01The rates
UAE corporate tax applies to financial years that started on or after 1 June 2023. Taxable income up to AED 375,000 is taxed at 0% and anything above that at 9%. The threshold is on income, not revenue, so a company with AED 2 million of sales and AED 300,000 of profit pays nothing.
A qualifying free zone person can keep a 0% rate on qualifying income, but only if it meets the substance and reporting conditions and does not elect out. Income from mainland customers generally does not qualify.
02Registration is not optional
Every company incorporated in the UAE, mainland or free zone, must register with the Federal Tax Authority and obtain a tax registration number, even when its expected tax is nil. Late registration carries a fixed penalty of AED 10,000, so this is the first thing to do after the licence is issued.
03Small business relief
A resident business with revenue of AED 3 million or less in the current and all previous tax periods can elect for small business relief and be treated as having no taxable income. The relief is available for tax periods ending on or before 31 December 2026. It is an election made in the return, not something applied automatically, and a company that elects cannot carry forward losses from that period.
04What to file and when
The return is due within nine months of the end of the financial year, together with any payment. A company with a December year end files by 30 September of the following year. Accounts must be kept for seven years, and companies with revenue above AED 50 million, and all qualifying free zone persons, need audited financial statements.
- Register with the FTA as soon as the licence is issued
- Decide the financial year and keep books from day one
- Check whether small business relief or the free zone 0% rate applies
- Diarise the return nine months after year end