Corporate Tax Services in Dubai

UAE Corporate Tax (CT) is a federal tax at 9% on taxable income above AED 375,000, introduced under Federal Decree-Law No. 47 of 2022. All UAE mainland businesses and most free zone companies are within scope. Registration with the FTA is mandatory and must be completed before the first CT return is due — typically within nine months of the end of the first taxable period. Late registration carries a penalty of AED 10,000.

Taxable income starts with accounting net profit as reported in the financial statements, then adjusts for items specified in the CT law: disallowed expenses (entertainment above 50%, fines, non-business expenditure), exempt income (qualifying dividends, participation exemption gains), and depreciation adjustments. Transfer pricing adjustments for related-party transactions may also apply. The result is the taxable income on which the 9% rate is applied above the AED 375,000 threshold.

Small Business Relief (SBR) allows businesses with revenue of AED 3 million or less in a tax period to elect to be treated as having no taxable income, effectively a 0% effective rate. The relief must be actively claimed on the CT return — it is not automatic. Businesses that qualify should still register with the FTA and file a return; they simply elect SBR on that return. Relief is not available to free zone persons or members of multinational groups.

A QFZP is a free zone entity that meets specific conditions under UAE CT law, including: maintaining adequate economic substance in the free zone, deriving only qualifying income from defined free zone activities, and having no permanent establishment on the UAE mainland. A QFZP pays 0% CT on qualifying income and 9% on any non-qualifying income. If non-qualifying income exceeds the de minimis threshold (5% of total revenue or AED 5 million, whichever is lower), the entity loses QFZP status and all income becomes taxable at 9%.

The FTA imposes a fixed administrative penalty of AED 10,000 for failure to register for Corporate Tax by the deadline. This is separate from any penalties for late filing or late payment of tax. Businesses that have not yet registered should do so immediately — the penalty does not increase with further delay, but interest on unpaid tax begins to accrue from the original due date.