Corporate Tax in the UAE: A Step-by-Step Guide

Who Regulates Corporate Tax in the UAE?

Corporate tax in the UAE is administered by several key authorities:

• UAE Ministry of Finance (MoF) — defines tax policy and makes key decisions.

• Federal Tax Authority (FTA) — registers taxpayers, accepts returns, conducts audits, and issues guides and clarifications.

• Emirates Economic Development Departments — oversee business activities at the emirate level.

• Free Zones — offer tax regimes but operate within the federal legal framework.

How the Corporate Tax Rate Works — by Jurisdiction

If you're on the Mainland:

A 9% tax applies to taxable income exceeding AED 375,000. Income is calculated based on financial statements, adjusted for deductions, losses, and reliefs.

If you're in a Free Zone:

A 0% rate may apply if the following conditions are met:

1. You earn qualifying income;

2. You transact only with other Free Zones or non-UAE entities (not mainland);

3. You maintain a physical presence in the UAE and follow Free Zone rules.

Qualifying income refers to income from activities approved by the UAE Cabinet and earned within the Free Zone or from foreign clients. The list is outlined in Cabinet Decision No. 265 of 2023.

When and How to Pay Corporate Tax

Corporate tax is paid annually. After the end of the financial year, the business has 9 months to submit its return and pay any tax due.

Example: If your financial year ends on March 31, 2024 — the deadline is December 31, 2024.

For companies whose first tax period ended before February 29, 2024, the same deadline applies — December 31, 2024 (per FTA Decision No. 7 of 2024).

Who Must Register for Corporate Tax — and When

All legal entities, except those exempt under the law, must register for corporate tax. This includes resident and non-resident entities with a permanent establishment or nexus in the UAE. Individuals must register once their annual revenue exceeds AED 1,000,000.

Here’s how it works:

• Resident legal entities: If the license was issued before March 1, 2024 — register according to the official schedule (e.g., January license = register by May 31). If after March 1 — register within 3 months.

• Non-resident legal entities: Register within 3 to 9 months depending on the form of presence (nexus or permanent establishment).

• Resident individuals: Register by March 31 of the following year if income exceeds AED 1 million.

• Non-resident individuals: Register within 3 months after exceeding the income threshold.

Registration is through the EmaraTax portal. Even if you already have a VAT number, a separate registration is required for corporate tax.

After registration, you'll receive a Tax Registration Number to be used in your corporate tax return. If your registration details change, notify the FTA within 20 working days.

What Tax Reliefs Are Available in the UAE

Small businesses and other taxpayers in the UAE can benefit from several reliefs:

• Small Business Relief is available if annual revenue does not exceed AED 3 million.

• Expenses incurred to earn income — such as depreciation, interest, and license fees — can be deducted.

• Certain income may be exempt, such as dividends from subsidiaries or profits from foreign permanent establishments, if the law’s requirements are met.

Full conditions are set out in Federal Decree-Law No. 47 of 2022 and Cabinet Decisions, and are explained in Real Law’s “Small Business Relief” guide.

"Small Business Relief" guide