UAE corporate tax questions, answered.

Yes. Federal corporate tax applies to financial years starting on or after 1 June 2023, under Federal Decree-Law No. 47 of 2022. Taxable income up to AED 375,000 is taxed at 0% and anything above that at 9%. Large multinational groups can also pay a top-up tax that brings their effective rate up to 15%.

UAE companies and other legal entities, on the mainland and in free zones, are within corporate tax. So are foreign companies that are effectively managed and controlled in the UAE or have a permanent establishment or other taxable presence (nexus) here, and individuals whose business turnover exceeds AED 1 million in a calendar year. Being within the system doesn't always mean paying tax: many businesses owe nothing because of the 0% band, Small Business Relief or the free zone regime. They still have to register and file a return.

On profit. Corporate tax is charged on taxable income, which starts from the net profit in your financial statements and is then adjusted under the tax rules. Revenue only matters for particular tests, such as the AED 3 million limit for Small Business Relief, the AED 50 million audit threshold and the AED 1 million turnover test for individuals.

Taxable income is your accounting profit adjusted for tax. Common adjustments include adding back half of your entertainment costs, capping net interest expense at the higher of AED 12 million or 30% of EBITDA, and removing exempt income such as qualifying dividends. Tax losses brought forward can then offset up to 75% of what is left. The first AED 375,000 of the result is taxed at 0% and the rest at 9%.

The standard rates are 0% on taxable income up to AED 375,000 and 9% on the excess. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on all other taxable income, without the AED 375,000 band. UAE entities of multinational groups with consolidated revenue of at least EUR 750 million in two of the four preceding financial years also pay a Domestic Minimum Top-up Tax that lifts their effective rate to 15%.

Each taxable person gets one AED 375,000 band, so separate companies each have their own. A Tax Group counts as a single taxable person, so the whole group shares one band. Splitting a business into several entities just to multiply the band is treated as an abusive arrangement.

Only on business income, and only when total business turnover exceeds AED 1 million in a calendar year. Wages, personal investment income and income from real estate that needs no licence never count towards that test and are outside corporate tax, whatever the amount. An individual who crosses the threshold registers by 31 March of the following year, then files and pays by 30 September.

Only if your business belongs to a multinational group with consolidated revenue of at least EUR 750 million in at least two of the four preceding financial years. For those groups, the UAE's Domestic Minimum Top-up Tax applies to financial years starting on or after 1 January 2025 and tops the effective tax rate up to 15%. The FTA has set 30 November 2026 as the registration deadline for financial years ending before 30 April 2026, and the first Top-up Tax return for calendar year 2025 is due by 30 June 2027. Registration is required even if no top-up tax is due.

Yes. Registration depends on whether you are a taxable person, not on whether tax is due. A company making a loss, a business electing Small Business Relief and a free zone company expecting to pay 0% must all register and file a return. Bodies that qualify for exemption generally register on the same timelines and then apply for exempt status.

A UAE company incorporated on or after 1 March 2024 must register within three months of its incorporation, establishment or recognition. A foreign company that is effectively managed and controlled in the UAE has three months from the end of its financial year. Companies that existed before 1 March 2024 had licence-based deadlines during 2024, and all of those dates have passed. Registering late costs a flat AED 10,000.

You must file the return and pay the tax within nine months of the end of your tax period. The FTA counts month end to month end, so a period ending 31 March 2026 is due by 31 December 2026, and calendar year 2026 is due by 30 September 2027. Returns for calendar year 2025 were due by 30 September 2026, with no extension. If a deadline falls on a weekend, file and pay by the preceding business day to be safe.

The parent company files one return for the whole group. To form a Tax Group, the parent must hold at least 95% of each member's share capital, voting rights and profits or net assets, and every member must be a UAE resident company with the same financial year and accounting standards. Exempt persons and Qualifying Free Zone Persons cannot join. Every Tax Group must also have audited aggregated financial statements, whatever its revenue.

For tax periods starting on or after 1 January 2025, Ministerial Decision No. 84 of 2025 requires audited financial statements if your revenue is over AED 50 million, if you are a Qualifying Free Zone Person, or if you are a Tax Group, whatever its revenue. A non-resident counts only the revenue of its UAE permanent establishment or nexus towards the AED 50 million. Other businesses are not required to have an audit for corporate tax, but their return is still built on their financial statements.

Keep your records for seven years after the end of the tax period they relate to. Failing to keep the required records carries a penalty of AED 10,000, rising to AED 20,000 for a repeat within 24 months. Since 30 July 2026 the FTA has also set standards for electronic and photocopied records, including complete copies and access to encrypted systems.

When your total business turnover exceeds AED 1 million in a calendar year, you register by 31 March of the following year. So if your 2026 turnover passes AED 1 million, the deadline is 31 March 2027, and your first return and payment are due by 30 September 2027. Non-resident individuals have three months from the date they meet the conditions.

Apply to deregister within three months of the business ceasing, or of the company being dissolved or liquidated. The FTA deregisters you only once every return, including the one for the period up to cessation, has been filed and all tax and penalties are paid. A late application costs AED 1,000 per month, up to AED 10,000.

Small Business Relief lets a resident business with revenue of AED 3 million or less be treated as having no taxable income for a tax period. The AED 3 million test covers the current period and every previous one, so exceeding it once ends eligibility for good. It is available for tax periods ending on or before 31 December 2029 and is elected period by period in the return. Qualifying Free Zone Persons and members of multinational groups with consolidated revenue of AED 3.15 billion or more cannot elect it.

Usually, if your taxable income would be above AED 375,000, because the relief takes your tax to nil. If you would pay nothing anyway, because profit is under AED 375,000 or you have made a loss, electing can cost you: tax losses and net interest from a relief year cannot be carried forward. If you elect it, you still register, file a simplified return by the nine-month deadline and keep records. The election is made year by year, so revisit it each time you file.

No. Ministerial Decision No. 131 of 2026 extended Small Business Relief to tax periods ending on or before 31 December 2029; the previous end date was 31 December 2026. The AED 3 million revenue test is unchanged and still covers the current period and every earlier one.

Yes, indefinitely, but a loss can offset no more than 75% of taxable income in any later period, and there is no carry-back. Losses from before corporate tax applied to you don't count. To keep them, at least 50% of the ownership must stay the same, or the same or a similar business must continue after a bigger ownership change. Losses can also be transferred between resident companies with at least 75% common ownership. Losses from a year in which you elect Small Business Relief cannot be carried forward.

It depends on the shareholding. Dividends a UAE company receives can be exempt under the participation exemption, broadly where it owns at least 5% of the payer or the stake cost at least AED 4 million, it holds or intends to hold the stake for at least 12 months, and the payer meets a subject-to-tax test benchmarked at 9%. Other conditions apply, so check each holding before treating its dividends as exempt. Dividends an individual receives on personal investments, outside a licensed business, are personal investment income and outside corporate tax.

Net interest expense is deductible up to the higher of AED 12 million or 30% of EBITDA for the period. Interest disallowed by that cap can be carried forward for up to 10 tax periods. Banks, insurers and individuals are outside this rule.

Yes. For tax periods starting on or after 1 January 2026, qualifying research and development carried out in the UAE earns a credit of 15% on the first AED 1 million of spend, 35% on the next AED 1 million and 50% from AED 2 million to AED 5 million, with a minimum number of R&D staff for each band. The maximum credit is AED 2 million a year, and it is non-refundable: it reduces corporate tax, then Top-up Tax, and any unused amount carries forward. Each project needs at least AED 500,000 of spend and pre-approval from the Emirates Research and Development Council.

It depends on your numbers. A Tax Group files one return through the parent, but it counts as a single taxable person, so the whole group gets one AED 375,000 0% band instead of one per company. Every Tax Group also needs audited aggregated financial statements, whatever its revenue. If the main aim is to use one company's losses against another's profits, a loss transfer between resident companies with at least 75% common ownership may do the job without a group, subject to conditions.

A free zone company that is a Qualifying Free Zone Person (QFZP) pays 0% on its qualifying income and 9% on all other taxable income. One that doesn't qualify, or has elected to be taxed at the standard rates, pays 0% on taxable income up to AED 375,000 and 9% above. Either way it must register, file a return every year and keep records.

A Qualifying Free Zone Person, or QFZP, is a free zone company that meets every condition of the free zone regime. It must have adequate substance in the free zone, earn qualifying income, not have elected to be taxed at the standard rates, comply with the transfer pricing rules, meet the de minimis test and prepare audited financial statements. The conditions apply in every tax period, so the status can be lost in any year.

A QFZP's non-qualifying revenue must not exceed 5% of its total revenue or AED 5 million, whichever is lower. For a company with AED 40 million of revenue the limit is AED 2 million; with AED 150 million of revenue it is AED 5 million. Breaching the limit costs QFZP status for that tax period and the next four.

It loses QFZP status from the start of the tax period in which the failure happens and for the following four tax periods: five in total. During that time its taxable income is taxed at the standard rates. That is why the conditions need monitoring during the year, not only at year end.

Ministerial Decision No. 229 of 2025 sets them out, replacing the earlier list with effect from 1 June 2023. They include manufacturing, processing, trading qualifying commodities, holding shares and securities for investment, shipping, reinsurance, fund management, regulated wealth and investment management, headquarters services and treasury and financing to related parties or for the company's own account, aircraft financing and leasing, distribution in or from a Designated Zone, logistics, and related ancillary activities. Excluded activities, such as most transactions with individuals, banking and most real estate, do not qualify.

Transactions with individuals are generally an excluded activity, so the income from them is not qualifying income. There are exceptions for some activities, including fund management, wealth management, ships and aircraft. Non-qualifying revenue counts towards the de minimis limit of 5% of total revenue or AED 5 million, whichever is lower, so a free zone company with growing sales to individuals needs to watch that limit closely.

Not if it is a Qualifying Free Zone Person: QFZPs are specifically excluded from Small Business Relief. A QFZP pays 0% on qualifying income instead, provided it meets every condition of the regime, including audited financial statements.

Yes. Under FTA Decision No. 6 of 2026, for tax periods starting on or after 1 January 2026, a QFZP that distributes goods in or from a Designated Zone needs an agreed-upon-procedures report from an independent auditor. The report is due within 30 days after the corporate tax return deadline. Without it, the distribution activity is not treated as qualifying.

A late return costs AED 500 for each month or part month for the first 12 months, then AED 1,000 a month from the 13th month. Unpaid tax also attracts a late-payment penalty of 14% a year, applied monthly from the day after the due date: about 1.17% per month or part month. Both keep running until you file and pay, so act as soon as you can.

A flat AED 10,000. It is waived, or credited to your EmaraTax account if you have already paid it, when your first corporate tax return is filed within seven months of the end of your first tax period. The waiver is applied automatically once that condition is met.

Yes. As at October 2026 the FTA has not published an end date, and the initiative applies to first tax periods past and future, provided the first return is filed within seven months of that period's end. The often-quoted date of 31 July 2026 was only the cut-off for businesses whose first tax period ended on 31 December 2025, not an end date for the programme.

Correct it before the FTA finds it. Since 1 April 2026, an error of AED 10,000 or less can be corrected in your next return, while a larger one needs a voluntary disclosure within 20 business days. The penalty on a voluntary disclosure is 1% per month on the tax difference, counted from the original due date. If the FTA notifies you of a tax audit first, the penalty becomes a fixed 15% of the tax difference plus 1% per month.

The FTA can audit or issue an assessment within five years of the end of the tax period (Federal Decree-Law No. 28 of 2022, Art. 46). That extends to 15 years in cases of tax evasion or failure to register. Keep your records for at least seven years after the end of each tax period.

Apart from the late-registration waiver, a penalty is only reduced or cancelled if the FTA agrees. You can ask the FTA to reconsider a penalty, and the outcome depends on the facts and the evidence you provide. Correcting an error early through a voluntary disclosure costs less than waiting for an audit, which adds a fixed 15% penalty.

No. Cabinet Decision No. 129 of 2025, in force from 14 April 2026, changed the penalties for VAT, excise tax and tax procedures, not corporate tax. Corporate tax penalties are still set by Cabinet Decision No. 75 of 2023, as amended by Cabinet Decision No. 10 of 2024.

AED 10,000 per violation, or AED 20,000 for a repeat within 24 months. Records must be kept for seven years after the end of the tax period. If the FTA asks for your records in Arabic and you can't provide them, there is a separate AED 5,000 penalty.