Taxable income is the amount on which a business pays corporate tax. Under UAE Federal Decree-Law No. 47 of 2022, it is calculated from accounting net profit (per financial statements), then adjusted for specific items required by UAE tax law.
Start with: Accounting Net Profit. ADD BACK: disallowed expenses (entertainment above limit, fines, undocumented expenses). DEDUCT: exempt income, qualifying income for QFZPs, and tax losses carried forward. Result = Taxable Income.
0% on taxable income up to AED 375,000 (or via Small Business Relief). 9% above AED 375,000. Free zone QFZPs: 0% on qualifying income, 9% on non-qualifying income. Multinationals subject to Pillar Two: 15% minimum effective rate.
Where related-party transactions are not at arm's length, the FTA may adjust taxable income upward. Maintaining transfer pricing documentation is critical.
Finanshels prepares the full corporate tax computation and files the corporate tax return on your behalf. See our corporate tax services.
