Who Needs to Pay UAE Corporate Tax?

Corporate tax in the UAE applies to:

• UAE companies & businesses operating in the mainland or free zones.
   
• Foreign companies with a permanent establishment in UAE.
   
• Freelancers & individuals conducting business under commercial licenses.
   
• Branches of foreign companies operating in the UAE.
   

Who is exempt?

• Government entities & certain government-controlled entities.
   
• Qualifying investment funds.
   
• Certain regulated pension or social security funds.
   
• Qualifying Free Zone Persons (QFZPs), subject to conditions.

UAE Corporate Tax Rates 2025

The UAE corporate tax regime follows a tiered tax structure:

Taxable Income                                 Tax Rate
Up to AED 375,000                               0%
Above AED 375,000                             9%
Large Multinational Groups              15%
(Pillar Two rules apply)

Small businesses benefit from a Small Business Relief Scheme under certain turnover thresholds.

Taxable Income Under UAE
E Corporate Tax Law

Corporate tax is applied on net profit (accounting income) adjusted as per tax laws.

Income included:

• Business profits
   
• Dividends (unless exempt)
   
• Interest income
   
• Rental income
   
• Capital gains (subject to conditions)
   

Non-taxable income may include:

• Exempt income from qualifying shareholdings
   
• Qualifying intra-group transactions (under transfer pricing rules)
   

Corporate Tax Exemptions in UAE

✅ Qualifying Free Zone Persons (QFZP):

• Free Zone entities can continue enjoying 0% tax on qualifying income, subject to meeting strict conditions under UAE Cabinet Decision No. 55 of 2023.
   

✅ Participation Exemption:

• Income from qualifying shareholdings may be exempt.
   

✅ Small Business Relief:

• Relief available for taxable income under AED 3 million until 2026.
   

✅ Restructuring Relief:

• Tax neutrality may apply to business restructuring if conditions are met.

Corporate Tax Registration & Filing Deadlines

• Corporate Tax Registration: Required before your tax period starts or as per FTA notification.
   
• Tax Return Filing: Must be submitted within 9 months from the end of the financial year.
   
• UAE Businesses : Businesses will begin their first corporate tax period on or after June 1, 2023, aligned with their financial year.

Example:  If your financial year ends on 31 December 2024 → file return by 30 September 2025.

 Compliance Requirements

• Maintain audited financial statements.
• Apply proper accounting standards (IFRS).
• Maintain proper records for 7 years.
• Prepare Transfer Pricing documentation if applicable.
• File tax returns electronically through the FTA portal.
   

Penalties for Non-Compliance

Failure to comply may attract:

• Late registration penalties
• Late filing penalties
• Inaccurate disclosure penalties
• Failure to maintain records penalties

FTA is actively monitoring non-compliance, so accurate filings are critical.

How Proficient Dubai Can Help

Navigating UAE Corporate Tax Law 2025 may feel complex — but you don’t have to do it alone.

At Proficient Accountants Dubai, we provide: Company Formation in Dubai

✔ Corporate Tax Registration Assistance
✔ Tax Return Filing & Compliance
✔ QFZP Eligibility Assessment
✔ VAT & Accounting Support
✔ Transfer Pricing Documentation
✔ Complete FTA Compliance