UAE Corporate Tax — Registration, Filing & Compliance Guide for Businesses
UAE Corporate Tax (CT) under Federal Decree-Law No. 47 of 2022 applies to all juridical and natural persons conducting business in the UAE, with a standard rate of 9% on taxable income exceeding AED 375,000. Understanding your registration obligations, filing deadlines, and available reliefs is essential to avoid penalties that range from AED 500 to AED 20,000 per violation. Abdelhamid & Co. Certified Public Accountants & Auditors LLC SP — UAE Ministry of Economy Licence LC0106-01, FTA Tax Agent TAN: 30003958 — provides end-to-end Corporate Tax compliance services for businesses across Sharjah, Dubai, and Abu Dhabi.
Key Facts — UAE Corporate Tax at a Glance
- Law: Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
- Standard rate: 9% on taxable income above AED 375,000
- 0% rate: Taxable income up to AED 375,000 (SME relief applies)
- Free Zone rate: 0% on qualifying income for Qualifying Free Zone Persons (QFZP)
- Effective for: Financial years beginning on or after 1 June 2023
- Administrator: Federal Tax Authority (FTA) via EmaraTax
Who Must Register for UAE Corporate Tax?
Registration is mandatory for all taxable persons — including UAE-incorporated companies, foreign companies with a permanent establishment in the UAE, and natural persons earning business income above AED 1,000,000 annually from UAE sources. Even entities with nil taxable income must register and file a return. Failure to register results in administrative penalties under Cabinet Decision No. 75 of 2023.
Entities that are exempt from Corporate Tax — such as UAE Government entities, qualifying public benefit organisations, and qualifying investment funds — must still apply for exemption through EmaraTax and may have ongoing notification obligations.
Corporate Tax Rates and the Small Business Relief
The UAE Corporate Tax Law establishes two headline rates:
- 0% on taxable income up to AED 375,000
- 9% on taxable income exceeding AED 375,000
Under Ministerial Decision No. 73 of 2023, businesses with revenue not exceeding AED 3,000,000 in a tax period may elect for Small Business Relief, treating taxable income as nil for that period. This election is available for tax periods ending on or before 31 December 2026. Businesses that elect Small Business Relief are still required to register and maintain adequate records.
A separate top-up tax (Qualified Domestic Minimum Top-up Tax) applies to large multinationals (revenue ≥ EUR 750M) in line with the OECD Pillar Two Global Minimum Tax, bringing the effective rate to 15% for in-scope groups.
Qualifying Free Zone Persons (QFZP)
A legal entity incorporated in or registered with a UAE Free Zone may qualify for a 0% rate on qualifying income under Article 18 of the Corporate Tax Law, provided it meets all conditions: maintaining adequate substance in the Free Zone, earning qualifying income as defined by the regulations, not making elections that would exclude it from QFZP status, and complying with transfer pricing rules. Non-qualifying income remains subject to the standard 9% rate. Ministerial Decision No. 265 of 2023 provides the detailed conditions and the list of qualifying activities and income types.
Taxable Income — Starting Point and Adjustments
Corporate Tax taxable income starts from accounting profit (net income) as shown in financial statements prepared under IFRS or another acceptable accounting standard, then adjusted for specific items under the law:
- Exempt income: UAE-source dividends from resident persons, capital gains from qualifying shareholdings (participation exemption), certain foreign-source income
- Non-deductible expenses: entertainment (50% limit), bribes, fines and penalties, personal expenditure, interest subject to the general interest limitation rule (30% of EBITDA)
- Transitional rules: elections for pre-CT assets and liabilities to be measured at fair value or historical cost
- Tax losses: carry-forward unlimited, subject to 75% offset cap per period; no carry-back
Transfer Pricing Obligations
All related-party transactions and transactions with connected persons must be conducted at arm's length under Article 34 of the law. Businesses with revenue exceeding AED 200,000,000 (or transactions meeting the threshold in Ministerial Decision No. 97 of 2023) must maintain a Transfer Pricing Disclosure Form and, if applicable, a Master File and Local File. Country-by-Country Reporting (CbCR) obligations apply to UAE-headquartered MNE groups with consolidated revenue ≥ AED 3,150,000,000.
Corporate Tax Return Filing — Deadlines and Process
The Corporate Tax return must be filed — and any tax payable settled — within nine months of the end of the relevant tax period. For companies with a 31 December financial year end, the first return for the period ending 31 December 2023 was due by 30 September 2024. Returns are submitted electronically through EmaraTax. Late filing attracts a penalty of AED 500 per month for the first twelve months, rising to AED 1,000 per month thereafter.
Corporate Tax Grouping — Tax Groups
Under Article 40 of the Corporate Tax Law, a UAE-resident parent company owning at least 95% of the shares and voting rights (directly or indirectly) in UAE-resident subsidiaries may form a Tax Group, filing a single consolidated return. Tax Group formation requires FTA approval and must be maintained for a minimum period. Intercompany transactions within a Tax Group are disregarded for Corporate Tax purposes, simplifying compliance for UAE holding structures.
How Abdelhamid & Co. Assists with Corporate Tax Compliance
Our Corporate Tax team provides comprehensive assistance to UAE businesses, including:
- Corporate Tax registration on EmaraTax and obtaining the Tax Registration Number (TRN)
- Assessment of Free Zone entity status and Qualifying Free Zone Person eligibility
- Small Business Relief eligibility review and election filing
- Taxable income computation, including IFRS adjustments and non-deductible items
- Transfer pricing documentation — Local File, Master File, Disclosure Form
- Corporate Tax return preparation and electronic filing via EmaraTax
- Tax Group formation applications and consolidated return filing
- Representation before the FTA in audits, objections, and reconsiderations
Frequently Asked Questions
When did UAE Corporate Tax become effective?
UAE Corporate Tax became effective for financial years beginning on or after 1 June 2023. For companies with a 31 December financial year end, the first Corporate Tax period was 1 January 2023 to 31 December 2023, with the return due by 30 September 2024.
Does a Free Zone company pay Corporate Tax in the UAE?
A Free Zone company that qualifies as a Qualifying Free Zone Person (QFZP) benefits from a 0% rate on qualifying income. However, non-qualifying income — such as income from mainland UAE clients or income from excluded activities — is taxed at 9%. Companies must meet substance, income, and compliance conditions to maintain QFZP status.
What is the Small Business Relief and who can claim it?
Small Business Relief allows businesses with revenue not exceeding AED 3,000,000 in a tax period to treat their taxable income as nil for that period, effectively paying 0% Corporate Tax. The election is available for periods ending on or before 31 December 2026 and must be made when filing the Corporate Tax return. Registration and record-keeping obligations still apply.
Is UAE Corporate Tax registration mandatory even if I have no taxable income?
Yes. All taxable persons — including those with zero taxable income, loss-making businesses, and Free Zone entities — are required to register for Corporate Tax with the FTA and file an annual return. Failure to register triggers administrative penalties starting at AED 10,000 per violation.
What are the Corporate Tax penalties for late filing in the UAE?
Under Cabinet Decision No. 75 of 2023, late filing of a Corporate Tax return attracts AED 500 per month for the first twelve months, then AED 1,000 per month thereafter. Late payment of tax due attracts a 2% monthly charge on the unpaid amount. Errors in the return may attract additional penalties depending on whether they result in understated tax.
Does the UAE Corporate Tax apply to individuals?
UAE Corporate Tax applies to natural persons (individuals) only if they are conducting a business or business activity in the UAE and their annual business turnover exceeds AED 1,000,000. Employment income, investment income (dividends, capital gains from personal investments), and real estate income earned in a personal capacity are excluded from Corporate Tax.
How does the participation exemption work under UAE Corporate Tax?
The participation exemption under Article 23 of the Corporate Tax Law exempts dividends and capital gains from a qualifying shareholding from Corporate Tax. A qualifying shareholding requires at least 5% ownership, held for at least 12 months, with the subsidiary subject to a tax rate of at least 9% (or meeting an alternative test). The exemption prevents double-taxation on intra-group equity returns.
Last reviewed: May 2026