UAE
CORPORATE TAX
REGISTRATION & COMPLIANCE
Get expert support for Corporate Tax registration and filing. Avoid penalties and stay fully compliant.
- Corporate Tax from 9% on profits above 375,000 AED
- Mandatory FTA registration and filing, even when a 0% rate applies
- 10,000 AED penalty for late registration
- Incorrect filings can lead to regulatory and financial exposure
UAE CORPORATE TAX IS NOW IN EFFECT
IS YOUR BUSINESS COMPLIANT?
The UAE introduced Corporate Tax effective June 1, 2023. Companies with financial years starting after this date have to comply with the registration, reporting, and filing obligations set out by the Federal Tax Authority
Many businesses remain unregistered due to:
- Uncertainty around free zone exemptions
- Confusion about deadlines and filing requirements
- The assumption that “0% tax” means “no compliance needed”
Failure to register and comply can lead to large penalties and operational risks.
WHO MUST REGISTER FOR CORPORATE TAX?
Corporate Tax applies to all businesses operating under a UAE commercial license, including:
- Mainland companies
- Free zone businesses
- Groups of companies (can register as a tax group)
- Individuals conducting business activities
Important: New businesses must register within 3 months of incorporation.
WHAT IS UAE CORPORATE TAX?
Corporate Tax is a direct tax on the net profits of businesses operating in the UAE. It is a key part of the UAE’s move toward global tax transparency and international best practices:
- 0% tax on profits up to AED 375,000
- 9% standard tax rate above this threshold
- 15% effective tax rate for large multinational groups under OECD Pillar Two (Global Minimum Tax) rules
CORPORATE TAX FOR MAINLAND COMPANIES VS FREEZONES
Mainland Companies
- Subject to Corporate Tax on taxable profits
- Mandatory registration with the Federal Tax Authority
- Required to file annual Corporate Tax returns
- Full compliance with the UAE Corporate Tax law applies
Free Zone Companies
- Corporate Tax applies, but 0% rates may be available if conditions are met
- Mandatory FTA registration and annual filing still required
- Audited financial statements needed to claim 0% eligibility
- Restrictions apply when dealing with the mainland UAE
- Each structure must be assessed individually
CORPORATE TAX COMPLIANCE REQUIREMENTS
- Register with the Federal Tax Authority
- File one Corporate Tax return per financial year
- Maintain accurate financial statements
- Comply with transfer pricing rules and OECD guidelines
- Keep proper financial and tax records to support filings
Many companies underestimate the documentation, interpretation, and ongoing compliance involved, especially where group structures or cross-border activity
exists.
AVOID COSTLY MISTAKES & PENALTIES
Non-compliance with UAE Corporate Tax regulations can lead to:
- 10,000 AED penalty for late registration
- Incorrect filings and financial exposure
- Increased scrutiny from tax authorities
- Audit, banking, and group reporting complications
Professional guidance ensures accurate compliance and reduced risk.
HOW CREATION BUSINESS CONSULTANTS SUPPORT YOU
We provide end-to-end UAE Corporate Tax support, including:
- Corporate Tax registration
- Assessment of eligibility for 0% Corporate Tax treatment
- Tax planning and advisory
- Financial statement preparation
- Corporate Tax return filing
- Ongoing compliance and support
We manage the process, so your internal team doesn’t have to interpret evolving guidance or make regulatory judgment calls.
HOW IT WORKS
Navigating corporate tax requirements in the UAE can seem overwhelming, especially for growing businesses or new investors. That’s why we follow a clear, step-by-step process designed to simplify compliance, minimise risk, and set your business up for long-term success.
Step 1: Initial Consultation
We begin with a discovery meeting to understand your business model, industry, and current tax position.
Step 2: Needs Assessment & Planning
Our tax team identifies your compliance obligations, risks, and planning opportunities locally and across borders.
Step 3: Strategy Development
We tailor a tax strategy aligned with your commercial goals, whether you require structuring, advisory, or ongoing compliance.
Step 4: Implementation & Compliance
We support you with full execution from registrations and filings to documentation and internal processes.
Step 5: Ongoing Advisory & Updates
You will receive continuous guidance on evolving regulations, changes in UAE or GCC tax laws, and how they affect your business operations.
WHY WORK WITH CREATION BUSINESS CONSULTANTS?
- 20+ years of experience advising businesses in the MENA region
- Senior advisor led engagements, not junior handoffs
- Deep understanding of the UAE mainland and free zone structures
- Practical, commercially focused tax advice
- End-to-end support from registration to compliance
WHAT OUR CLIENTS SAY
“We have been working with Creations Business Consultants for the last 4 years and have had an excellent experience so far. The company has a very professional team, who can take care of all your business needs from incorporation to tax filings/advice to annual returns filings. I would highly recommend Creations.”Saidiwakar Santhanam
ENSURE YOUR COMPANY IS 100% COMPLIANT
UAE Corporate Tax compliance is not optional, and mistakes can be costly. Get expert support to navigate UAE Corporate Tax and avoid unnecessary risks and penalties.
UAE CORPORATE TAX FAQs
The introduction of a competitive Corporate Tax system, aligned with international best practices, aims to solidify the UAE’s status as a premier global business and investment hub. This move supports the UAE’s development goals and strategic transformation. Additionally, it underscores the UAE’s dedication to adhering to global tax transparency standards and curbing harmful tax practices.
In the UAE, most businesses conducting commercial activities within the country are subject to corporate tax. This includes:
- Mainland companies: Businesses registered in any of the UAE’s emirates outside of a free zone.
- Branches of foreign companies: If a foreign company establishes a branch in the UAE mainland, it will be subject to corporate tax on its UAE-sourced profits.
Yes, UAE Corporate Tax applies uniformly to all entities, regardless of ownership. Juridical persons incorporated or resident in the UAE, and foreign entities with a Permanent Establishment or taxable nexus in the UAE, are subject to Corporate Tax, irrespective of the nationality or residence of their owners.
Certain UAE entities, such as government bodies and specific investment funds, can be exempt from UAE Corporate Tax. However, most business and commercial activities fall under its purview and corporate tax will apply.
The UAE Corporate Tax regime becomes effective for financial years starting on or after June 1, 2023.
Examples:
- If your business’s financial year begins on July 1, 2023, and ends on June 30, 2024, you will be subject to UAE Corporate Tax from July 1, 2023. This marks the start of the first financial year following June 1, 2023.
- For a business with a financial year starting on January 1, 2023, and ending on December 31, 2023, UAE Corporate Tax will apply from January 1, 2024. This aligns with the commencement of the first financial year following June 1, 2023.
Contact us for a free corporate tax consultation at [email protected] and avoid hefty fines for non- compliance.
Creation Business Consultants provides full support for corporate tax compliance and planning. Our services include assistance with corporate tax registration, filing, and structuring to help global companies minimize tax liabilities. We also offer expert consultation on tax planning, bookkeeping, financial statement preparation, and both VAT and corporate tax filing. Our goal is to ensure your business remains compliant and financially optimized in a rapidly evolving tax environment.
Yes, UAE Corporate Tax is a federal tax applicable across all Emirates, ensuring uniformity in tax regulations throughout the entire country.
Yes, natural persons engaged in business activities in the UAE, either directly or through partnerships or sole proprietorships, are subject to Corporate Tax.
The legal entity or natural person carrying out the business activity can register for corporate tax. Typically, each legal entity (company) is considered one Taxable Person.
The specific documents required may vary but generally include:
- Trade license
- Memorandum of Association (MOA)
- Financial statements
- Passport copies of owners/directors/Ultimate Beneficial Owners (UBO)
While the Federal Tax Authority (FTA) website and e-Services Portal are available in both English and Arabic, the registration process itself may require documents to be submitted in Arabic. Creation Business Consultants can ensure your documents are prepared correctly for a smooth registration experience. Contact us today for assistance at [email protected]
WHAT DATES AND ON WHEN SHOULD A COMPANY THAT HAS BEEN INCORPORATED REGISTER TO CORPORATE TAX IN UAE?
Companies are required to register for corporate tax within the timeframe specified by the Federal Tax Authority (FTA). This usually occurs within a month of beginning business activities.
Are you confused about the registration deadlines? Contact Creation Business Consultants at [email protected] for expert advice.
The Federal Tax Authority (FTA) aims to process registrations within twenty (20) business days upon submission of all required documents.
The tax return filing period depends on your company’s financial year. Generally, returns are due within the timeframe specified by the Federal Tax Authority (FTA), within a few months after the end of your financial year. Ensure you meet your filing deadlines for assistance reach out to [email protected] can help your business stay on top of its UAE corporate tax obligations.
The UAE follows the arm’s length principle for determining deductible expenses. This means expenses must be ordinary, necessary, wholly and exclusively incurred for the purpose of the business and incurred at arm’s length (fair market value) if dealing with related parties.
While there are no specific guidelines yet, common deductible expenses might include:
- Cost of goods sold
- Rent
- Salaries and wages
- Utilities
- Marketing and advertising expenses (up to a certain limit)
- Interest on business loans (with limitations)
Unsure about what expenses are deductible under UAE corporate tax? We can provide tailored advice based on your specific business activities. Reach out to [email protected] for more information and support.
Businesses are required to maintain sufficient records for at least five years from the end of the tax period to which the records relate. These records should support your tax calculations and disclosures in the return. This may include:
- Purchase and sales invoices
- Bank statements
- Accounting records
- Contracts
Keeping up with record-keeping requirements. For assistance with accounting, bookkeeping, tax and compliance advisory and services email [email protected] for your free initial consultation today!
No, Corporate Tax and VAT are distinct taxes, and both will be applicable in the UAE.
If your business is registered for VAT, you must pay both VAT and Corporate Tax separately. Non-VAT registered businesses may still be liable for Corporate Tax.
No, Corporate Tax and Excise Tax are separate taxes, both of which will continue to apply in the UAE.
Yes, applicable service fees will still be payable to the Federal or relevant Emirate Government. Business setup, license renewal, and other government fees incurred in the normal course of business are generally deductible for Corporate Tax purposes.
Yes, international agreements, including those for avoiding double taxation, must be considered under the UAE Corporate Tax regime. In cases of conflict between the Corporate Tax Law and an international agreement, the latter may limit the application of Corporate Tax.
“Business” and “Business Activity” refer to any economic activity, either ongoing or short-term, conducted by any person, typically with a profit motive and some system or organization. These terms are used in the Corporate Tax Law to determine when a person’s activities incur a UAE Corporate Tax liability. For businesses, all activities and assets are generally considered part of a “Business” for tax purposes. For natural persons, see the relevant FAQ about what constitutes a ‘Business or Business Activity’ for tax purposes. For personalized advice and more detailed information on UAE corporate tax, contact our tax experts at [email protected].
A Resident Person includes UAE-incorporated entities like Limited Liability Companies, Private and Public Joint Stock Companies, and other juridical persons. Natural persons conducting business in the UAE are also considered Resident Persons. Foreign entities may be treated as Resident Persons if they are effectively managed and controlled in the UAE, which can be indicated by where strategic decisions are made.
A Non-Resident Person is any juridical entity incorporated outside the UAE and managed outside the UAE. Natural persons who do not engage in taxable business activities in the UAE are also considered Non-Residents.
Resident juridical persons are taxed on their worldwide income, with certain exemptions for income earned through foreign subsidiaries and branches. Income from abroad that isn’t exempt is eligible for foreign tax credits to avoid double taxation.
Non-Residents are taxed only on income linked to their Permanent Establishment in the UAE, income with a UAE nexus as per Cabinet Decision No. 56 of 2023, and UAE-sourced income subject to a 0% Withholding Tax.
A Tax Period is the business’s Financial Year used for preparing financial statements, typically the Gregorian calendar year (1 January to 31 December). Businesses using a different 12-month period for financial statements will follow that period for their Tax Period.
The 0% rate applies to each Taxable Person’s total income up to AED 375,000, regardless of how many businesses they operate. Qualifying Free Zone Persons face a 9% rate on non-Qualifying Income. Multiple entities forming a Tax Group are considered one Taxable Person and share a single AED 375,000 threshold. Artificially splitting businesses to exploit the threshold can lead to penalties and income adjustments.
Taxable Income is calculated as the accounting net profit (or loss) reported under IFRS, adjusted for specific items like unrealized gains/losses, exempt income, intra-group transfers, restructuring gains/losses, non-deductible expenses, related party transactions, tax loss transfers, and other Minister-specified adjustments.
For personalized advice and more detailed information on UAE corporate tax, contact our tax experts at [email protected].
In the Corporate Tax Law, an individual is referred to as a “natural person.”
A natural person will be subject to UAE Corporate Tax when engaging in any Business or Business Activity with an annual turnover exceeding AED 1 million. However, income from employment, personal investments, and real estate investments is not considered a Business or Business Activity for tax purposes.
No, the Corporate Tax Law applies to natural persons with an annual turnover exceeding AED 1 million, irrespective of their citizenship or visa status.
A natural person’s taxable income includes all income derived from their Business or Business Activity in the UAE, including income earned from abroad related to that business or activity.
If a natural person conducts multiple Businesses or Business Activities, the combined turnover of all such activities will be considered when determining if the annual turnover exceeds the AED 1 million threshold.
No, employment income, including salaries, wages, allowances, and bonuses derived from an employment contract, is not subject to UAE Corporate Tax.
No, interest and other personal investment and savings income earned by a natural person in their personal capacity will not be subject to UAE Corporate Tax.
Personal Investment income includes income from investment activities conducted in a natural person’s personal capacity, such as interest or dividends. It does not include income from commercial businesses or activities requiring a license from a UAE Licensing Authority.
Real Estate Investment income refers to income earned from investment activities related to land or real estate property in the UAE, not requiring a license from a UAE Licensing Authority.
For personalized advice and more detailed information on UAE corporate tax, contact our tax experts at [email protected].
A “juridical person” is an entity established or recognized under UAE laws and regulations, or under foreign jurisdiction laws, possessing a legal personality distinct from its founders, owners, and directors. Examples include limited liability companies, foundations, ‘onshore’ trusts, public or private joint stock companies, and other entities with separate legal personalities under UAE mainland legislation or Free Zone regulations. UAE branches of domestic or foreign juridical persons are considered extensions of their parent or head office and do not have separate juridical status.
Having a separate legal personality means the entity holds its own rights, obligations, and liabilities. This generally limits the liability of the owners regarding the entity’s debts and obligations.
All activities conducted by a juridical person are considered “Business Activities” and fall within the scope of UAE Corporate Tax unless specifically exempted. For personalized advice and more detailed information on UAE corporate tax, contact our tax experts at [email protected].
Small Business Relief allows eligible businesses to be exempt from calculating and paying Corporate Tax and from adhering to regular Corporate Tax reporting requirements. If a business’s revenue is AED 3 million or below for the relevant tax period, it can elect to be treated as having no taxable income for that period, thus avoiding the need to file a full Corporate Tax return.
For tax periods ending on or before December 31, 2026, the following UAE Resident Persons with revenues of AED 3 million or less in the current and previous tax periods can claim Small Business Relief:
- Natural persons.
- Legal entities that are not:
- Constituent Companies of a Multinational Enterprise Group with total consolidated group revenue exceeding AED 3.15 billion.
- Qualifying Free Zone Persons.
If a business’s revenue exceeds AED 3 million in any tax period, it will no longer be eligible for Small Business Relief for that and future periods.
Yes, businesses with revenues of AED 3 million or less for the relevant and previous tax periods can apply for ‘Small Business Relief’ for tax periods ending on or before December 31, 2026.
If a business qualifies for Small Business Relief and its revenue is AED 3 million or below, it will be considered as having no taxable income, and no Corporate Tax will be payable.
For a business not eligible for Small Business Relief, the Corporate Tax liability on AED 1 million taxable income would be calculated as follows:
- Taxable Income up to AED 375,000: AED 375,000 x 0% = AED 0
- Taxable Income exceeding AED 375,000: (AED 1,000,000 – AED 375,000) = AED 625,000 x 9% = AED 56,250
Thus, the total Corporate Tax liability for the period would be AED 0 + AED 56,250 = AED 56,250.
For personalized advice and more detailed information on UAE corporate tax, contact our tax experts at [email protected].
Revenue refers to the total income derived during a tax period from various sources such as sales of goods and services, royalties, interest, premiums, and dividends, before deducting any costs or expenditures. For income from sales or services, it means the gross amount without subtracting the cost of goods sold or services.
