Skip to main content

Ask a Lawyer·Tax

TaxAnswered

Does corporate tax replace VAT in the UAE?

Asked by Anonymous·Jun 26, 2026·1 answers
A business owner is confused about whether the new corporate tax and VAT are the same thing.

This answer is AI-generated by LEXAI. It is general legal information, not legal advice — verify anything you act on with a licensed UAE lawyer. How LEXAI uses AI

1 answers

Best answer
L
LEXAI

AI-generated answer

Jun 26, 2026
No. Corporate tax and VAT are two separate taxes in the UAE, and corporate tax does not replace VAT — both can apply to the same business at the same time. VAT is a consumption tax charged on most goods and services at a standard rate of 5%, introduced in 2018; businesses collect it from customers and remit it to the Federal Tax Authority, with registration required once taxable supplies exceed the mandatory VAT threshold. Corporate tax, introduced for financial years starting on or after 1 June 2023, is a tax on a business's net profit at 0% up to AED 375,000 and 9% above that. A business can therefore be registered for both, filing periodic VAT returns and an annual corporate tax return separately, each with its own registration, deadlines, and records. They are administered by the same authority (the FTA) but under different laws. Because your VAT and corporate tax obligations are independent, check both through the FTA's EmaraTax portal. If you need help managing both, you can compare verified UAE legal professionals and tax advisers on LEXAI.
Helpful (0)

Facing something similar?

Describe your own situation below. Your details go to our team, and a suitable lawyer in the LEXAI directory may receive them so they can contact you about it.

Pick your situation so your enquiry can reach a suitable lawyer in the LEXAI directory who works in that area.

Your details stay private and are used only to handle your enquiry. Your enquiry may be offered to a suitable lawyer automatically, and may be offered to another if there is no response, so a lawyer can contact you about it. Privacy policy

Related Questions

Underlying law

Keep reading

Corporate Commercial

Corporate Tax in UAE Explained: Who Pays, the Rates, and What's Exempt

A plain-English guide to corporate tax in UAE under Federal Decree-Law No. 47 of 2022: who pays, the 9% rate and 0% band, exempt income, free-zone qualifying income, and how it differs from VAT.

9 min read

Corporate Commercial

Small Business Relief for UAE Corporate Tax: The AED 3 Million Rule Explained

How UAE Small Business Relief works — the AED 3m revenue cap, the 0% vs 9% bands, and who should (and should not) elect for it.

8 min read

Corporate Commercial

Free Zone Qualifying Income & 0% Corporate Tax in the UAE

Which free zone companies actually keep the 0% corporate tax rate — the Qualifying Free Zone Person test, qualifying income and the de minimis rule.

8 min read