UAE Corporate Tax Guide: 9% Rate, AED 375,000 Threshold, Registration and Free Zone Rules

Everything business owners should know about UAE corporate tax: the 9% rate, AED 375,000 threshold, mandatory registration, qualifying free zone income and penalties.

The United Arab Emirates introduced federal corporate tax to align with international standards while keeping one of the most competitive tax environments in the world. If you own or plan to open a company in Dubai, Abu Dhabi, Sharjah or any free zone, you need to understand how it works.

The basics

• 9 percent on taxable income above AED 375,000
• 0 percent on taxable income up to AED 375,000
• Qualifying free zone persons may enjoy 0 percent on qualifying income if they meet the conditions
• No personal income tax on salaries
• VAT remains at 5 percent

Who must register?

Generally every taxable person, including mainland companies and free zone companies, must register with the Federal Tax Authority (FTA) and obtain a Tax Registration Number even if profits are low or the company expects to claim 0 percent. Late registration can attract an administrative penalty of AED 10,000.

Free zone benefits are conditional

A free zone company does not automatically pay zero tax. It must earn qualifying income, maintain adequate substance in the UAE, keep proper records and meet other tests. Income from the mainland or from non-qualifying activities may be taxed at 9 percent.

Accounting and audit requirements

Companies should keep accounting records for the required retention period and prepare financial statements. Audited accounts may be needed depending on the licence type, free zone rules and income level.

Deadlines

The corporate tax return is generally due within nine months after the end of the financial year. VAT returns are filed periodically, and penalties apply for late VAT registration and returns.

How BIZEASE SOLUTIONS can help

We assist with UAE company formation, corporate tax and VAT registration, bookkeeping, audit coordination and tax return filing. Rules and thresholds are updated by the authorities, so we confirm current requirements for every client.

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This article is general information, not legal, tax or financial advice. Rules and rates change, so confirm your situation with a qualified adviser.

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