FTA Income Tax Slabs in the UAE for FY24

Taxes were introduced in the United Arab Emirates (UAE) as part of a Gulf Cooperation Council (GCC) initiative to diversify regional economies. The GCC is a regional, intergovernmental, political and economic union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. As a result, value-added tax (VAT) and excise tax have been introduced in the UAE. 

The official taxation body in the UAE is the Federal Tax Authority ( FTA). Emara Tax is the tax platform through which over 199 government services are provided online.

The Federal Decree-Law No. 7 of 2017 on Tax Procedures provides guidance to taxpayers in the form of income tax tables for individuals and businesses. Familiarize yourself with these tax tables which identify applicable tax brackets and tax rates. Doing so is essential for effective tax planning and to ensure you remain compliant with the tax laws of the UAE. There may be different income tax brackets or income tax slabs applicable on different types of income depending on the business structure and vehicle used. 

Here you will learn more about:

• the fiscal year in the UAE
• personal income tax (PIT) rates
• corporate income tax (CIT) rates
• capital gains tax (CGT) rates 
• withholding tax (WHT) rates
• value-added tax (VAT) rates

Fiscal Year in the UAE

Personal Income Tax (PIT) Rates in the UAE

Personal income is not taxed in the United Arab Emirates currently. Wages, personal investment income and real estate income are considered personal income. Therefore, there are no individual tax reporting or registration obligations in the UAE. 

However under the Federal Decree-Law No. 47 of 2022 on the Taxation on Corporations and Businesses (UAE CT Law), natural persons who conduct a business or business activity in the United Arab Emirates are subject to a corporate tax rate of 9% where the total turnover derived from the business or business activity exceeds AED 1 million.

Corporate Income Tax Rates in the UAE for FY24

There has been growing tax reform in the Middle East region. This includes changes in the UAE such as the implementation of excise tax and VAT. Federal corporate tax was introduced in 2022 and applies to a taxpayer’s financial years beginning on or after 1 June 2023.

Taxpayers need to be familiar with Free Zones (FZs) and Qualifying Free Zone Persons (QFZPs). The former refers to designated geographical areas within the UAE that are so specified. A QFZP refers to a company, government agency, non-governmental organization or international company that is incorporated or registered in a Free Zone.

Corporate Income Tax Due Dates

Capital Gains Tax in the UAE

There is no separate Capital Gains Tax (CGT) under the UAE CT Law. Any gains arising from the disposal of capital assets form part of the corporate taxable income.

Withholding Tax Rates for Residents and Non-Residents in the UAE

The withholding tax (WHT) rate is currently 0%. Given the current tax rate, no registration or filing obligation is expected of taxpayers. However, if a taxpayer pays WHT, a credit may be made available which may reduce the CT payable.

Value-Added Tax (VAT) Rates in the UAE

Value-added tax (VAT) applies to most goods and services, although some goods and services are subject to a 0% rate or benefit from an exemption from VAT. Certain transactions in goods between companies established in the Designated Free Zones (DFZs) may not be subject to VAT. 

A business that fails to comply with VAT obligations may be subject to fines and penalties.