UAE Corporate Tax: What It Means for Your Next M&A Deal
Since the UAE introduced federal Corporate Tax, every M&A transaction now carries a tax diligence dimension that simply didn't exist a few years ago. Here's what buyers and sellers need to understand.
Free zone qualifying income
Free zone companies can retain a 0% rate on qualifying income, but the conditions are specific and easily breached, buyers need to verify a target's qualifying status has been maintained, not assumed, throughout its trading history.
Transfer pricing documentation
Related-party transactions, common in UAE family businesses and group structures, now require arm's-length pricing documentation. Gaps here represent real contingent liability that should be quantified and reflected in valuation or price adjustment.
Deal structuring implications
Whether a transaction is structured as a share deal or an asset deal now has materially different tax consequences than before 2023, a consideration that should be built into negotiation strategy from the outset, not addressed after terms are agreed.
Corporate Tax due diligence is no longer optional, it should be a standing workstream in every UAE acquisition, not an afterthought.
We integrate tax due diligence directly into every financial due diligence engagement, so findings inform valuation and negotiation in real time rather than surfacing late.