UAE Corporate Tax Guide for New Companies (9%) 2026
When the UAE introduced a federal corporate tax under Federal Decree-Law No. 47 of 2022, it marked one of the most significant changes to the country’s business environment in its modern history. For decades, the UAE had no corporate income tax on most businesses, making it one of the world’s most attractive jurisdictions for company formation. The introduction of UAE corporate tax, effective for financial years beginning on or after 1 June 2023, preserves much of that attractiveness while aligning the country with global tax transparency standards.
For new companies setting up in the UAE in 2026, understanding the UAE corporate tax framework is not optional. Registration with the Federal Tax Authority is mandatory for every company within three months of incorporation, regardless of whether the company has earned any revenue or made any profit. Missing that window attracts a fixed penalty of AED 10,000. Beyond registration, every new company needs to understand its applicable tax rate, which reliefs are available, how free zone status affects its tax position, and what its annual filing obligations look like.
This guide covers all of that in plain language. Every figure, threshold, and deadline in this article is sourced from the UAE Government Portal (u.ae), the Federal Tax Authority (tax.gov.ae), and the Ministry of Finance. No private advisory firm websites have been used as primary data sources. The article is written specifically for founders and business owners setting up a new company in the UAE in 2026 who need accurate, up-to-date information on corporate tax for business setup.
What is UAE corporate tax and what is its legal basis?
What legislation governs UAE corporate tax?
UAE corporate tax is governed by Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, which was issued on 3 October 2022 and published in Issue 737 of the Official Gazette. The law applies to tax periods commencing on or after 1 June 2023. The Ministry of Finance sets the policy and rates, while the Federal Tax Authority (FTA) is responsible for administering, collecting, and enforcing the tax. Businesses interact with the FTA through the EmaraTax digital platform for registration, filing, and payment. The law has been amended since its original issuance, and the FTA regularly publishes updated guides, public clarifications, and decisions on its website (tax.gov.ae). Source: UAE Government Portal (u.ae) and Federal Tax Authority (tax.gov.ae).
What is the scope of UAE corporate tax?
As set out on the UAE Government Portal, UAE corporate tax applies to: all businesses and individuals conducting business activities under a commercial licence in the UAE; free zone businesses (subject to the specific free zone regime discussed later); foreign entities and individuals conducting a trade or business in the UAE on an ongoing or regular basis; banking operations; and businesses engaged in real estate management, construction, development, agency, and brokerage activities. In summary, if a business or individual earns income from commercial activities in the UAE, UAE corporate tax will apply unless a specific exemption covers that entity. There is no general carve-out for small companies based solely on size, and no distinction based on the nationality of the owner. Source: UAE Government Portal (u.ae), Corporate Tax section.
Why did the UAE introduce corporate tax?
The UAE Government Portal explains three stated objectives for introducing UAE corporate tax. First, to cement the UAE’s position as a leading global hub for business and investment. Second, to accelerate the country’s development and transformation to achieve its strategic objectives. Third, to reaffirm the UAE’s commitment to meeting international standards for tax transparency and preventing harmful tax practices, in line with OECD Base Erosion and Profit Shifting (BEPS) frameworks. The UAE corporate tax rate of 9 per cent is one of the lowest headline corporate tax rates of any major economy globally, and the introduction of tax transparency measures was a prerequisite for maintaining the UAE’s position on international cooperation frameworks. Source: UAE Government Portal (u.ae).
Which businesses must pay UAE corporate tax and which are exempt?
Which entities are taxable persons under UAE corporate tax?
A taxable person is any juridical or natural person that is subject to UAE corporate tax. For the purposes of corporate tax for business setup, the most relevant taxable persons are juridical persons (companies, LLCs, free zone entities, partnerships with separate legal personality) that are either resident in the UAE or derive income from the UAE through a permanent establishment. The FTA Corporate Tax Registration page confirms that all taxable persons must register and obtain a Corporate Tax Registration Number. There is no minimum revenue threshold for registration by juridical persons: a newly incorporated company with zero revenue is still required to register. Natural persons (individuals conducting business or business activities) must register if their total turnover in a calendar year exceeds AED 1 million. Source: FTA corporate tax registration page (tax.gov.ae).
Which entities are exempt from UAE corporate tax?
The UAE Government Portal sets out four categories of entities that are exempt from UAE corporate tax, as follows:
| Category | Exempt Entity Type | Basis of Exemption |
| A | UAE government entities and government-controlled entities specified in a Cabinet Decision | Automatically exempt; no application required |
| B | Extractive businesses (oil and gas, mining, quarrying) | Exempt if notified to Ministry of Finance; conditions apply |
| B | Non-extractive natural resource businesses | Exempt if notified to Ministry of Finance; conditions apply |
| C | Qualifying Public Benefit Entities listed in a Cabinet Decision | Exempt if listed in the Cabinet Decision |
| D | Public or private pension and social security funds | Exempt if applied to and approved by FTA; conditions apply |
| D | Qualifying Investment Funds (e.g. approved investment funds) | Exempt if applied to and approved by FTA; conditions apply |
| D | Wholly-owned UAE subsidiaries of government entities, QIFs, or pension funds | Exempt if applied to and approved by FTA; conditions apply |
For new companies setting up in standard commercial or professional activities, the exemptions above will generally not apply. Standard mainland LLCs, free zone companies, and branch offices are taxable persons subject to UAE corporate tax unless a specific relief (such as Small Business Relief or the Qualifying Free Zone regime) reduces their effective tax rate.
Register for Corporate Tax with Confidence
New companies must register within 3 months of incorporation. Our team handles your EmaraTax registration and first-year CT compliance from start to finish.
What are the UAE corporate tax rates applicable to new companies?
What is the standard UAE corporate tax rate?
As published by the Ministry of Finance and confirmed on the UAE Government Portal, UAE corporate tax is levied at two tiers for most businesses:
| Taxable Income Tier | Applicable Rate | Notes |
| Taxable income up to AED 375,000 per year | 0% | No tax is payable on this portion of income for any taxable person |
| Taxable income above AED 375,000 per year | 9% | Tax applies only to the portion above the AED 375,000 threshold |
| Income of Qualifying Free Zone Persons on Qualifying Income | 0% | Requires meeting all QFZP conditions; income not meeting conditions is taxed at 9% |
| Large multinationals meeting Pillar Two criteria (revenue over EUR 750 million) | Minimum top-up rate (15% global minimum) | Pursuant to Federal Decree-Law No. 60 of 2023; separate rules apply |
How is taxable income calculated for a new company?
Taxable income for a UAE company is calculated starting from the company’s net accounting profit or loss as shown in its financial statements, prepared in accordance with internationally accepted accounting standards. Certain adjustments are then applied under the Corporate Tax Law: specific types of income may be exempt (such as dividends received from UAE resident companies), certain expenditures may be non-deductible, and reliefs such as loss carry-forward, participation exemption, and group relief may apply. The FTA has published a detailed guide on the Determination of Taxable Income (CTGDTI1) on its website (tax.gov.ae). For businesses with revenue below AED 3 million, the Cash Basis of Accounting may be used for the financial statements that form the starting point for taxable income calculation; businesses above that threshold must use the Accrual Basis. Source: Federal Tax Authority, Determination of Taxable Income Guide (tax.gov.ae).
Are dividends and capital gains subject to UAE corporate tax?
Dividends received from companies resident in the UAE are exempt from UAE corporate tax under the participation exemption, as confirmed in the FTA’s Small Business Relief guide and other FTA publications. Dividends from foreign companies may also qualify for the participation exemption if certain conditions regarding the ownership stake and the foreign company’s tax status are met. Capital gains on the disposal of qualifying shareholdings in both domestic and foreign entities may similarly be exempt under the participation exemption rules. New companies that hold shares in other entities should review the FTA’s guidance on the participation exemption to understand whether income from those holdings will be subject to UAE corporate tax. Source: FTA guides (tax.gov.ae).
What is Small Business Relief and how does it apply to new companies?
What is the Small Business Relief scheme?
Small Business Relief (SBR) is a corporate tax relief introduced under Article 21 of the UAE Corporate Tax Law and Ministerial Decision No. 73 of 2023. It allows eligible taxable persons to be treated as having zero taxable income for the relevant tax period, effectively reducing their UAE corporate tax liability to nil without the need to calculate a detailed taxable income figure. SBR is an election that must be made in the tax return for each tax period in which the business wishes to benefit from it; it does not apply automatically. Source: Federal Tax Authority, Small Business Relief Corporate Tax Guide (CTGSBR1), August 2023 (tax.gov.ae).
Who is eligible for Small Business Relief?
To elect for Small Business Relief, a taxable person must meet the following conditions as set out in the FTA guide:
- Revenue in the current tax period is equal to or less than AED 3,000,000.
- Revenue in all previous tax periods has also not exceeded AED 3,000,000 per period. The relief is not available if the revenue threshold was exceeded in any prior period.
- The taxable person is not a member of a Multinational Enterprise group (as defined in the Corporate Tax Law).
- The taxable person is not a Qualifying Free Zone Person. QFZPs have access to the 0% qualifying income rate under the free zone regime and are explicitly excluded from SBR.
When SBR is elected, the business is not required to submit transfer pricing documentation (though it must still comply with the arm’s length principle), does not need to calculate taxable income in full, and is treated as having no taxable income for the period. Source: FTA, Small Business Relief Guide CTGSBR1 (tax.gov.ae).
When is Small Business Relief scheduled to expire?
The FTA’s Small Business Relief Guide confirms a specific restriction: SBR is available only for tax periods that end on or before 31 December 2026. For businesses following the calendar year (January to December), the 2026 tax period ending 31 December 2026 is the last period for which SBR can be elected under the current rules. Businesses whose financial year ends before 31 December 2026 can also use SBR for periods ending in 2024, 2025, and 2026. The UAE Government has not announced an extension of SBR beyond this date as of June 2026. New companies setting up in 2026 that are eligible for SBR should factor this scheduled expiry into their long-term tax planning. Source: FTA, Small Business Relief Guide CTGSBR1 (tax.gov.ae).
Find Out if Your Business Qualifies for Small Business Relief
SBR is only available until December 2026 tax periods. Our tax advisors will assess your eligibility and help you elect correctly in your return.
How does UAE corporate tax apply to free zone companies?
Are free zone companies subject to UAE corporate tax?
Yes, all free zone companies are subject to UAE corporate tax and must register with the FTA. The UAE CT regime does not exempt free zone companies from corporate tax as a whole. Instead, it provides a preferential 0 per cent rate for Qualifying Free Zone Persons (QFZPs) on their Qualifying Income, while income that does not qualify is taxed at the standard 9 per cent rate. The UAE Government Portal confirms that the CT regime will continue to honour the CT incentives offered to free zone businesses that comply with all regulatory requirements and that do not conduct business directly with the UAE mainland in a manner that causes them to lose their QFZP status. Source: UAE Government Portal (u.ae); FTA Corporate Tax Guide for Free Zone Persons (CTGFZP1, May 2024).
What conditions must a free zone company meet to qualify for 0% tax?
The FTA published the Corporate Tax Guide for Free Zone Persons (CTGFZP1) in May 2024. To qualify as a Qualifying Free Zone Person and benefit from the 0 per cent rate on Qualifying Income, a free zone company must meet all of the following conditions:
- Maintaining adequate substance in the free zone: the company must have genuine operational presence, including qualified staff and appropriate assets within the free zone.
- Deriving Qualifying Income: income must consist of transactions with other free zone persons, certain transactions with non-free zone persons (where specifically permitted), or other income from Qualifying Activities defined in Ministerial Decision No. 229 of 2025.
- Not having elected to be subject to the standard CT regime: a QFZP must not have voluntarily chosen to be taxed at the standard 9 per cent rate.
- Complying with the Arm’s Length Principle and transfer pricing documentation requirements.
- Ensuring non-qualifying revenues do not exceed the de minimis threshold, as set out in the relevant ministerial decision.
- Preparing audited financial statements in accordance with UAE accounting standards.
- Meeting any other conditions prescribed by the Minister from time to time.
Failure to meet any one of these conditions can result in the loss of QFZP status not only for the period in question but for that period and the four subsequent tax periods, even if all conditions are subsequently fulfilled. Source: FTA, Corporate Tax Guide for Free Zone Persons CTGFZP1 (tax.gov.ae).
What activities are excluded from Qualifying Income in free zones?
Ministerial Decision No. 229 of 2025 sets out the Qualifying Activities and Excluded Activities for QFZPs (superseding Ministerial Decision No. 265 of 2023, effective retroactively from 1 June 2023). Excluded Activities are those that cannot form part of Qualifying Income, meaning income derived from them is subject to the standard 9 per cent rate rather than 0 per cent. These include, among others, certain transactions with natural persons (individuals) in the UAE mainland, ownership or exploitation of immovable property located outside free zones, and certain financial services activities conducted outside the free zone framework. The FTA provides detailed guidance on both qualifying and excluded activities in its free zone guide on tax.gov.ae. Free zone companies that carry out even small amounts of excluded activity revenue must track this carefully against the de minimis threshold to preserve their QFZP status.
What are the registration and filing obligations for newly incorporated companies?
When must a new company register for UAE corporate tax?
The FTA issued Decision No. 3 of 2024 setting specific registration deadlines for corporate tax. For new companies, the rule is clear: a juridical person that is a Resident Person incorporated, established, or otherwise recognised under UAE law on or after 1 March 2024 must apply to register for corporate tax within three months from the date of incorporation, establishment, or recognition. This means a company incorporated on 1 January 2026 must submit its registration application through EmaraTax by 1 April 2026. The FTA has confirmed that all businesses, including free zone entities, are required to register for corporate tax regardless of whether they have any revenue or taxable income. Source: FTA Decision No. 3 of 2024; FTA corporate tax registration page (tax.gov.ae).
How is the first tax period determined for a new company?
The first tax period for a new UAE company begins on the date of its incorporation and runs to the end of the financial year specified in its Memorandum and Articles of Association. If the Memorandum is silent on the financial year, it defaults to the calendar year (January to December) under the corporate tax rules. The FTA has published a Public Clarification on this topic, noting that if the first tax period is shorter or longer than 12 months, the various thresholds under the Corporate Tax Law (including the AED 375,000 income threshold and the AED 3,000,000 SBR revenue threshold) are not pro-rated. The only exception is the de minimis threshold for the General Interest Deduction Limitation Rule, currently set at AED 12 million. Source: FTA Public Clarification on the First Tax Period (tax.gov.ae).
What is the timeline for filing the annual corporate tax return?
The corporate tax return and any associated tax payment must both be submitted within nine months from the end of the relevant tax period. For a company using the calendar year as its financial year, the tax period ends on 31 December each year, meaning the return and payment are due by 30 September of the following year. For a calendar year company, the return and payment for the tax period ending 31 December 2025 are due by 30 September 2026. There is no general mechanism for an extension of the filing deadline, and the FTA does not grant discretionary extensions. All returns are filed electronically through the EmaraTax portal. Even if a company has zero taxable income and zero tax payable, the return must still be filed on time. Source: FTA corporate tax guidance (tax.gov.ae).
What records must a new company maintain for corporate tax purposes?
All taxable persons are required to maintain accounting records, financial statements, supporting documents, and any other records relevant to the determination of taxable income. These records must be kept for a minimum of seven years from the end of the relevant tax period. The FTA may request records in Arabic and may seek access to documents during audits or reviews. For companies with revenue below AED 3 million, the cash basis of accounting may be used. Companies above that threshold must use the accrual basis. Free zone companies electing QFZP status must also prepare and maintain audited financial statements; this is a mandatory condition of the QFZP regime and cannot be waived. Source: FTA Determination of Taxable Income Guide CTGDTI1 (tax.gov.ae).
Never Miss a Corporate Tax Deadline
From EmaraTax registration to annual return filing, our compliance team manages every CT obligation so you stay fully compliant and penalty-free.
What administrative penalties apply for UAE corporate tax non-compliance?
What is the penalty for late corporate tax registration?
The FTA imposes a fixed administrative penalty of AED 10,000 for failing to submit a corporate tax registration application by the prescribed deadline. This penalty applies automatically when the deadline is missed; there is no discretion on the FTA’s part to waive it unless the penalty waiver mechanism described below is used. Multiple deadlines set out in FTA Decision No. 3 of 2024 apply based on the category of taxable person (resident or non-resident, juridical or natural person). For companies incorporated on or after 1 March 2024, the three-month registration window is the relevant deadline. Source: FTA, corporate tax registration guidance and Decision No. 3 of 2024 (tax.gov.ae).
| Compliance Action | Deadline | Penalty for Non-Compliance |
| Corporate Tax Registration (new company incorporated on or after 1 March 2024) | Within 3 months of the date of incorporation | AED 10,000 fixed penalty for late registration |
| Corporate Tax Registration (natural person: individual with turnover exceeding AED 1 million) | By 31 March of the following calendar year | AED 10,000 fixed penalty for late registration |
| Annual Corporate Tax Return Filing and Tax Payment | Within 9 months from the end of the tax period | AED 500 per month for first 12 months; AED 1,000 per month thereafter |
| Late Payment of Tax Due | Within 9 months from the end of the tax period | Monthly penalty of 14% per annum on the unpaid amount |
| Penalty Waiver for Late Registration | File first tax return within 7 months of first tax period end | AED 10,000 penalty waived or refunded; effective from 14 April 2025 |
| Record-Keeping Minimum Period | 7 years from end of the relevant tax period | Separate penalty for failure to maintain or provide records when requested |
| Notifying FTA of Changes to Registered Details | Within 20 business days of the change | Penalty applies for failure to notify |
What is the late registration penalty waiver?
From 14 April 2025, the UAE Cabinet approved a mechanism to waive the AED 10,000 late corporate tax registration penalty. Under this mechanism, if a taxable person files their first corporate tax return (or annual declaration) within seven months of the end of their first tax period, the FTA will waive or automatically credit back the AED 10,000 late-registration penalty. This waiver was welcomed by many new businesses that had inadvertently missed the three-month registration window. However, relying on this waiver is not advisable because filing within seven months is not always possible for very new businesses, and the rules around when exactly the first tax period ends can be complex. The safest approach remains registering within three months of incorporation. Source: FTA announcement on the corporate tax late registration penalty waiver initiative (tax.gov.ae).
Are there other corporate tax penalties new companies should know about?
The corporate tax administrative penalty regime under Cabinet Decision No. 75 of 2023 (as amended by Cabinet Decision No. 10 of 2024) includes penalties for a range of compliance failures beyond late registration and late filing. These include failure to maintain proper accounting records, failure to notify the FTA of changes to registered information within 20 business days, providing inaccurate information in a tax return, and failing to respond to FTA information requests. Any error or omission discovered after filing can be corrected through an amended return or a voluntary disclosure through EmaraTax, which typically attracts lower penalties than corrections made after an FTA audit finding. Source: FTA administrative penalties guidance (tax.gov.ae).
What key reliefs and deductions can new companies use to reduce their tax burden?
What is the participation exemption?
The participation exemption is a relief that allows companies to exclude from their taxable income certain dividends and capital gains received from ownership interests in other companies. Dividends received from UAE resident companies are exempt from UAE corporate tax without any additional conditions. Dividends and capital gains from foreign companies may qualify for the participation exemption if the UAE company holds at least a 5 per cent ownership interest in the foreign company, the foreign company is not an Exempt Person or a resident of a non-cooperative jurisdiction, and other conditions set out in the Corporate Tax Law are met. This relief is particularly important for holding companies and investment vehicles incorporated in the UAE that manage international subsidiaries or equity portfolios. Source: FTA Determination of Taxable Income Guide CTGDTI1 (tax.gov.ae).
What is Qualifying Group Relief?
Qualifying Group Relief allows companies that are part of the same UAE corporate group to transfer assets and liabilities between group members without triggering a taxable gain or loss, provided certain conditions are met. The companies must be UAE residents, the transferor must hold a direct or indirect ownership interest of at least 75 per cent in the transferee (or vice versa), and neither company must be a Qualifying Free Zone Person. This relief enables UAE groups to reorganise their corporate structures efficiently from a tax perspective. Separate rules govern Business Restructuring Relief for broader corporate mergers and demergers. Source: FTA Qualifying Group Relief Guide CTGQGR1 (tax.gov.ae).
How can new companies carry forward tax losses?
Under the UAE Corporate Tax Law, tax losses incurred by a taxable person can be carried forward and used to reduce taxable income in future tax periods. Tax losses can be carried forward indefinitely (there is no expiry period), but the amount of loss that can be offset in any single tax period is limited to 75 per cent of the taxable income of that period before the loss relief is applied. This means a company that incurs a loss in its first year of operations can use that loss to reduce its UAE corporate tax liability in subsequent profitable years. Companies that have elected for Small Business Relief in a prior period should review the FTA guidance on how that interacts with the loss carry-forward rules. Source: FTA Corporate Tax Law and related guides (tax.gov.ae).
What is the foreign tax credit for UAE companies?
A UAE resident company that pays taxes in a foreign jurisdiction on income that is also subject to UAE corporate tax may claim a foreign tax credit. The credit reduces the UAE corporate tax payable by the amount of foreign tax paid, but it cannot result in a credit that exceeds the UAE corporate tax that would otherwise be due on that income. This prevents double taxation on internationally derived income. The foreign tax credit is claimed in the corporate tax return through EmaraTax. Companies with significant cross-border revenue streams, royalties, or service income from international clients should assess the foreign tax credit’s relevance to their tax position. Source: FTA Determination of Taxable Income Guide CTGDTI1 (tax.gov.ae).
Maximise Your Tax Reliefs from Day One
Many new companies miss out on participation exemptions, loss carry-forwards, and group relief. Let our advisors structure your company for maximum UAE corporate tax efficiency.
Practical tips for UAE corporate tax compliance for new companies
- Register for corporate tax within three months of incorporation. This is the single most time-sensitive obligation for any new company in the UAE. Set a calendar reminder for the day of incorporation and initiate the EmaraTax registration process that same week. The AED 10,000 penalty for late registration is fixed and immediate.
- Confirm your financial year in your Memorandum and Articles of Association before filing. If the Memorandum is silent, the FTA defaults to the calendar year. If your business has good reasons to use a different financial year (e.g., aligning with a parent company), specify it explicitly in the founding documents before submitting your registration to the FTA.
- Assess your Small Business Relief eligibility before your first tax return is due. If your revenue is below AED 3,000,000, you may elect SBR and treat your taxable income as zero for the period, which dramatically simplifies your first-year compliance. Note that SBR is not available to QFZPs or multinational enterprise members, and is currently restricted to tax periods ending on or before 31 December 2026.
- Free zone companies must satisfy all QFZP conditions from day one. The 0% qualifying income rate is not automatic. Meet all seven conditions in the FTA’s CTGFZP1 guide from the moment you start operations. Losing QFZP status can result in the standard 9% rate applying for five consecutive tax periods. An early review of your activity list against the Qualifying Activities and Excluded Activities in Ministerial Decision No. 229 of 2025 is essential.
- Open EmaraTax and familiarise yourself with the platform immediately after registration. The EmaraTax portal (eservices.tax.gov.ae) is the sole channel for registration, filing, payment, and amendments. There is no paper alternative. Building familiarity with the portal early avoids last-minute problems at the filing deadline.
How can BusinessSetupHQ help your new company navigate UAE corporate tax?
Setting up a new company in the UAE is straightforward. Staying fully compliant with UAE corporate tax from day one is where many new business owners face their first real challenge. Registration deadlines, financial year decisions, SBR elections, QFZP eligibility assessments, and annual return filings all require attention from the moment you receive your trade licence.
BusinessSetupHQ is a licensed UAE company formation and compliance services provider with over 22 years of combined experience. Our consultants support new companies with EmaraTax registration, first-year corporate tax assessment, Small Business Relief eligibility analysis, free zone QFZP structuring advice, and annual filing coordination with registered tax agents. We ensure your corporate tax for business setup is handled correctly from incorporation to first return, so you can focus on building your business.
Contact BusinessSetupHQ at businesssetuphq.com for a free initial consultation. Our team will assess your specific situation and set out your corporate tax obligations in plain language within 24 hours.
Testimonials:
Frequently asked questions: UAE corporate tax for new companies
Any company formed on or after 1 June 2023 is within the corporate tax regime from the date of its incorporation. There is no transition period for new companies. A company incorporated on 15 March 2026, for example, begins its first tax period on 15 March 2026 and is subject to UAE corporate tax from that date. The first tax period runs to the end of the company’s financial year as specified in its founding documents. The three-month registration clock also starts running on the date of incorporation.
Yes. The FTA is explicit on this point: there is no minimum revenue threshold for corporate tax registration by juridical persons (companies). All companies incorporated in the UAE must register for corporate tax within three months of incorporation, regardless of whether they have commenced trading, generated any revenue, or expect to make any profit. Only natural persons (individuals) have a revenue-based registration threshold (AED 1 million in a calendar year). A dormant company is not exempt from the registration requirement. Source: FTA corporate tax registration page (tax.gov.ae).
UAE corporate tax is levied on taxable income, which is broadly the net profit of the company, not its gross revenue. The starting point is the net accounting profit from the company’s financial statements. Certain adjustments are made under the Corporate Tax Law: some income is exempt (for example, dividends from UAE residents), some expenditures are non-deductible, and reliefs such as Small Business Relief or loss carry-forward can reduce the taxable amount further. The 9% rate then applies to taxable income above AED 375,000. Revenue is relevant for determining eligibility for SBR and for accounting method selection, but the tax itself is calculated on net profit after all adjustments. Source: FTA Determination of Taxable Income Guide CTGDTI1 (tax.gov.ae).
EmaraTax is the Federal Tax Authority’s digital tax services platform, accessible at eservices.tax.gov.ae. It is the sole official channel through which all corporate tax obligations are fulfilled: registration, filing of annual tax returns, payment of tax due, amendment of returns through voluntary disclosure, and deregistration when a company ceases operations. New companies must create an EmaraTax account and complete the corporate tax registration application on that platform within three months of incorporation. The FTA has published guidance confirming that the registration process involves four steps and takes approximately 30 minutes. UAEPass credentials are required to access FTA services. Source: FTA corporate tax registration page (tax.gov.ae).
Yes, subject to conditions. A free zone company that qualifies as a Qualifying Free Zone Person (QFZP) under the UAE Corporate Tax Law benefits from a 0% rate on its Qualifying Income. To qualify, the company must maintain adequate substance in the free zone, derive income from Qualifying Activities, not elect the standard regime, comply with the arm’s length principle, ensure excluded activity revenue stays within de minimis limits, and prepare audited financial statements. Income from Excluded Activities is taxed at 9%. Free zone companies must still register for UAE corporate tax and file annual returns even if their entire income qualifies for the 0% rate. Source: FTA Corporate Tax Guide for Free Zone Persons CTGFZP1, May 2024 (tax.gov.ae).
No. The UAE does not levy personal income tax on individuals. The corporate tax rate of 9% applies to businesses and business activities, not to personal employment income, salaries, or investment income earned by individuals outside of a business context. There is no capital gains tax on personal investment portfolios. There is no inheritance tax or wealth tax. The UAE Government Portal confirms that the current personal income tax rate is 0 per cent. Individuals who operate a sole proprietorship or unincorporated business and whose total turnover from business activities exceeds AED 1 million in a calendar year do, however, become subject to corporate tax in their capacity as a natural person conducting business. Source: UAE Government Portal (u.ae); FTA natural persons CT registration guidance (tax.gov.ae).
If a company is not eligible for Small Business Relief (because its revenue exceeds AED 3 million, it is a Qualifying Free Zone Person, or it is a member of a multinational enterprise group), it must calculate its taxable income in full using its financial statements as the starting point, adjusted as required by the Corporate Tax Law. It will then pay 9% on any taxable income above AED 375,000. The company must also comply with transfer pricing rules if it has related-party transactions, which means maintaining documentation demonstrating that intercompany transactions are conducted at arm’s length. The full calculation is not necessarily complex for most SMEs, but professional advice is recommended for the first return to ensure all available deductions and reliefs are correctly claimed.
Missing the nine-month filing deadline triggers automatic administrative penalties. Late filing attracts a penalty of AED 500 per month for the first twelve months of delay, rising to AED 1,000 per month from the thirteenth month onwards. Late payment of tax due triggers a monthly penalty calculated at 14% per annum on the unpaid amount. The FTA does not offer general deadline extensions for corporate tax. Any errors or omissions discovered after filing can be corrected through an amended return or voluntary disclosure via EmaraTax, which typically attracts lower penalties than corrections identified during an FTA audit. Source: FTA administrative penalties guidance; Cabinet Decision No. 75 of 2023 as amended (tax.gov.ae).
