UAE Corporate Tax applies to almost every mainland and free zone business from 1 June 2023. The standard rate is 9% on taxable profits above AED 375,000. If you operate in the UAE, registration with the Federal Tax Authority (FTA) is not optional — and the penalties for late filing are steep.
This guide explains who must register, how tax is calculated, free zone exemptions, filing deadlines, and what you should do before your first return is due. Always verify current rules on the FTA website — regulations evolve.
1. Who must register for UAE corporate tax
Corporate tax applies to juridical persons — companies, branches, and certain partnerships — that are resident in the UAE or have a permanent establishment here. This includes:
- Mainland LLCs registered with DED or other emirate authorities
- Free zone companies (DMCC, IFZA, DIFC, Meydan, JAFZA, RAKEZ, and others)
- Foreign companies with a UAE permanent establishment
- Certain partnerships and unincorporated partnerships treated as taxable persons
Natural persons (individuals) are generally outside scope unless they conduct business through an unincorporated partnership or meet specific FTA criteria. If you are unsure, get a partner review before assuming you are exempt.
2. Corporate tax rates and thresholds
The UAE uses a tiered structure:
- 0% on taxable income up to AED 375,000 per tax period
- 9% on taxable income above AED 375,000
Taxable income is accounting profit adjusted for specific additions and deductions under the Corporate Tax Law. Common adjustments include non-deductible entertainment, certain fines, and transfer pricing corrections.
Businesses with revenue under AED 3 million may elect Small Business Relief — treating all taxable income as nil for that period. Free zone companies may instead pursue QFZP status for 0% on qualifying income.
3. Free zone companies and QFZP
Free zone entities are not automatically tax-free. To pay 0% corporate tax on qualifying income, a company must meet Qualifying Free Zone Person (QFZP) conditions:
- Adequate substance in the UAE (employees, expenditure, assets)
- Qualifying activities with unrelated persons (subject to exclusions)
- De minimis non-qualifying revenue below the statutory threshold
- Audited financial statements where required
- No election to be subject to standard rates
DMCC trading companies with mainland customers, IFZA consultancies with passive investment income, and DIFC holding structures each need a tailored analysis. Getting QFZP wrong means paying 9% on income you assumed was exempt.
4. How to register with the FTA
Registration is done through the FTA EmaraTax portal. You will need:
- Trade licence and legal structure documents
- Passport and Emirates ID of authorised signatories
- Bank account details and business activity codes
- Financial year / tax period election
- Group structure chart if part of a multinational group
Most businesses register within months of incorporation or when becoming taxable. Late registration triggers automatic penalties — do not wait until your first filing deadline.
5. Filing deadlines and returns
Corporate tax returns are filed annually based on your elected tax period (usually aligned with financial year). The return must be submitted and tax paid within 9 months of the end of the tax period unless the FTA specifies otherwise.
Your return includes taxable income computation, elections (SBR, QFZP), related-party disclosures, and supporting schedules. Keep transfer pricing documentation ready if you have cross-border related-party transactions.
6. Penalties to avoid
The FTA imposes penalties for:
- Late registration and failure to register
- Late filing of corporate tax returns
- Late payment of tax due
- Inaccurate returns and failure to maintain records
Penalties compound. A missed registration combined with a late first return can cost tens of thousands of AED before any tax is even assessed.
7. What to do next
If you have not registered, start now. If you are registered but your books are not CT-ready, fix your accounting before the return — not after the FTA asks questions.
Shaikh Associates handles full corporate tax compliance for mainland and free zone clients: registration, QFZP analysis, annual filing, and transfer pricing documentation. Speak to a partner or start with our 30-day free bookkeeping trial — we include a tax health-check on every trial.
Educational guide only. Tax law changes frequently. Verify requirements with the Federal Tax Authority or a qualified UAE tax advisor before making elections or filings.
Fellow Chartered Accountant (ICAI), ex-EY Tax & Advisory, and COP holder with an LLB. Arsalaan leads Shaikh Associates' UAE tax practice — 14 years in practice and 3,000+ entities advised. Connect on LinkedIn → · Full profile →
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Frequently asked questions
What is the UAE corporate tax rate?
The standard rate is 9% on taxable profits above AED 375,000 per year. Profits up to AED 375,000 are taxed at 0%.
Do free zone companies pay corporate tax in the UAE?
Free zone companies can qualify for 0% tax on qualifying income if they meet QFZP (Qualifying Free Zone Person) conditions — substance, audited financials, and no disqualifying mainland income.
When is the UAE corporate tax registration deadline?
Businesses must register within the timeframe specified by the FTA — typically within months of licence issuance or when becoming taxable. Late registration attracts penalties.
Who is exempt from UAE corporate tax?
Certain entities including qualifying free zone persons (on qualifying income), government bodies, and extractive businesses subject to emirate-level tax may be exempt or subject to different rules. Always verify with the FTA.