A Guide to Corporate Tax & Return Filing in UAE

Team 10xM

— 3 min read

The United Arab Emirates (UAE) is known as a business tax paradise. But recent changes have ushered in a new era with the introduction of a formal corporate tax regime. This marks a pivotal shift in the nation’s financial landscape.

In this blog, we’ll explore everything you need to know about corporate tax and filing your returns in the UAE. Understanding these new tax regulations is essential for thriving in this dynamic environment!

What is Corporate Tax in UAE? 

The UAE implemented a federal corporate tax effective from June 1, 2023. The move aligns with global tax standards and supports the country's aim to diversify its revenue sources. While the UAE remains a competitive jurisdiction, businesses must now follow a structured tax system.

Corporate tax in the UAE applies to all businesses, with specific thresholds, exemptions, and rates. The Federal Tax Authority (FTA) oversees its administration.

Who Needs to Pay Corporate Tax?

Corporate tax applies to:

  • Companies incorporated in the UAE (Mainland and Free Zones)
  • Foreign firms with a permanent establishment in the UAE
  • Persons engaged in business activities under a commercial license

Although not all income is taxable. Corporate tax in the UAE does not involve the following:

  • Salaried individuals (whether working in the public/private sectors)
  • Personal investment/interest income from savings schemes or deposits
  • Investments in real estate made in a personal capacity (without a license)
  • Dividends, capital gains earned by individuals from owning shares or other securities

Corporate Tax Rates in UAE

The UAE corporate tax rates apply as follows:

  • 0% on taxable income up to AED 375,000
  • 9% on income exceeding AED 375,000
  • A different rate applies to large multinationals under the OECD’s Pillar Two framework

This progressive structure supports small and medium enterprises (SMEs). It also ensures fair taxation of large corporations.

Key Exemptions from UAE CIT

Some entities are exempt from UAE corporate tax. These include:

  • Government and government-controlled entities
  • Extractive and non-extractive natural resource businesses
  • Qualifying public benefit entities
  • Charities and public institutions (registered with the Ministry of Finance)
  • Pension and social security funds

Free Zone companies may enjoy a 0% corporate tax rate, if they meet specific conditions and maintain adequate substance.

Corporate Tax Registration in UAE

All taxable firms must register for corporate tax through the EmaraTax platform. It is the official website provided by the FTA. Even if the company qualifies for 0% tax or exemption, registration is still required.

Steps for registration:

  1. Create an account on the EmaraTax portal via Email ID and Phone number or UAE Pass
  2. Fill in details about your business, along with contact information
  3. Submit relevant documents (trade license, Emirates ID, financials)
  4. Receive a Tax Registration Number (TRN)

It is important to complete the registration process before the due date to avoid penalties.

Taxable Income Calculation

Taxable income is based on accounting profits, prepared by International Financial Reporting Standards (IFRS). Adjustments are made for:

  • Non-deductible expenses
  • Exempt income
  • Transfer pricing adjustments

Businesses need to keep accurate financial records for their corporate tax filings.

Corporate Tax Return Filing in UAE

Businesses must file a corporate tax return annually. Here’s what you need to know:

Filing Deadline

  • The return needs to be filed within 9 months after the end of the relevant financial year. If your financial year ends on 31 December 2025, your filing deadline is 30 September 2026.

Filing Requirements

  • Prepare audited financial statements (recommended but not mandatory for all)
  • File for the return through the EmaraTax system online.
  • Disclose income, deductions, exemptions, and tax payable

Note: Despite no tax being due, the return must still be filed.

Transfer Pricing Compliance

If your business deals with related parties, transfer pricing rules apply. This means:

  • Transactions must be at arm’s length
  • Maintain transfer pricing documentation
  • Submit a Disclosure Form with the corporate tax return

These rules align with OECD guidelines. It aims to prevent profit shifting and tax avoidance.

Record-Keeping Requirements

According to UAE tax laws, companies must keep records for at least 7 years. This includes:

  • Financial statements
  • Invoices and contracts
  • Payroll records
  • Transfer pricing documents
  • Supporting documents for deductions and exemptions

Proper documentation is crucial in case of audits or reviews by the FTA.

Penalties for Non-Compliance

Failure to follow UAE corporate tax laws can lead to fines. The penalties for late registration are as follows:

  • AED 500 per month of delay during the first 12 months.
  • AED 1,000 per month of delay from the 13th month.

Additionally, there is a penalty of AED 10,000 for failing to maintain the relevant documents required for tax procedures. A repeated violation within 24 months of the last violation may result in a penalty of AED 20,000.

Staying compliant helps avoid reputational and financial risks.

Tips for Compliance

  1. Register early with the FTA
  2. Maintain clear and accurate financial records
  3. Work with a tax consultant or advisor
  4. Stay updated with FTA announcements and guides
  5. Use relevant accounting software to automate reporting and ensure accuracy

Being proactive helps streamline your tax obligations and reduces stress during filing season.

Ready to Simplify Corporate Tax & Return Filing in the UAE?

Let 10xM Consulting be your trusted partner in navigating tax regulations and optimizing compliance. Whether you're setting up a new venture or scaling your business, our experts are here to streamline the process and unlock strategic tax advantages.

Book your free consultation today and stay ahead of your tax obligations!

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