Corporate Tax Services

Understanding UAE Corporate Tax

Corporate Tax is charged on a business's net (accounting) profit, adjusted for specific items set out in the law — not on revenue or turnover. The first AED 375,000 of taxable income is taxed at 0%, with the 9% rate applying only to profit above that threshold. Every taxable person must register for Corporate Tax and obtain a Tax Registration Number, file annually, and keep records for at least 7 years — even if the business ultimately owes no tax.

Who Is Subject to Corporate Tax?

• UAE mainland companies of all sizes and legal forms
• Free zone entities — taxed at 9% on non-qualifying income, or eligible for 0% on qualifying income only if they meet Qualifying Free Zone Person (QFZP) conditions
• Foreign entities with a UAE permanent establishment or UAE-sourced income
• Individuals conducting business or business activity in the UAE under a commercial licence, once turnover exceeds AED 1 million in a calendar year
• Large multinational groups with global revenue above EUR 750 million, additionally subject to a 15% Domestic Minimum Top-up Tax under the OECD's Pillar Two framework

Corporate Tax Registration Deadlines & the AED 10,000 Penalty

Registration is mandatory for every taxable person, including those that expect to owe 0% tax — there is no revenue exemption from the registration requirement itself. FTA Decision No. 3 of 2024 sets the registration windows: businesses already licensed before 1 March 2024 follow a fixed schedule by licence issuance month, while businesses incorporated on or after 1 March 2024 must register within 3 months (commonly referenced as a 90-day window) of incorporation. Missing your window triggers a flat AED 10,000 late-registration penalty under Cabinet Decision No. 75 of 2023 (as amended by Cabinet Decision No. 10 of 2024). Since 7 May 2025, the FTA has been operating a penalty-waiver initiative (Public Clarification CTP006) that exempts or refunds this AED 10,000 penalty for businesses that file their first tax return within 7 months of their first tax period's end — we assess your eligibility for this waiver as part of onboarding.

Small Business Relief & Exemptions

Resident taxable persons with revenue not exceeding AED 3 million in the relevant and all prior tax periods can elect for Small Business Relief under Ministerial Decision No. 73 of 2023, treating them as having no taxable income for that period. Following Ministerial Decision No. 131 of 2025, this relief has been extended to apply through tax periods ending on or before 31 December 2029, giving eligible small businesses continued relief from Corporate Tax compliance obligations beyond simple registration and filing.

Transfer Pricing & Tax Grouping

• Transfer pricing documentation (Local File and Master File, where thresholds are met) for related-party and connected-person transactions, as required under Ministerial Decision No. 97 of 2023
• Arm's-length pricing analysis in line with OECD Transfer Pricing Guidelines, referenced directly by the UAE regime
• Tax grouping structuring to consolidate group filings into a single return where beneficial, subject to common ownership and other conditions under the Corporate Tax Law

Impact on Free Zones

Free zone entities can maintain a 0% rate on qualifying income if they meet Qualifying Free Zone Person conditions — adequate substance in the UAE, deriving qualifying income as defined, and not electing out of the regime. Cabinet Decision No. 100 of 2023, together with Ministerial Decisions No. 229 and No. 230 of 2025, sets out and refines which activities and income streams qualify. Non-qualifying income earned by a QFZP is still taxed at 9%, so accurate income-stream classification is essential — we assess your operations against the current criteria and advise on any restructuring needed.

Compliance & Deadlines

Under Article 53 of the Corporate Tax Law, returns are due within 9 months of the end of your tax period. For businesses on a standard calendar-year financial year, that means the FY2025 Corporate Tax return and any tax due must be filed by 30 September 2026. We manage registration, return preparation, filing and supporting documentation end to end, with record-keeping aligned to the 7-year retention requirement under Article 56 of the law.