What is corporate tax in the UAE?

Corporate tax in the UAE is a federal corporate tax on the net income of businesses in the UAE, introduced under the UAE corporate tax law to tax profits while keeping the country competitive for investors.

What is the UAE corporate tax rate?

From June 2023, the standard corporate tax rate is 9% on taxable income above AED 375,000, with 0% below this threshold. Some income may be exempt or treated differently under specific provisions of the corporate tax law.

When did UAE corporate tax commence?

Federal corporate tax applies for financial years starting on or after 1 June 2023. For many companies with a calendar financial year, this means corporate tax in the UAE first applies from the 1 January 2024 to 31 December 2024 period.

What are penalties for late filing?

Late or incomplete corporate tax return filing triggers administrative penalties under FTA rules. Penalties start at AED 1,000 for first-time late filing and can increase with repeat violations, plus interest on unpaid tax.

Which income is subject to corporate tax?

Corporate tax applies to taxable income such as net income from business activities and many forms of income earned in the UAE, including certain capital gains and dividends, subject to exemptions and reliefs set out in the tax law.

Are free zone businesses taxed?

Free zone entities can qualify for a 0% corporate tax rate on qualifying income if they meet substance, activity and other conditions. Non‑qualifying income, such as some mainland revenues, is usually subject to corporate tax in the UAE.

Is this the same as personal income tax?

No. Corporate tax targets business profits, not most personal salary income. Individuals in employment generally do not pay income tax in the UAE, though their companies may still be subject to corporate tax on taxable profits.

Who oversees UAE corporate tax rules?

The Ministry of Finance sets federal corporate tax policy and issues the corporate tax law, while the Federal Tax Authority administers registration, tax returns, assessments, and enforcement for businesses in the UAE.

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Understanding UAE corporate tax can be complex, with 0% and 9% rates, free zone rules, and FTA requirements. Rizmona provides practical guidance—from impact assessment and registration to return filing and structuring—helping your business stay fully compliant while optimizing tax exposure.

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Understanding UAE Corporate Tax

UAE Corporate Tax is a profit-based tax applied to the net income of businesses. Under the current system, companies pay 0% tax on profits up to AED 375,000, which supports small and growing businesses. Any profit above AED 375,000 is taxed at 9%, making it one of the most competitive tax rates in the world. The tax does not apply to personal income, such as salaries, rental earnings from personal property, or most investment returns.

This tax framework officially began for financial years starting on or after 1 June 2023. Its purpose is to align the UAE with global tax standards while keeping the business environment attractive and investor-friendly. The system creates more transparency, encourages proper accounting, and supports long-term economic stability.

For companies, this means clearer rules and better financial planning. Businesses can understand their tax obligations ahead of time, manage profit thresholds, and prepare accurate financial statements. Working with a skilled tax advisor helps ensure compliance, prevents penalties, and makes the filing process smooth and stress-free.

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Our Corporate Tax Services

Impact Review

Rizmona shows how corporate tax affects profits, structures, and group arrangements for better planning.

Tax Registration

We handle your EmaraTax registration, secure your TRN, and manage all FTA communication.

Return Filing

Rizmona prepares and files accurate corporate tax returns and keeps your records fully compliant.

Advisory & Planning

We guide business structuring, free zone benefits, reliefs, and tax groups to optimize rates efficiently.

Strategic Tax Planning for Compliance

Proactive tax planning helps UAE businesses reduce tax liabilities, enhance cash flow, and keep up with regulatory shifts. By reviewing your group structure and eligible incentives early, you avoid last‑minute surprises at tax time.

Proper recordkeeping is essential. Companies must keep their financial and supporting documents for at least seven years, ready to show the FTA in case of review. Weak records can trigger audits and costly penalties.

Strategic Tax Planning for Compliance

What is the Difference Between Corporate Tax and VAT?

Corporate tax is charged directly on a company’s annual net profits after expenses. VAT, by contrast, is an indirect tax collected at each sale or purchase in the supply chain. Both require strict, accurate returns and reports to UAE regulators.

VAT is paid more frequently—often monthly or quarterly—while corporate tax is filed yearly. Understanding both helps businesses avoid compliance mistakes and manage costs throughout the year.

Are Free Zone Businesses Subject to Corporate Tax?

Eligible free zone companies can enjoy a 0% corporate tax on qualifying income if they meet all compliance rules and report only eligible profits.

If conditions aren’t met or profits are distributed to non-qualifying parties, the standard 9% tax applies to those earnings. All UAE businesses must file annual corporate tax returns and maintain complete records.

What is the corporate tax for freelancers?

Freelancers in the UAE must obtain a professional business license, classifying them as legal entities for tax purposes. Unlike individual income, which is generally tax-free, freelancers are subject to a 9% corporate tax on profits exceeding AED 375,000 (approximately $100,000). Profits below this threshold are exempt from corporate tax, allowing small-scale freelancers to operate without significant tax burdens. Freelancers are still required to comply with UAE corporate tax regulations. Corporate tax advisory services are beneficial for freelancers looking to understand their tax obligations. They will pay a 9% corporate tax only on earnings above AED 375,000. Corporate tax consultants in Dubai can assist freelancers in managing their tax filings and ensuring full compliance with corporate tax laws.

Why Timing Matters?

Registering for UAE corporate tax early avoids penalties and last-minute issues with FTA deadlines. It gives your team enough time to gather documents, update accounting systems, and resolve any business structure gaps.

Late registration can result in fines, loss of tax certificates, and operational delays, affecting your ability to trade or win government contracts. Early compliance helps build trust with clients, banks, and authorities.

Why Timing Matters?

Trusted Guidance on Corporate Tax

Corporate tax rules in the UAE are new, technical, and still evolving. Businesses now need to interpret fresh legislation, free zone guidance, and FTA decisions while keeping everyday operations running smoothly.

Experienced corporate tax consultants like Rizmona translate these rules into plain language, review how they affect your legal structure and cash flow, and help you avoid costly mistakes in registration, calculations, and filing.

Trusted Guidance on Corporate Tax

Key Advantages of Expert Tax Advisory

Accurate Tax Calculations

Profit reports comply with all FTA rules for correct tax and less audit risk.

Deadline Tracking

On-time reminders for every FTA filing and payment; no deadline missed.

Free Zone Compliance

Guidance to meet 0% tax conditions and keep incentives for qualified income.

Audit Support

Documents prepared and organized ahead for fast, hassle-free FTA reviews.

Group Structuring Help

Tax experts recommend the best UAE structure for lower rates and legal reliefs.

Dispute Resolution

Advisors manage FTA notices, appeals, and handle tax disputes professionally.

Documents for Tax Registration

01.1. Trade License

Active UAE business license for the current year from the issuing authority.

02.2. MOA/AOA & POA

Memorandum or Articles of Association, Power of Attorney, and any board resolution for signatory.

03.3. Owner IDs

Passport and Emirates ID for all owners, partners, and main authorized signatory.

04.4. Company Contact Details

Current phone, email, and registered Dubai/UAE office address for FTA communication.

05.5. Financial Statements

Latest audited or stamped financial statements showing revenue and expense breakdowns.

06.6. Business Address Proof

Utility bill, tenancy contract, or office lease to confirm legal place of business.

07.7. Ownership Structure

Chart, certificate or shareholding list explaining business owners/partners structure.

08.8. FTA Registration Evidence

VAT/TRN certificate or EmaraTax registration details, if already registered for other taxes.

Mainland vs. Free Zone vs. Offshore: Corporate Tax Comparison

Feature	Mainland	Free Zone (QFZP)	Offshore	Small Business
Tax Rate	9% over AED 375k	0% (qualifying)	0% (if exempt)	0% below AED 375k
Qualifying Income	All mainland income	Free zone & intl	No UAE trading	All income
Filing Duty	Annual return	Annual return	Annual if traded	Annual if taxable
Physical Office	Required	Required in FZ	Not allowed	Required
De Minimis Rule	N/A	Max 5% mainland	N/A	N/A
FTA Compliance	Mandatory	Mandatory	If profitable	Mandatory

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Work with qualified corporate tax consultants in Dubai who understand UAE tax law, free zone incentives, and FTA compliance requirements. We manage your tax from registration through annual filing, freeing your team to focus on business growth.

Our Services Include:

Corporate tax registration support
Review of taxable income and thresholds
Annual tax return preparation and filing
FTA audit and compliance assistance
Advisory on tax planning and structuring