What is UAE Corporate Tax?

UAE Corporate Tax (CT) is a federal tax on the net income of businesses and individuals conducting business activity in the UAE. It is governed by Federal Decree-Law No. 47 of 2022 and administered by the Federal Tax Authority (FTA), effective 1 June 2023.

UAE Corporate Tax Rates (2025)

• 0% on taxable income up to AED 375,000 per year
• 9% on taxable income above AED 375,000
• 15% for large multinationals subject to the OECD Global Minimum Tax (Pillar Two)
• Small Business Relief: Eligible businesses with revenue below AED 3 million may elect zero taxable income for financial years ending on or before 31 December 2026

Who Must Register for UAE Corporate Tax?

Every juridical person incorporated in the UAE — LLC, PJSC, branch, Free Zone company — must register for Corporate Tax regardless of profitability. Failure to register carries penalties of AED 10,000.

Free Zone Companies and Corporate Tax

Free Zone companies can benefit from a 0% rate on their Qualifying Income if they meet the conditions to be a Qualifying Free Zone Person (QFZP). However, income from certain domestic UAE activities (Excluded Activities) is taxed at 9%. Careful analysis is required to determine qualifying status.

Transfer Pricing: The Hidden Compliance Burden

Related-party transactions must be conducted at arm's length and supported by documentation. Businesses with related-party transactions exceeding AED 40 million in aggregate per year — or AED 4 million with a single connected person — must file a Disclosure Form with their CT return.

Corporate Tax Filing Deadlines

The CT return must be filed within 9 months of the end of the tax period. For a 31 December year end, the first return for FY2024 is due by 30 September 2025.

Common Mistakes UAE Businesses Make

• Failing to register on time
• Incorrectly categorising qualifying vs non-qualifying income for Free Zone companies
• Not maintaining adequate transfer pricing documentation
• Missing related-party disclosure form requirements
• Incorrectly calculating deductible expenses (entertainment, fines, donations)
• Not electing Small Business Relief where eligible

How KPIs Advisory Group Can Help

Our licensed UAE Tax Agents provide end-to-end Corporate Tax support: registration, planning, return preparation, transfer pricing documentation, FTA audit support, and voluntary disclosure.

Contact: info@kpisadvisory.com | +971 52 89 31117