Summary
UAE Corporate Tax generally applies at 0% on taxable income up to AED 375,000 and 9% on the portion exceeding AED 375,000. Qualifying Free Zone Persons can receive 0% on Qualifying Income if they meet strict conditions, while Small Business Relief is available to eligible resident businesses with revenue of AED 3 million or less and has been extended to qualifying tax periods ending on or before 31 December 2029. Large multinational groups can also fall under the UAE Domestic Minimum Top-up Tax, which has applied to financial years starting on or after 1 January 2025.
UAE Corporate Tax has changed how mainland companies, free zone entities, foreign businesses, freelancers and other taxable persons approach accounting and tax compliance.
The headline 9% rate is relatively simple. The difficult part is determining what your taxable income actually is, whether income is exempt, which expenses are deductible, whether Small Business Relief applies, whether a free zone business genuinely qualifies for the 0% regime, and when the company must register, file and pay.
This guide explains the UAE Corporate Tax system in practical terms, including the current tax rates, Small Business Relief, Qualifying Free Zone Person rules, natural-person taxation, exempt income, deductions, tax losses, transfer pricing, tax groups, filing deadlines, audited financial statement requirements and the Domestic Minimum Top-up Tax.
For broader business structuring, see our business setup services in Dubai.
What Is UAE Corporate Tax?
Corporate Tax is a direct tax imposed on the taxable income of corporations and certain other businesses.
The UAE Corporate Tax framework is primarily governed by Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, together with subsequent amendments, Cabinet Decisions, Ministerial Decisions and guidance issued by the Federal Tax Authority.
The regime applies to tax periods beginning on or after 1 June 2023.
This does not mean every company started paying tax on 1 June 2023.
The starting date depends on the company’s financial year.
For example:
- A company with a financial year from 1 January to 31 December first became subject to Corporate Tax from 1 January 2024.
- A company with a financial year starting 1 July 2023 became subject to Corporate Tax from 1 July 2023.
The Federal Tax Authority administers Corporate Tax, while the UAE Ministry of Finance develops tax policy and issues implementing decisions.
UAE Corporate Tax Rates at a Glance
For a standard taxable person, the basic Corporate Tax rates are:
| Taxable Income | Corporate Tax Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Portion exceeding AED 375,000 | 9% |
| QFZP Qualifying Income | 0% subject to conditions |
| QFZP non-Qualifying Taxable Income | Generally 9% |
| In-scope multinational groups under DMTT | Minimum effective taxation under the UAE DMTT framework |
The AED 375,000 threshold relates to taxable income, not revenue.
That distinction matters.
A business with AED 2 million in annual sales does not automatically pay 9% on AED 2 million. Corporate Tax is calculated after determining accounting profit and making the tax adjustments required under the Corporate Tax Law.
UAE Corporate Tax Calculation Example
Suppose a mainland company has taxable income of AED 1,000,000.
The calculation is:
First AED 375,000
AED 375,000 × 0% = AED 0
Remaining AED 625,000
AED 625,000 × 9% = AED 56,250
Corporate Tax payable: AED 56,250
Another example:
| Taxable Income | Estimated Corporate Tax |
|---|---|
| AED 300,000 | AED 0 |
| AED 375,000 | AED 0 |
| AED 500,000 | AED 11,250 |
| AED 1,000,000 | AED 56,250 |
| AED 2,000,000 | AED 146,250 |
These examples assume the standard rates and do not account for exemptions, tax credits, Small Business Relief, free zone treatment or other adjustments.
Who Is Subject to UAE Corporate Tax?
Corporate Tax can apply to several categories of persons.
UAE Companies and Other Juridical Persons
Companies incorporated or otherwise established in the UAE are generally considered UAE resident juridical persons for Corporate Tax purposes.
This includes many:
- LLCs
- Free zone companies
- Public and private joint stock companies
- Certain partnerships with separate legal personality
- Other UAE-incorporated legal entities
A UAE branch of a UAE company is generally treated as part of the same legal person rather than registering separately for Corporate Tax.
Foreign Companies
A foreign juridical person can become subject to UAE Corporate Tax where it has a taxable presence in the UAE, such as a UAE Permanent Establishment or another form of taxable nexus under the legislation. State-sourced income and withholding-tax rules can also be relevant depending on the circumstances.
Free Zone Companies
Free zone companies are within the UAE Corporate Tax system. Holding a free zone licence does not automatically make a company exempt from Corporate Tax. A free zone company may qualify for the special 0% regime only if it satisfies the requirements to be treated as a Qualifying Free Zone Person.
Natural Persons
Individuals are not taxed simply because they receive a salary or own personal investments.
A natural person becomes subject to Corporate Tax where:
- the individual carries on a Business or Business Activity in the UAE; and
- total turnover from those businesses exceeds AED 1 million during a Gregorian calendar year.
Income from the following is generally excluded from this business-turnover test:
- wages and salaries
- personal investment income
- real-estate investment income meeting the relevant conditions
This distinction is particularly important for freelancers, consultants and sole proprietors.
Who Is Exempt From UAE Corporate Tax?
Certain persons can be exempt automatically or subject to the applicable conditions and approval requirements.
Categories can include:
- UAE Government Entities
- Certain Government Controlled Entities
- Qualifying Public Benefit Entities
- Extractive Businesses meeting the required conditions
- Non-Extractive Natural Resource Businesses meeting the required conditions
- Qualifying Investment Funds
- Certain pension and social-security funds
- Certain wholly owned subsidiaries of qualifying Exempt Persons
An entity should not assume it is exempt merely because it operates in a particular industry. Some exemptions apply automatically, while others depend on notification, Cabinet listing or approval by the FTA.
How Is Taxable Income Calculated?
The UAE does not simply apply 9% to turnover. Corporate Tax generally begins with the business’s accounting net profit or loss shown in its financial statements. Tax adjustments are then made under the Corporate Tax Law.
In simplified form:
Accounting profit or loss
+/- Corporate Tax adjustments
– Exempt income
– Available reliefs
– Permitted tax losses
= Taxable income
This is why proper accounting is central to Corporate Tax compliance. A business cannot reliably calculate its tax liability from bank statements or sales totals alone. Our accounting services in Dubai can help businesses maintain the financial records needed for Corporate Tax reporting.
Which Business Expenses Are Deductible?
Business expenditure is generally deductible where it is incurred wholly and exclusively for the purposes of the business, subject to specific limitations in the Corporate Tax Law.
Common potentially deductible expenses can include:
- employee salaries and employment costs
- commercial rent
- utilities
- professional fees
- business software
- advertising and marketing
- qualifying travel costs
- depreciation or amortisation recognised under the applicable accounting treatment
- certain financing expenses
- other genuine operating expenses
However, not every accounting expense is fully deductible for tax purposes.
Entertainment Expenses
Certain entertainment expenditure incurred for customers, shareholders, suppliers or other business partners is generally subject to a 50% deduction limit.
This can include qualifying expenditure relating to:
- meals
- accommodation
- transportation
- admission
- entertainment facilities
Personal expenses are not transformed into deductible business expenses simply because they are paid by the company.
Interest Expense
Net interest deductions can also be restricted.
Under the general interest-deduction limitation, businesses within the rules can generally deduct net interest expenditure up to the greater of:
- 30% of adjusted EBITDA, or
- the applicable AED 12 million de minimis threshold.
Certain businesses and circumstances are treated differently, and specific restrictions can also apply to Related Party financing.
Non-Deductible Expenditure
Examples of amounts that may be non-deductible or restricted include:
- personal expenses
- certain fines and penalties
- dividends and profit distributions
- expenses relating to exempt income where the legislation restricts deduction
- certain Related Party financing expenses
- other expenditure specifically disallowed by the Corporate Tax Law
Businesses should therefore distinguish between an accounting expense and a Corporate Tax deduction.
What Income Can Be Exempt From Corporate Tax?
Not all accounting income necessarily becomes taxable income.
UAE Dividends
Dividends and other profit distributions received from UAE resident juridical persons can generally be exempt from Corporate Tax.
Participation Exemption
Certain income from qualifying shareholdings can qualify for the Participation Exemption.
Depending on the conditions, this can include:
- dividends
- capital gains from disposal
- certain foreign-exchange gains or losses
- certain impairment-related amounts
The Participation Exemption has detailed ownership, holding-period, tax-subject and other requirements.
It should not be assumed that every investment gain is tax-free.
Foreign Permanent Establishment
A UAE resident business can, subject to the applicable conditions, elect to exempt income and associated expenditure of qualifying foreign Permanent Establishments. Alternatively, foreign-tax-credit mechanisms may be relevant where the income remains taxable in the UAE.
Small Business Relief in the UAE
Small Business Relief is one of the most important reliefs for smaller UAE businesses. Following the 2026 extension, the AED 3 million revenue threshold can apply to qualifying tax periods ending on or before 31 December 2029.
An eligible Resident Person can elect for Small Business Relief where its revenue is AED 3 million or less in:
- the relevant Tax Period, and
- all previous relevant Tax Periods within the applicable regime.
If the business exceeded the AED 3 million threshold in a previous relevant Tax Period, it generally cannot simply drop below the threshold later and regain eligibility under the normal rule.
What Does Small Business Relief Do?
Where the election is valid, the business is treated as having no Taxable Income for that Tax Period. This can significantly simplify compliance. However, it does not mean the business can ignore Corporate Tax completely.
The person generally still needs to:
- register where required
- file the relevant return
- maintain appropriate records
- make the Small Business Relief election
Who Cannot Claim Small Business Relief?
Small Business Relief is not available to:
- a Qualifying Free Zone Person
- certain members of large multinational groups meeting the applicable consolidated-revenue threshold
Businesses should also avoid artificially dividing operations between several entities to keep each company’s revenue below AED 3 million.
For more detailed filing guidance, see our UAE Corporate Tax registration and filing guide.
UAE Corporate Tax for Free Zone Companies
Free zone Corporate Tax is one of the most misunderstood areas of the UAE tax system.
The correct rule is:
A free zone company is not automatically tax-free.
A Free Zone Person that satisfies all requirements to become a Qualifying Free Zone Person (QFZP) can benefit from:
- 0% Corporate Tax on Qualifying Income
- 9% Corporate Tax on taxable income that is not Qualifying Income under the applicable free zone regime
The normal AED 375,000 0% band should not simply be applied to non-Qualifying Income of a QFZP as though the company were an ordinary mainland taxable person.
Requirements to Be a Qualifying Free Zone Person
A Free Zone Person generally needs to satisfy several ongoing conditions.
These include:
Maintaining Adequate Substance
The company should carry out the required core income-generating activities in the UAE and maintain appropriate substance considering the nature and scale of its operations.
Relevant factors can include:
- qualified employees
- operating expenditure
- physical assets
- actual business activity
A flexi-desk alone does not automatically prove that every QFZP substance condition has been satisfied.
Deriving Qualifying Income
The business must derive income that falls within the Qualifying Income rules.
The treatment can depend on:
- who the customer is
- whether the customer is another Free Zone Person
- what activity generated the income
- whether an activity is a Qualifying Activity
- whether the income arises from an Excluded Activity
- Permanent Establishment rules
- property rules
- intellectual-property rules
For a deeper explanation, see our guide to Qualifying Income under UAE Corporate Tax.
No Election Into the Standard Regime
A Free Zone Person seeking QFZP treatment must not have made an election that places it under the ordinary Corporate Tax rates where that election prevents QFZP status.
Transfer Pricing Compliance
A QFZP must comply with the arm’s-length principle and applicable transfer-pricing documentation requirements.
Audited Financial Statements
Qualifying Free Zone Persons must prepare and maintain audited financial statements under the applicable rules.
De Minimis Requirement
A QFZP can earn a limited amount of non-qualifying revenue without automatically failing the regime. The de minimis test is generally satisfied where non-qualifying revenue does not exceed the lower of:
- AED 5 million, or
- 5% of total revenue
The detailed calculation contains exclusions and adjustments, so the simple percentage should not be used without considering the actual rules.
What Happens if a Free Zone Company Fails QFZP Conditions?
Failure to meet QFZP conditions can have serious consequences.
Depending on the relevant failure and rules, a Free Zone Person can lose QFZP status for the applicable Tax Period and can remain disqualified for subsequent Tax Periods. This is why QFZP status should be reviewed every year rather than assumed to continue indefinitely. Businesses comparing structures should also read our guide to Corporate Tax for mainland and free zone companies.
Qualifying and Excluded Free Zone Activities
The UAE periodically updates the decisions defining Qualifying Activities and Excluded Activities for the free zone regime. Examples of activities that can fall within the Qualifying Activities framework, subject to all conditions, include areas such as:
- manufacturing
- processing
- holding shares and other securities
- qualifying intellectual-property activities
- certain headquarters services to Related Parties
- certain treasury and financing services to Related Parties
- logistics
- certain distribution activities from a Designated Zone
- other activities specifically recognised by the current decisions
Excluded Activities can include specified forms of:
- transactions with natural persons
- banking
- insurance
- finance and leasing
- immovable-property activities
- non-qualifying intellectual-property income
- The classification is detailed and has been updated over time.
Free zone companies should therefore use the latest Ministry of Finance and FTA guidance rather than relying on an old activity list.
Corporate Tax for Freelancers and Sole Proprietors
A natural person can become subject to UAE Corporate Tax where turnover from UAE Business or Business Activities exceeds AED 1 million in a calendar year.
The AED 1 million threshold relates to turnover, not profit.
For example:
A consultant generates AED 1.4 million from consultancy activities during 2026. The individual may enter the Corporate Tax regime because business turnover exceeds AED 1 million.
The person’s taxable income is then determined under the Corporate Tax rules. Salary received from employment is not added to business turnover simply to push the person over the AED 1 million threshold.
Likewise, qualifying personal investment income and real-estate investment income are generally excluded from the business-turnover test.
Corporate Tax Registration for Natural Persons
Where a natural person’s UAE business turnover exceeds AED 1 million during a calendar year, the registration deadline generally falls on 31 March of the following calendar year.
For example:
| Calendar Year Threshold Is Exceeded | General Registration Deadline |
|---|---|
| 2025 | 31 March 2026 |
| 2026 | 31 March 2027 |
| 2027 | 31 March 2028 |
This is more accurate than describing 31 March 2026 as a permanent registration deadline for every individual business owner.
Corporate Tax Registration for Companies
Taxable persons are required to register for Corporate Tax according to the timelines prescribed by the Federal Tax Authority. Registration is completed through the FTA’s digital tax system. VAT registration does not replace Corporate Tax registration.
A business already registered for VAT must still meet its Corporate Tax registration obligations separately. UAE branches of domestic companies are generally extensions of the UAE head office and therefore do not register and file as separate juridical persons.
The FTA currently imposes an AED 10,000 administrative penalty for late Corporate Tax registration, although qualifying taxpayers may be able to benefit from the FTA’s current late-registration penalty-waiver initiative when its conditions are satisfied.
Corporate Tax Filing Deadline
Corporate Tax returns and the associated Corporate Tax payment are generally due within nine months from the end of the Tax Period.
Examples:
| Financial Year End | General Filing and Payment Deadline |
|---|---|
| 31 December 2025 | 30 September 2026 |
| 31 March 2026 | 31 December 2026 |
| 30 June 2026 | 31 March 2027 |
| 31 December 2026 | 30 September 2027 |
A company with no tax payable should not automatically assume it can skip the return.
Taxable persons generally still need to file their required Corporate Tax Return even where:
- they made a tax loss
- taxable income falls below AED 375,000
- Small Business Relief is being elected
- no Corporate Tax is ultimately payable
Our detailed Corporate Tax return filing guide covers the filing process separately.
Audited Financial Statements for Corporate Tax
Not every UAE business is required to obtain audited financial statements solely because Corporate Tax exists.
Under the current rules applying to relevant Tax Periods, audited financial statements are required for categories including:
- a taxable person, other than a Tax Group, with revenue exceeding AED 50 million during the relevant Tax Period
- a Qualifying Free Zone Person
- a Tax Group, which must prepare audited special-purpose aggregated financial statements under the applicable rules
Smaller ordinary taxable persons below the threshold should therefore not be told that a statutory Corporate Tax audit is automatically mandatory in every case.
Separate audit requirements can still arise from:
- free zone regulations
- company law
- licensing authorities
- banks
- investors
- shareholder agreements
- other regulatory frameworks
Corporate Tax Record-Keeping Requirements
Corporate Tax records should generally be retained for at least seven years following the end of the relevant Tax Period.
Records can include:
- financial statements
- general ledger information
- invoices
- contracts
- expense records
- supporting tax calculations
- transfer-pricing documentation where applicable
- evidence supporting exemptions or reliefs
- records supporting Tax Return entries
The previous five-year wording used in many older Corporate Tax articles is not appropriate for current Corporate Tax record retention.
Tax Losses Under UAE Corporate Tax
Where deductions exceed taxable income, a business can generate a Tax Loss. Subject to the applicable conditions, Tax Losses can generally be carried forward to future Tax Periods. The amount of carried-forward losses used in a later period is generally limited to 75% of that period’s Taxable Income.
Example:
A business has:
- Taxable Income before losses: AED 1,000,000
- Available carried-forward Tax Losses: AED 900,000
The maximum losses generally usable in that period would be:
AED 1,000,000 × 75% = AED 750,000
This leaves AED 250,000 of taxable income before considering other applicable adjustments. Unused qualifying losses can continue to be carried forward subject to the Corporate Tax conditions. Tax Losses generally cannot be carried backward to reduce tax for earlier periods.
A business electing Small Business Relief does not generate a Tax Loss for the period in which it is treated as having no Taxable Income.
Transfer Pricing Rules
Transfer pricing is not only relevant to multinational corporations. The UAE arm’s-length principle applies to transactions and arrangements with Related Parties and Connected Persons, including qualifying domestic transactions.
Related-party arrangements can include:
- management fees
- intercompany loans
- shareholder loans
- service agreements
- intellectual-property charges
- group financing
- transfer of goods
- cost allocations
The pricing and terms should reflect what independent parties would reasonably agree in comparable circumstances. Depending on the company’s size and circumstances, specific transfer-pricing disclosure forms, Master Files or Local Files can also be required. QFZPs must comply with transfer-pricing requirements as one of the conditions for retaining the special free zone tax regime.
Tax Groups
Eligible UAE companies can apply to form a Corporate Tax Group and be treated as a single taxable person.
Key conditions generally include the parent holding at least 95% of:
- share capital
- voting rights
- entitlement to profits and net assets
in the relevant subsidiaries, together with the other statutory requirements.
Tax Group members generally must:
- be UAE resident juridical persons
- use the same financial year
- use the same accounting standards
- not be Exempt Persons under the relevant restrictions
- not be QFZPs
Tax grouping can simplify the treatment of transactions between qualifying group entities, but it creates its own accounting, filing and audit responsibilities.
Domestic Minimum Top-Up Tax in the UAE
The UAE Domestic Minimum Top-up Tax, or DMTT, should not be confused with the normal 9% Corporate Tax rate.
The UAE DMTT applies for financial years starting on or after 1 January 2025. It targets Constituent Entities of large multinational enterprise groups with annual consolidated global revenue of €750 million or more in at least two of the four financial years immediately preceding the year being tested. The DMTT forms part of the UAE’s implementation of the OECD Pillar Two framework.
Is DMTT an Extra 15% on Top of the 9% Corporate Tax?
No.
This is one of the biggest mistakes in Corporate Tax content. The DMTT is designed around achieving the applicable 15% minimum effective tax rate under the Pillar Two rules.
It should not be described as:
9% UAE Corporate Tax + another flat 15% tax = 24%.
The actual top-up calculation is substantially more technical and takes account of the GloBE framework and the effective tax rate of the relevant jurisdictional entities.
For a normal UAE SME, startup or ordinary local company, the DMTT is generally not the issue to focus on.
Corporate Tax vs VAT
Corporate Tax and VAT are separate UAE taxes.
Corporate Tax
Corporate Tax applies to taxable income or business profits.
VAT
VAT generally applies to taxable supplies of goods and services.
A business can therefore be:
- registered for both Corporate Tax and VAT
- registered for Corporate Tax but not VAT
- subject to different filing periods for each tax
Being compliant with VAT does not make the company compliant with Corporate Tax.
For VAT support, see our VAT consultancy services in Dubai.
Common UAE Corporate Tax Mistakes
Treating Revenue as Taxable Income
AED 1 million of revenue does not automatically mean AED 1 million is taxed.
Corporate Tax generally starts from accounting profit before tax adjustments.
Assuming Every Free Zone Company Pays 0%
Free zone status and QFZP status are not the same thing.
The business must satisfy the QFZP requirements continuously.
Applying the AED 375,000 Threshold to Small Business Relief
These are completely different concepts.
AED 375,000 relates to the standard Corporate Tax rate bands.
AED 3 million is the revenue threshold used for Small Business Relief eligibility.
Ignoring Registration Because the Company Made a Loss
Corporate Tax registration and filing can still be required even where no tax is payable.
Assuming DMTT Started in 2026
The UAE DMTT applies to financial years starting on or after 1 January 2025.
Calling DMTT an Additional 15% Tax
The regime is designed to bring in-scope multinational groups to the applicable 15% minimum effective tax level, not simply add a flat 15 percentage points to the standard tax.
Keeping Records for Only Five Years
Corporate Tax records generally need to be maintained for at least seven years following the end of the relevant Tax Period.
Assuming Every Company Needs an Audit
The Corporate Tax audit requirement specifically applies to prescribed categories such as taxpayers with revenue exceeding AED 50 million and QFZPs, while other audit obligations can arise separately.
Missing the Tax Return Because No Tax Is Due
A nil tax liability does not necessarily remove the filing obligation.
UAE Corporate Tax Compliance Checklist
Before filing, a business should check that it has:
- Confirmed its Corporate Tax registration status.
- Confirmed its correct Tax Period.
- Closed and reconciled its accounting records.
- Prepared financial statements using an accepted accounting framework.
- Identified taxable and exempt income.
- Reviewed deductible and restricted expenses.
- Checked Related Party and Connected Person transactions.
- Reviewed Tax Losses carried forward.
- Assessed Small Business Relief eligibility where relevant.
- Reviewed QFZP status if operating in a free zone.
- Confirmed whether audited financial statements are required.
- Prepared supporting schedules and records.
- Filed the Tax Return within nine months.
- Paid Corporate Tax due by the same statutory deadline.
- Retained the supporting documentation for the required record-keeping period.
How Incorpyfy Can Help With UAE Corporate Tax
Corporate Tax compliance should be integrated with bookkeeping, company structure, free zone planning and other tax obligations rather than handled only when the filing deadline approaches.
Incorpyfy can assist businesses with:
- company formation and restructuring
- Corporate Tax registration support
- accounting and bookkeeping
- Corporate Tax return preparation
- free zone Corporate Tax reviews
- QFZP and Qualifying Income considerations
- VAT registration and compliance
- coordination of financial records before filing
For companies that have not yet completed registration, see our UAE Corporate Tax registration and filing guide. For businesses already preparing their annual filing, see our Corporate Tax return filing guide. Free zone companies should also review our guide to Qualifying Income in UAE Corporate Tax before assuming the 0% rate applies.
Frequently Asked Questions
What is the UAE Corporate Tax rate?
For a standard taxable person, taxable income up to AED 375,000 is generally subject to 0%, while the portion exceeding AED 375,000 is generally subject to 9%.
Is the AED 375,000 threshold based on revenue or profit?
It applies to Taxable Income, not gross revenue. Taxable Income is generally derived from accounting net profit or loss after making the adjustments required by the Corporate Tax Law.
When did UAE Corporate Tax start?
The UAE Corporate Tax regime applies to Tax Periods beginning on or after 1 June 2023.
Do free zone companies pay Corporate Tax?
Yes, free zone companies fall within the Corporate Tax regime. A Qualifying Free Zone Person may receive 0% on Qualifying Income if all applicable conditions are satisfied.
Does every free zone company automatically receive 0% Corporate Tax?
No. The business must qualify as a QFZP and maintain the required substance, income, transfer-pricing, audit and other conditions.
What is the AED 3 million Small Business Relief threshold?
Eligible Resident Persons with revenue of AED 3 million or less in the relevant and applicable previous Tax Periods can elect for Small Business Relief, subject to the rules. The relief has been extended to qualifying Tax Periods ending on or before 31 December 2029.
Can a QFZP claim Small Business Relief?
No. Qualifying Free Zone Persons cannot elect for Small Business Relief.
Do freelancers pay UAE Corporate Tax?
A natural person can become subject to Corporate Tax when carrying on UAE Business or Business Activities and total business turnover exceeds AED 1 million during a calendar year. Salary, personal investment income and qualifying real-estate investment income are excluded from this turnover test.
When must a natural person register for Corporate Tax?
Where the AED 1 million business-turnover threshold is exceeded, the general deadline is 31 March of the following calendar year.
Do I need Corporate Tax registration if my company makes less than AED 375,000 profit?
Generally, taxable juridical persons still need to register even if their Taxable Income falls within the 0% rate band.
When is the UAE Corporate Tax Return due?
Corporate Tax returns and payment are generally due within nine months from the end of the relevant Tax Period.
When is the filing deadline for a company whose financial year ended on 31 December 2025?
The general filing and payment deadline is 30 September 2026.
How long must Corporate Tax records be kept?
Relevant Corporate Tax records should generally be retained for at least seven years following the end of the Tax Period to which they relate.
Does every UAE company need audited accounts for Corporate Tax?
No. Corporate Tax rules specifically require audited financial statements for prescribed categories, including taxable persons with revenue exceeding AED 50 million and QFZPs. Tax Groups have separate audited special-purpose financial-statement requirements. Other audit obligations may arise independently.
Can tax losses be carried forward?
Yes, subject to the conditions. Tax Losses can generally be carried forward and used against future Taxable Income, with utilisation generally capped at 75% of the relevant future Taxable Income.
Is all entertainment expenditure deductible?
No. Qualifying business entertainment expenditure is generally subject to a 50% deduction limit.
Do transfer pricing rules apply only to foreign transactions?
No. The arm’s-length rules can also apply to transactions between Related Parties and Connected Persons within the UAE.
What is the UAE Domestic Minimum Top-up Tax?
The DMTT is the UAE’s Pillar Two minimum-tax regime for qualifying entities belonging to large multinational groups with consolidated annual global revenue of at least €750 million under the applicable tests.
When did DMTT take effect?
The UAE DMTT applies to financial years starting on or after 1 January 2025.
Is DMTT an extra 15% on top of normal UAE Corporate Tax?
No. DMTT is designed to achieve the applicable 15% minimum effective tax rate under the Pillar Two framework. It is not a simple additional 15% charge added to the standard 9% rate.
Is VAT included in UAE Corporate Tax?
No. VAT and Corporate Tax are separate taxes with different rules, thresholds and filing requirements.
Final Thoughts
UAE Corporate Tax is no longer just about knowing that the headline rate is 9%. Businesses need to understand who is taxable, what counts as Taxable Income, which expenses are deductible, which income is exempt, when Small Business Relief applies, how tax losses work, whether transfer pricing applies and whether a free zone company genuinely meets QFZP requirements.For smaller businesses, the 2026 extension of Small Business Relief to qualifying Tax Periods ending on or before 31 December 2029 is an important development.
For free zone companies, 0% Corporate Tax remains available only where the Qualifying Free Zone Person requirements are actually satisfied. For large multinational groups, the DMTT has already applied to financial years beginning on or after 1 January 2025, rather than starting in 2026. And for every taxable business, good accounting remains the foundation of accurate Corporate Tax reporting. For support with company formation, accounting and tax compliance, visit Incorpyfy or explore our business setup services in Dubai.
