UAE Corporate Tax: The Computation

A model will write you a summary of this tax in a minute. What it will not do is hand you a worked case you can check: every figure in Chapter 9 was computed in a spreadsheet and then recalculated, cell by cell, through an independent formula engine, against expected values written down by hand first. Every number in the text carries the article it comes from.

A short working book on one calculation: how a UAE business gets from the profit in its accounts to the Corporate Tax it actually pays, under Federal Decree-Law No. 47 of 2022 and the decisions issued under it. Ten chapters, about 6,400 words, 29 pages. Delivered as both PDF and EPUB.

What is in it

1. The deadline, and what missing it costs. Nine months from the period end for the return (Article 53(1)) and for the payment (Article 48(1)), one date for both. The two penalties under Cabinet Decision No. 75 of 2023 behave differently: late filing is AED 500 a month, or part month, stepping to AED 1,000 from the thirteenth, and it is charged even where no tax is due.

2 and 3. The shape of the computation, and the adjustments. Accounting income to Taxable Income in the order Article 20(2) sets out: exempt dividends (Article 22), the 50% entertainment add-back (Article 32), the Article 33 non-deductibles, Article 28 expenditure not for the Business.

4. Small Business Relief, and the election that can cost you. The AED 3,000,000 Revenue test is cumulative and, under Article 2(3) of Ministerial Decision No. 73 of 2023, one-way. Electing in a loss year destroys the Tax Loss. The chapter also carries the end date most published guidance still gets wrong: Ministerial Decision No. 131 of 2026 extended the relief to Tax Periods ending on or before 31 December 2029.

5. Free Zone. The Article 18 conditions and the de minimis test, non-qualifying Revenue not above the lower of 5% of Revenue and AED 5,000,000, cited to Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 265 of 2023. Guidance still citing Cabinet Decision 55 of 2023 or Ministerial Decision 139 of 2023 is citing repealed instruments; the thresholds did not change, the authority did, and the book says so.

6. Interest, and the AED 12,000,000 cliff. Article 30(3) is a switch, not an allowance. One dirham over the amount specified by the Minister (Ministerial Decision No. 126 of 2023) puts the whole Net Interest Expenditure against the 30% of EBITDA cap, not the excess. The worked case: AED 10,400,000 disallowed, Taxable Income AED 20,400,000, tax AED 1,802,250 on AED 10,000,000 of accounting profit, against a 9% headline rate.

7 and 8. Tax losses and the rates. The Article 37 75% cap, the AED 375,000 nil-rate band under Cabinet Decision No. 116 of 2022, and the foreign tax credit.

9. Seven worked cases. Five of them are the same small business with one thing changed each time, so the effect of each change is visible on its own, plus the interest case and a dated filing case.

10. The filing checklist, in the order the computation runs.

What it is not. It is not tax advice, it does not know your business, and it cannot be relied on as either. It is a description of a public law, written so you can follow the arithmetic and check it against the source. Where the law leaves a choice open, the book says so instead of choosing for you. Dates and thresholds are those in force at the time of writing.

Written by Neil Sangwaiya of Bindler (bindler.co), which turns new regulations into tools small companies can buy. If you want the calculation to run rather than to read, the companion is the UAE Corporate Tax Computation Workbook, the Excel model whose recalculation produced the figures in this book.