With the UAE’s new corporate tax regime (effective from June 2023 and evolving into 2025), LLC companies in Dubai are now subject to structured tax rules:
- Tax Rates:
- 0% on taxable income up to AED 375,000
- 9% on income exceeding that threshold
- 15% top-up tax for large multinationals under OECD Pillar Two rules
- Compliance Requirements:
- Mandatory corporate tax registration with the Federal Tax Authority (FTA)
- Annual tax return filing within 9 months of the end of the financial year
- Proper bookkeeping and audited financial statements for LLCs
- Transfer pricing documentation for companies with cross-border dealings
- Tax Benefits for LLCs:
- Small businesses with profits under AED 375,000 enjoy full exemption
- Certain free zone entities may still qualify for preferential rates if they meet substance and activity requirements
- Deductible expenses (e.g., salaries, rent, utilities) help reduce taxable income
- Alignment with global tax standards enhances credibility with investors
This shift means LLC owners must balance compliance obligations with strategic tax planning to maximize benefits while avoiding penalties.
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