For years, the UAE was known as a tax-free haven. But with the introduction of corporate tax, business owners especially small and medium-sized ones are starting to ask what this means for them. If you’re running a company here, this is a change you can’t afford to ignore.
What Exactly Is Corporate Tax?
Corporate tax is simply a tax on your company’s profits. Unlike VAT, which is added to the price of goods and services, corporate tax is based on the net profit your business earns at the end of the year.
The rate is 9% on profits above AED 375,000. Anything below that is taxed at 0%, which means many startups and small businesses won’t feel an immediate impact. Still, it’s smart to prepare now.
Who Has to Pay?
- Registered UAE companies that make profits over the threshold.
- Foreign companies with a branch or permanent presence in the UAE.
- Free zone businesses (though some may qualify for exemptions, depending on compliance with the rules).
Freelancers and very small businesses may fall outside the scope, but this depends on income levels and the type of work they do.
What Small Businesses Should Do
- Get Your Books in Order
Gone are the days when rough records were enough. Proper bookkeeping is now essential. - Know the Exemptions
Certain industries, like natural resources, have special rules. Free zone businesses may still enjoy tax incentives, but only if they meet compliance conditions. - Prepare for Audits
With corporate tax in place, financial transparency will be taken more seriously. Clear, accurate records will save you stress down the road. - Plan Ahead with Advice
Even if you’re under the threshold today, thinking ahead will help you scale without surprises later.
How Mirhaa Can Help
At Mirhaa Taxation, we guide businesses through every step of the process. From assessing whether you fall under corporate tax, to structuring your accounts, and filing the right reports on time, we make sure you stay compliant and worry-free.
Our job is simple: to let you focus on running your business while we handle the tax side.
Final Thoughts
Corporate tax is new to the UAE, but it’s here to stay. The best move you can make is to treat this as an opportunity to tighten your financial practices and work with professionals who can keep you on track. With the right preparation, corporate tax doesn’t have to be a burden it can actually help your business grow stronger.
