Stay updated with the essential rules, deadlines, and requirements every business must follow under the UAE corporate tax framework.
Introduction
The introduction of UAE Corporate Tax has changed the way businesses operate and manage their financial responsibilities. Effective for financial years starting on or after 1 June 2023, the UAE’s Corporate Tax regime aims to align the country with global transparency standards while ensuring fair, consistent taxation.
For businesses operating in the UAE, understanding corporate tax compliance is essential to avoid penalties, ensure smooth operations, and maintain financial credibility.
Who Is Subject to Corporate Tax in the UAE?
Corporate Tax applies to:
- UAE mainland companies
- Free Zone entities (with specific conditions)
- Foreign companies with a permanent establishment in the UAE
- Individuals conducting business activities under a commercial licence
Some entities may be exempt, such as qualifying public benefit entities and government organizations, provided they meet the FTA criteria.
Corporate Tax Rate in the UAE
The UAE corporate tax structure is simple and business-friendly:
- 0% on taxable income up to AED 375,000
- 9% on taxable income above AED 375,000
- Different rules apply to large multinational corporations under Pillar Two of the OECD BEPS framework
Key Corporate Tax Compliance Requirements
1. Corporate Tax Registration
All taxable businesses must register for Corporate Tax through the Federal Tax Authority (FTA) portal.
Registration is mandatory even if your profit falls below the taxable threshold.
2. Maintaining Proper Accounting Records
Businesses must maintain:
- Financial statements
- Revenue and expense records
- Supporting documents for transactions
- Contracts, invoices, and audit reports
These records must be kept for 7 years, as per FTA requirements.
3. Preparing Tax-Ready Financial Statements
Corporate Tax is calculated based on accurate financial statements prepared under IFRS or IFRS for SMEs.
Proper bookkeeping ensures the right tax calculation and prevents compliance issues.
4. Filing Annual Corporate Tax Returns
Every taxable business must file:
- One Corporate Tax Return for each financial year
- Submission within 9 months from the end of the financial year
For example, if your financial year ends on 31 December 2024, the filing deadline is 30 September 2025.
5. Paying Corporate Tax on Time
Any payable tax must also be settled within 9 months from the end of the relevant tax period.
Delays may lead to administrative penalties.
Corporate Tax for Free Zone Companies
Free Zone entities may qualify for a 0% tax rate on qualifying income only if they meet all FTA conditions, such as:
- Maintaining adequate substance in the Free Zone
- Earning qualifying income (as per specific rules)
- Not conducting business with UAE mainland (unless allowed under regulations)
Non-qualifying income is taxed at 9%.
Consequences of Non-Compliance
Failure to comply with Corporate Tax rules may result in:
- Administrative penalties
- Increased audits
- Delayed business processes
- Difficulty obtaining loans or investor trust
Compliance ensures financial transparency and smooth business operations.
How AI Global Consultants Can Help
Understanding and navigating UAE Corporate Tax regulations can be challenging, especially for SMEs and international businesses.
Our team helps you with:
- Corporate Tax registration
- Filing annual tax returns
- Tax calculations and adjustments
- Maintaining compliance records
- Advisory on Free Zone qualifying income
- Audit preparation and ongoing support
We ensure your business remains fully compliant and avoids unnecessary penalties.
Conclusion
Corporate Tax compliance is now a key responsibility for every UAE business. Staying informed about the rules, deadlines, and documentation requirements helps protect your business and ensures long-term growth.
With expert guidance, you can manage your tax obligations easily and focus on what matters most — growing your business.