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Calculating Corporate Tax on a profit

My company made AED 900,000 profit. How much Corporate Tax do I pay?

The situation

Corporate Tax is 0 percent on taxable income up to AED 375,000 and 9 percent on the rest. Taxable income is accounting profit after tax adjustments.

The law

  • Art 3, Federal Decree-Law 47 of 2022: Rates: 0 percent up to the threshold, 9 percent above
  • Art 20, Federal Decree-Law 47 of 2022: Taxable income from accounting profit with adjustments

What it means for you

If no adjustments apply: (AED 900,000 minus AED 375,000) times 9 percent = AED 47,250. If AED 40,000 of entertainment was booked, half is added back, so taxable income becomes AED 920,000 and tax AED 49,050. Check related party pricing and owner pay too, because they can change the figure.

What to do

  1. Start from audited or final profit.
  2. Add back non-deductible items.
  3. Deduct exempt income and allowed losses.
  4. Apply 9 percent above AED 375,000 and file.

We can do this for youStandard Corporate Tax return: taxable income computation at 0% and 9%, adjustments, losses and payment: AED 4,750

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