Corporate Tax in UAE

Discover the list of efficient corporate tax solutions in UAE tailored to operating businesses in tax regulations, exemptions, and effective tax planning

1. Why the UAE Introduced Corporate Tax

Until 2023, most UAE?based companies paid 0?% on profits, with the exception of oil?&?gas and foreign bank branches. Rising global pressure for transparency, the OECDs Base Erosion & Profit Shifting (BEPS) project and the need to diversify revenue persuaded the Ministry of Finance to act. A federal Corporate Tax Law was issued in December?2022 and took effect for financial years starting on or after 1?June?2023. mof.gov.ae

The new system aims to:

• Align the UAE with international tax standards

• Curb profit?shifting while still remaining competitive

• Fund public services without resorting to personal income tax (still 0?%)

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2. Headline Rates & 2025 Updates

• 9?% Standard Rate: Applies to mainland companies and non?qualifying Free?Zone income. mof.gov.ae

• 0?% for Qualifying Free?Zone Income: Eligible revenue from goods or services provided outside the UAE or to other Free?Zone persons remains untaxed. practiceguides.chambers.com

• Pillar?Two 15?% Top?Up: From 1?Jan?2025, multinational groups with ??750?million global revenue face a domestic minimum tax if their UAE effective tax rate is below 15?%. reuters.com

• Future Incentives: A refundable 30?50?% R&D tax credit will launch in 2026, while a high?value employment credit started on 1?Jan?2025. bestaxca.com

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3. Key Compliance Deadlines Every CFO Must Track

1. Corporate Tax Registration: All taxable and exempt persons may be asked to register; delays can trigger penalties.

2. Filing & Payment: One consolidated corporate tax return within 9?months of the end of each financial year (e.g., FYE?31?Dec?2025 ? file/pay by 30?Sep?2026). mof.gov.ae

3. Audited Financial Statements: As of 1?Jan?2025, entities or tax groups with ??AED?50?million revenue must maintain audited statements for each tax period. pwc.com

4. Transfer?Pricing Disclosures: Contemporaneous transfer?pricing documentation is mandatory if related?party thresholds are met.

5. Top?Up Tax & Pillar?Two Returns: In?scope multinationals must submit a separate Pillar?Two Information Return in addition to the Top?Up Tax Return. pwc.com

Miss one of these dates and the Federal Tax Authority (FTA) can levy penalties, enforce audits and freeze bank accountsrisks no growing business should take lightly.

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4. What a Corporate Tax Accountant Actually Does

Corporate tax accountants in Dubai, Abu?Dhabi and other emirates go far beyond return?filling:

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5. Specific Challenges for Free?Zone Businesses

The Qualifying Income Test

Free?Zone entities can still enjoy 0?% tax, but only on qualifying income such as:

• Sales of goods stored in or launched from a Designated Zone

• Services to clients outside the UAE

• Royalties from patents or copyrighted software developed in?house

Notably, trademark income is excluded from the qualifying IP definition; it is taxed at 9?% yet does not disqualify the entire entity. practiceguides.chambers.com

Substance Requirements

To prove you genuinely operate in the Free?Zone, you must have:

• Adequate number of full?time staff

• Physical premises within the zone

• Annual operating expenditure in line with the activity

Corporate tax accountants gather evidence (leases, payroll records) and draft the annual Economic Substance Report your Free?Zone authority now requires.

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6. Impact on Multinationals & Pillar?Two

From 2025, the UAEs Domestic Minimum Top?Up Tax (DMTT) ensures large MNEs pay at least a 15?% effective rate. Key points:

• Applies to groups with consolidated revenue ??750?million in two of the four preceding years.

• Calculated at the jurisdictional level, not per entity.

• Requires up to 250?data points per UAE entity for the Pillar?Two Information Return. pwc.com

Corporate tax accountants integrate group reporting tools, design data flows and reconcile global consolidation differences to steer clear of double taxation and reputational damage.

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7. How to Choose the Right Corporate Tax Accountant in the UAE

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8. Frequently Asked Questions

Q1: Do small businesses under AED?375,000 profit need a tax accountant?
Technically, they pay 0?%, but must still register, keep records and file a return. An accountant ensures you dont cross the threshold unknowingly.

Q2: Is audited financial data compulsory?
Yes, if annual revenue is ??AED?50?million or you are part of a tax group. From 2025, this rule applies to all tax groups, regardless of revenue. pwc.com

Q3: Can I offset VAT input credits against corporate tax?
No. VAT and CT remain separate regimes, but consistent bookkeeping reduces overlap.

Q4: How long does FTA registration take?
With complete documents and a licensed accountant, approval often arrives within two weeks, but high demand near deadlines can extend this.