Guides · corporate-tax
Corporate tax
UAE Corporate Tax applies to all juridical persons (companies) including those in free zones. Mainland companies are taxed at 0% on taxable income up to AED 375,000 and 9% above that. Free zone companies can qualify for 0% on qualifying income if they meet conditions as a Qualifying Free Zone Person (QFZP), with 9% on non-qualifying income. Small businesses with revenue ≤ AED 3 million may elect Small Business Relief to be treated as having no taxable income, but QFZPs are not eligible. All taxable persons must register with the FTA, file annual tax returns, and pay any tax due within 9 months of the financial year-end. Late registration incurs a AED 10,000 penalty, which can be waived under certain conditions.
Dates that carry a penalty
Corporate Tax registrationAs per timelines specified in FTA Decision No. 3 of 2024 (exact dates not provided in these sources)source
Tax return filing and paymentWithin 9 months from the end of the tax periodsource
Late registration penalty waiver conditionSubmit first tax return within 7 months from the end of the first tax periodsource
Who it applies to
All juridical persons (companies) incorporated in the UAE, including those in free zones
Branches of non-resident companies registered in a UAE free zone
UAE resident natural persons conducting business (for Small Business Relief)
The rules that decide it
Standard Corporate Tax ratessource
0% on taxable income up to AED 375,000; 9% on taxable income exceeding AED 375,000. tax.gov.ae
Qualifying Free Zone Person (QFZP) benefitsource
QFZPs pay 0% on Qualifying Income and 9% on non-qualifying income, provided conditions are met. tax.gov.ae
QFZP conditionssource
Must maintain adequate substance in a free zone, derive qualifying income, comply with arm's length principle, maintain transfer pricing documentation, have audited financial statements, and non-qualifying revenue must not exceed the lower of AED 5 million or 5% of total revenue. tax.gov.ae
Small Business Reliefsource
Taxable persons (not QFZP) with revenue ≤ AED 3 million can elect to be treated as having no taxable income, exempting them from tax and transfer pricing documentation. tax.gov.ae tax.gov.ae
Registration requirementsource
All taxable persons must register for Corporate Tax with the FTA and obtain a Corporate Tax Registration Number. Late registration penalty AED 10,000, but can be waived if first return filed within 7 months of first tax period end. tax.gov.ae
Tax return and payment deadlinesource
File tax return and pay any Corporate Tax due within 9 months from the end of the relevant tax period. tax.gov.ae
Record keepingsource
Maintain all records and documents for 7 years following the end of the tax period. tax.gov.ae
Thresholds and rates
Standard Corporate Tax rate (mainland)source
0% on taxable income ≤ AED 375,000; 9% on taxable income > AED 375,000
QFZP rate on Qualifying Incomesource
0%
QFZP rate on non-Qualifying Incomesource
9%
Small Business Relief revenue thresholdsource
Revenue ≤ AED 3 million
QFZP de minimis thresholdsource
Non-qualifying revenue must not exceed the lower of AED 5 million or 5% of total revenue
Late registration penaltysource
AED 10,000
Penalties
Late registration penaltysource
not yet confirmed
Other non-compliance penalties (e.g., late filing, late payment)source
not published
Step by step
Step 1
Determine your company's tax status: mainland or free zone.
Step 2source
Register for Corporate Tax with the FTA via the EmaraTax portal.
Step 3
If free zone, assess QFZP eligibility: ensure you meet conditions (substance, qualifying income, etc.).
Step 4source
If eligible for Small Business Relief (revenue ≤ AED 3 million, not QFZP), consider making the election in the tax return.
Step 5
Prepare audited financial statements if QFZP (mandatory).
Step 6source
File annual Corporate Tax return and pay any tax due via EmaraTax within 9 months of financial year-end.
Step 7
Maintain all records for 7 years.
Common mistakes
Assuming free zone companies are automatically exempt from Corporate Tax.
Failing to register for Corporate Tax on time.
Not maintaining audited financial statements as a QFZP.
Exceeding the de minimis threshold for non-qualifying revenue and losing QFZP status.
Not filing a tax return even if no tax is due.
Not keeping transfer pricing documentation if required.
Free zone specifics
Free zone persons are taxable, but can be Qualifying Free Zone Persons (QFZP) to benefit from 0% on Qualifying Income.
QFZP conditions: adequate substance, qualifying income, arm's length compliance, transfer pricing documentation, audited financial statements, de minimis threshold (non-qualifying revenue ≤ lower of AED 5M or 5% of total revenue).
QFZPs are not eligible for Small Business Relief.
QFZPs must file tax returns and pay 9% on non-qualifying income.
Failure to meet QFZP conditions results in losing QFZP status for that tax period and the next four periods, subject to standard rates.
Questions the guide answers
What is the Corporate Tax rate for a mainland company?
0% on taxable income up to AED 375,000, and 9% on taxable income above that. tax.gov.ae
source
Can a free zone company be exempt from Corporate Tax?
A Qualifying Free Zone Person pays 0% on Qualifying Income, but 9% on non-qualifying income. It is not fully exempt. tax.gov.ae
source
What is Small Business Relief?
Taxable persons with revenue ≤ AED 3 million can elect to be treated as having no taxable income, effectively paying 0% tax, but QFZPs are not eligible. tax.gov.ae
source
When is the Corporate Tax return due?
Within 9 months from the end of the tax period. tax.gov.ae
source
What is the penalty for late registration?
AED 10,000, but can be waived if you file your first tax return within 7 months of the end of your first tax period. tax.gov.ae
source
Do I need audited financial statements?
Yes, if you are a Qualifying Free Zone Person, you must maintain audited financial statements regardless of revenue. tax.gov.ae
source
What happens if a QFZP fails to meet conditions?
It loses QFZP status from the beginning of that tax period and for the next four tax periods, and becomes subject to standard Corporate Tax rates. tax.gov.ae
source
What the research does not settle
- Exact registration deadlines for different license issuance dates not provided; refer to FTA Decision No. 3 of 2024.
- Specific penalty amounts for late filing or late payment not detailed in these sources.
- Detailed transfer pricing documentation requirements not fully specified.
- Process for electing Small Business Relief (e.g., in tax return) is mentioned but not step-by-step.
- The definition of Qualifying Activities and Excluded Activities not provided in these snippets.
- The list of Designated Zones not included.