide the Authority with any data, information and…

Revenue from corporate tax, supplementary tax, and administrative fines collected pursuant to this Decree-Law shall be subject to sharing between the Federal Government and local governments in accordance with the provis…

To the extent that the terms of an international agreement in force in the State are inconsistent with the provisions of this Decree-Law, the terms of the international agreement shall prevail.

1. Subject to the powers conferred to the Cabinet under this Decree-Law, the Minister and the Authority shall issue the necessary decisions, within their respective powers, to implement the provisions of this Decree-Law.…

Any text or provisions contrary to or inconsistent with the provisions of this Decree-Law shall hereby be repealed.

This Decree-Law shall apply to Tax Periods commencing on or after 1 June 2023.

This Decree-Law shall be published in the Official Gazette and shall enter into force (15) fifteen days following the date of its publication.