According to Emirati tax decrees, income tax is paid according to a system of progressive rates that can reach up to 55%. However, in practice, these decrees have not been implemented. Instead, foreign bank branches are subject to a fixed rate of 20% under separate Emirati banking decrees.

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Companies that engage in oil and petrochemical activities in the UAE are subject to income taxes at variable rates set out in their concession agreements or individual tax letters.

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The UAE Federal Corporation Tax Act, which comes into force for each taxable person's new tax year as of June 1, 2023, is applicable in all Emirates and applies to all business and commercial activities, with the exception of the following exempt entities (subject to conditions):
• UAE government entities.
• Entities controlled by the UAE government.
• People engaged in extractive activities in the UAE.
• People who carry out non-extractive activities of natural resources in the UAE.
• Authorized public utility entities.
• Eligible investment funds.
• Public pension or social security funds, or private pension or social security funds subject to regulatory oversight by the competent State authority and that meet the conditions prescribed by the Minister.
• State-constituted legal persons that are wholly owned and controlled by certain exempt persons.
• Any other person determined in a decision issued by the Cabinet at the proposal of the Minister.
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Tariffs Of Corporate Tax