As we mentioned, corporate tax is one of the most recent developments in Dubai's tax system, which began to apply in June 2023. Although this tax is new to the emirate, it is still one of the lowest in the world. It has a general rate of 9% on net profits , this tax is considerably lower than the global average. For example, while here it has a general rate of 9%, in countries such as Spain it reaches 25%. In the United States , companies must pay a federal rate of 2% , not counting additional state taxes. However, there are jurisdictions that still have lower or even zero taxes, such as Cayman or Bermuda , where this type of tax does not apply.
General rate: 9% on net profits.
Initial exemption: The first 375,000 UAE el salvador phone number library dirhams (approximately 00,000 euros) are exempt from tax.
Application: Affects businesses generating revenue within Dubai or the local UAE market.
Let's see this with a practical example. If a company has net profits of ,000,000 UAE dirhams (approximately $272,000):
In Dubai , the first 375,000 dirhams (approximately $02,000) are exempt, so 9% will be applied on the remaining 625,000 dirhams. This equates to a tax of 56,250 dirhams (approximately $5,300).
In Spain , with a general rate of 25% and no specific exemptions for small businesses in this case, the tax would be calculated on the total of ,000,000 dirhams. This would result in a payment of 250,000 dirhams (approximately $68,000).
As you can see, the company in Dubai would pay less than a quarter of the taxes it would