Definition
Taxable Income is the portion of a business’s profit that is subject to UAE Corporate Tax. It is calculated by adjusting accounting profits (from financial statements) to include or exclude items as specified under the Corporate Tax Law.
Key points
Practical example
A Dubai LLC reports net profit of AED 1,200,000. After deducting exempt dividend income of AED 200,000 and adding back AED 50,000 of non-deductible expenses, the taxable income is AED 1,050,000. Corporate tax due = (1,050,000 – 375,000) × 9% = AED 60,750.
Why it matters
Understanding taxable income is essential for accurate corporate tax planning, reducing risks of underpayment, and ensuring full compliance with UAE tax law.