How to Calculate Corporate Tax in the UAE: A Step-by-Step Guide

Understanding how to calculate your corporate tax is essential for businesses operating in the UAE. With the new corporate tax laws in place, it is crucial to stay on top of your tax obligations to ensure compliance and potentially save money.

Here’s a simplified, step-by-step guide to help you calculate your corporate tax liability in the UAE:

Step 1: Determine Your Taxable Income

The first step is to calculate your taxable income. This is done by subtracting any allowable business expenses, such as operational costs, salaries, and depreciation, from your total revenue. Only your remaining amount is considered taxable income.

Step 2: Apply the Corporate Tax Rate

In the UAE, the corporate tax rate is 9% on taxable income above AED 375,000. Income under this threshold is tax-exempt, making it easier for smaller businesses to stay tax-efficient.

Tip: Always subtract eligible expenses before applying the tax rate to reduce your taxable income.

Step 3: Factor in Deductions and Exemptions

Depending on your business type, there may be specific deductions and exemptions you can claim. For example, businesses operating in free zones or involved in specific activities, such as research and development, may qualify for tax relief.

Need help identifying deductions your business qualifies for? Contact us, and we’ll ensure you’re not missing out on any savings!

Step 4: Calculate the Tax Payable

After applying the corporate tax rate and considering any deductions or exemptions, calculate the total tax payable. This amount is what you owe to the Federal Tax Authority (FTA) to fulfill your tax obligations.

Step 5: Submit Your Tax Return

Once the tax payable is determined, ensure you submit your tax return by the relevant deadline. For businesses whose financial year ends on or after June 30, the deadline is the end of the following month (e.g., September).

Simplify Your Tax Filing with Expert Guidance

While these steps are relatively straightforward, calculating corporate tax can become complicated, especially with numerous deductions and exemptions available. If you need help or are uncertain about any part of the process, we’re here to assist. Contact us for expert guidance to ensure your tax calculations are accurate and your business remains fully compliant.

Contact us today for personalized support with your corporate tax filing. Let us help you simplify your tax obligations and save money along the way!

📧 Email: info@tagconsultancy.ae
📞 Phone: +971 (0) 58 518 4291