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8.1.1. Corporate Income Tax

The UAE is a federation of seven emirates (Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, Fujairah and Ras Al-Khaimah). There are no direct taxes at the federal level and instead each emirate has its own direct taxation system. The separate emirate-based direct taxation systems are quasi-identical and all theoretically provide for the taxation of corporate and commercial profits at progressive rates of up to 55%. In practice, however, tax is only levied on oil and gas companies and branches of foreign banks, as follows:

  • Rates of up to 55% apply to oil and gas companies. Different rates may be agreed with the authorities under concession agreements; and
  • A flat rate of 20% applies to branches of foreign banks.

Businesses registered in the free zones are exempt from corporate income tax for certain years and, thereafter, extendable (see Sec. 10.2.).

Alternate Minimum Tax

There is no minimum tax.