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UAE Corporate Tax

Since the introduction of Corporate Tax (CT) under Federal Decree Law No. 47 of 2022, businesses in the UAE must register, calculate taxable income accurately, and file on time. Corporate Tax is a direct tax on business profits, designed to align the UAE with international tax standards while keeping it competitive. This page outlines how the regime works, who it applies to, and the main compliance obligations.

Scope and Application

Corporate Tax applies to a business’s net accounting profit, adjusted for specific tax provisions, on a territorial basis. It covers:

Resident entities — juridical persons incorporated in the UAE (including Free Zone entities) and individuals carrying out licensed business activities.
Non resident entities — foreign persons with a Permanent Establishment (PE) in the UAE or earning UAE sourced income.

Why It Was Introduced

To support the UAE’s commitment to global tax transparency and the OECD’s Base Erosion and Profit Shifting (BEPS) initiatives.
To diversify government revenue.
To maintain the UAE as a predictable, internationally integrated jurisdiction for business and investment.

Rates and Thresholds

0%
on taxable income up to AED 375,000.

9%
on taxable income above AED 375,000.

Qualifying Free Zone Persons
may apply a 0% rate on Qualifying Income, subject to maintaining adequate substance and meeting the relevant regulatory conditions.

Exemptions and Exclusions

Certain entities and income streams are exempt or excluded, including:

Government and public benefit entities.
Qualifying intra group transactions and reorganisations.
Dividends and capital gains from qualifying shareholdings.
An individual’s employment income, personal investment income, and personal real estate investments.
Businesses engaged in the extraction of natural resources (subject to Emirate level taxation).

Compliance Lifecycle

Registration
All Taxable Persons must register with the Federal Tax Authority (FTA) and obtain a Tax Registration Number (TRN), regardless of revenue or tax liability.

Calculating Taxable Income
• Prepare financial statements in line with accepted accounting standards.
• Apply tax adjustments for disallowed expenses, non taxable income, and specific deductions.
• Maintain supporting documentation, including transfer pricing studies and related party records.

Filing and Payment
• The CT return and any tax payable must be submitted through the EmaraTax portal within nine months of the end of the tax period.
• The filing includes the completed return, financial statements, and any disclosures required by the FTA.

Record Keeping
Retain all financial and tax records for at least seven years after the end of the tax period to support any future FTA review or audit.

Sector Specific Considerations

Free Zone entities — assess activities against the “Qualifying Income” criteria; conducting business with the mainland or failing to meet the requirements may apply the standard 9% rate to all income.
Multinational enterprises — large groups meeting defined revenue thresholds may fall under the Pillar Two GloBE Rules, which can add a supplementary tax liability.
Family businesses and holding structures — ownership transfers, dividends, and intra group financing each carry tax implications, and structuring decisions affect available exemptions.

Wider Implications

Beyond compliance, Corporate Tax affects business structuring, cash flow management (provisioning for liabilities), transfer pricing policies, and investment and distribution decisions on after tax returns and profit repatriation.

UAE corporate tax is charged at 0% on taxable income up to AED 375,000 and 9% on taxable income above that threshold, under Federal Decree Law No. 47 of 2022. A separate 15% domestic minimum top up tax applies to very large multinational groups meeting the global revenue threshold.

Yes. Once registered, a taxable person must file a return for every tax period even where taxable income is nil, the company is dormant or it is within the 0% band. There is no exemption from filing, and a nil return still has to be submitted by the deadline.

The return and any payment are due within nine months of the end of the tax period. A company with a financial year ending 31 December 2025 therefore files by 30 September 2026. Filing is done through the FTA portal, and no extension of the deadline is normally granted.

Free zone companies are within scope and must register. A Qualifying Free Zone Person can apply 0% to its qualifying income, but only if it meets conditions on adequate substance, qualifying activities, the de minimis rule on non qualifying revenue, transfer pricing compliance and audited financial statements. Failure of any condition can remove the benefit.

Small Business Relief lets a resident person with revenue at or below AED 3 million in the relevant and all prior tax periods elect to be treated as having no taxable income. The relief is elective, must be claimed in the return, and applies for a limited window of tax periods, so confirm current availability before relying on it.

Yes, where a resident parent holds at least 95% of the share capital, voting rights and profit entitlement of each subsidiary, all members share the same financial year and accounting standards, and no member is an exempt person or a Qualifying Free Zone Person. A tax group files one consolidated return and can offset losses between members.

Common exemptions include qualifying dividends from resident and certain foreign shareholdings, gains under the participation exemption, income of qualifying foreign permanent establishments where elected, and income of specified exempt persons such as government entities and qualifying public benefit entities. Each exemption has detailed conditions.

Audited statements are required for taxable persons whose revenue exceeds the threshold set by ministerial decision, and for any free zone entity claiming Qualifying Free Zone Person status. Even below the threshold, proper IFRS based accounts are needed to compute taxable income and support the return.

The Federal Tax Authority (FTA) administers registration, filing, and enforcement of Corporate Tax under Federal Decree Law No. 47 of 2022.

Taxable persons must keep financial and tax records for at least seven years after the end of the relevant tax period.

No. Non residents are taxed only on income sourced in the UAE or attributable to a UAE permanent establishment, on a territorial basis.

Yes, a previously filed return can be corrected under the FTA's voluntary disclosure procedures, with the specific process and time limits set by the FTA.

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