Corporate Tax in UAE
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Corporate Tax in UAE
In a landmark shift for the business environment of the United Arab Emirates (UAE), the federal corporate tax framework is now in full force — and with it comes a set of crucial compliance requirements, strategic implications, and new opportunities for businesses of all sizes.
Key Tax Rates & Thresholds
- Taxable income up to AED 375,000 remains at a 0 % corporate tax rate.
- Profits exceeding that threshold are subject to a 9 % tax rate.
- From 1 January 2025 the UAE will introduce a Domestic Minimum Top-Up Tax (DMTT) so that large multinational enterprises (MNEs) meet a minimum effective tax rate of 15 % in line with the OECD’s Pillar Two rules.
Who is in scope?
- Mainland companies, free zone companies carrying on qualifying income, foreign branches with UAE presence, and entities that have a “place of effective management” or permanent establishment in the UAE all fall under the umbrella of the Corporate Tax Law.
- Free zone companies still have a 0 % rate opportunity — but only if they meet specific substance and income-source criteria.
Key Compliance & Reporting Developments
- The FTA emphasises that returns and tax liabilities must be submitted and settled within nine months of the end of each tax period.
- New rules for tax groups: As of the tax periods starting 1 January 2025, tax groups must prepare audited aggregated financial statements for corporate tax purposes.
- Recent Cabinet and FTA decisions (e.g., CD 55, CD 63, FTA Decision 5 of 2025) clarify the status of unincorporated partnerships, non-resident persons, and foreign entities under the UAE corporate tax regime.
Strategic Implications for Businesses
- SMEs and startups benefit from the 0 % rate up to AED 375,000 — but they still must register and meet all documentation and tax-return obligations.
- Free zone companies must review their activities and ensure they preserve qualifying status, especially if they transact with mainland UAE or operate outside permissible activities.
- MNEs / investment funds: For groups with global revenues exceeding EUR 750 million (≈ AED 2.99 billion) over two of the past four years, the 15 % DMTT takes centre stage — requiring nuanced structuring and compliance.
- Foreign-incorporated entities / unincorporated partnerships: Recent rulings make their tax-status in the UAE clearer — which means structure, management location, ownership and control matter more than ever.
Penalties & Deadlines
- Late registration or failure to file may trigger a mandatory penalty of AED 10,000.
- Compliance deadlines must be adhered to stringently: missing filing or payment windows may lead to interest, further penalties, or increased scrutiny.
What Businesses Should Do Immediately
- Register with the FTA if not already done.
- Review accounting systems to ensure they align with IFRS and tax-adjustment requirements.
- Map out income and activities: mainland vs free-zone, related-party transactions, presence of PE, etc.
- For tax groups or MNEs, start early with audit-ready aggregated financial statements.
Corporate TAX
1. Corporate Tax Registration
Our Corporate Tax Registration service ensures that your business complies with all legal tax obligations under the relevant authorities. We assist in preparing and submitting the required documentation, obtaining your Tax Registration Number (TRN), and guiding you through the entire registration process. Our goal is to make the procedure smooth and efficient, helping your company stay compliant while focusing on its core operations.
2. Impact Assesment of Corporate Tax on Business
Our Impact Assessment of Corporate Tax service helps businesses understand how new tax regulations affect their financial performance and operations. We analyze your company’s structure, revenue streams, and expenses to identify potential tax liabilities and opportunities for optimization. This assessment enables informed decision-making, ensuring compliance while maximizing profitability and strategic efficiency under the new tax framework.
3. Maintaining Books of Accounts & Records
Our Bookkeeping and Record Maintenance service ensures accurate and up-to-date financial records for your business. We manage your daily transactions, ledgers, and financial statements in compliance with accounting standards and regulatory requirements. By maintaining organized and transparent books of accounts, we help you monitor performance, support audits, and make informed business decisions with confidence.
4. Corporate Tax Planing and Consultancy
Our Corporate Tax Planning and Consultancy service provides expert guidance to help businesses minimize tax liabilities and enhance financial efficiency. We develop tailored tax strategies aligned with your company’s goals while ensuring full compliance with local regulations. Through proactive planning and professional advice, we help you optimize your tax position and achieve sustainable growth.
5. Corporate Tax return Filing
Our Corporate Tax Return Filing service ensures accurate and timely submission of your company’s tax returns in compliance with regulatory requirements. We prepare and review all necessary financial information, identify eligible deductions, and manage the filing process efficiently. With our professional support, you can avoid penalties, maintain compliance, and focus on running your business with peace of mind.
6. Accurate Review of Accounts
Our Accurate Review of Accounts service provides a thorough examination of your financial records to ensure correctness, consistency, and compliance. We identify discrepancies, verify account balances, and assess the accuracy of financial statements. This detailed review helps strengthen internal controls, improve transparency, and support reliable financial decision-making for your business.