UAE corporate tax is here to stay. Whether you pay 0% as a Qualifying Free Zone Person or 9% on mainland income, every UAE business must register and file an annual return. The system is still relatively new — many entrepreneurs are filing for the first time in 2025–2026. This guide walks you through the entire process.
Corporate Tax Basics
| Item | Details |
|---|---|
| Standard rate | 9% on taxable income above AED 375,000 |
| Small business relief | 0% if revenue < AED 3 million (mainland SMEs) |
| Free zone rate (QFZP) | 0% on qualifying income |
| Free zone rate (non-qualifying) | 9% on non-qualifying income above AED 375,000 |
| Tax period | Financial year (usually 12 months) |
| Filing deadline | Within 9 months of financial year-end |
| Payment deadline | Within 9 months of financial year-end |
Step 1: Register for Corporate Tax
Every UAE business entity must register for corporate tax with the Federal Tax Authority (FTA), even if you expect to pay AED 0.
Who Must Register
- All UAE incorporated companies (free zone — such as DIFC or ADGM — and mainland)
- All UAE branches of foreign companies
- Partnerships that elect to be treated as taxable persons
- Natural persons with UAE business income exceeding AED 1 million
How to Register
- Log into the EmaraTax portal (tax.gov.ae)
- Select "Corporate Tax Registration"
- Provide:
- Trade license details
- Financial year dates
- Business activity description
- Ownership/UBO information
- Contact details of the authorized representative
- Upload supporting documents (trade license, passport, Emirates ID)
- Submit and wait for approval (5–20 business days)
- Receive your Corporate Tax Registration Number (CTRN)
Cost: Free Deadline: Within 3 months of incorporation or the start of the relevant tax period
Step 2: Maintain Proper Records
Before you can file, you need proper books:
Records to Maintain
| Record Type | Details | Retention |
|---|---|---|
| Financial statements | P&L, balance sheet, cash flow | 7 years |
| Tax invoices | All sales and purchase invoices | 7 years |
| Bank statements | All business accounts | 7 years |
| Contracts | Client and supplier agreements | 7 years |
| Payroll records | Salary details, WPS records | 7 years |
| Corporate documents | MOA, board minutes, shareholder resolutions | 7 years |
| Transfer pricing documentation | If related-party transactions exist | 7 years |
The retention period increased from 5 years (VAT) to 7 years for corporate tax purposes.
Step 3: Prepare Your Tax Return
Calculate Taxable Income
Taxable income starts with your accounting profit and is adjusted:
| Step | Description |
|---|---|
| Accounting profit | Revenue minus expenses per financial statements |
| + Non-deductible expenses | Add back entertainment, penalties, non-business expenses |
| - Exempt income | Subtract qualifying dividends, capital gains |
| - Reliefs | Subtract small business relief, transfer of losses |
| = Taxable income | The amount subject to corporate tax |
Key Deductions
Deductible expenses:
- Salaries and employee benefits
- Office rent
- Professional fees (accounting, legal, consulting)
- Marketing and advertising
- Travel (business-related)
- Depreciation of business assets
- Interest on business loans (subject to limitations)
Non-deductible expenses:
- Fines and penalties from government authorities
- Donations (except to approved charities — AED deduction capped)
- Personal expenses of shareholders
- Entertainment expenses (50% deductible, 50% non-deductible)
- Bribes and illegal payments
- Corporate tax itself
Interest Deduction Limitation
Net interest expenditure is limited to 30% of EBITDA. This mainly affects highly leveraged businesses.
Step 4: File the Tax Return
Filing Through EmaraTax
- Log into EmaraTax portal
- Navigate to "Corporate Tax Returns"
- Select the relevant tax period
- Complete the return form:
- Revenue details
- Expense details
- Adjustments (non-deductible, exempt income)
- Reliefs claimed (QFZP, small business)
- Related-party transactions (TP Disclosure Form)
- Tax calculation
- Upload supporting documents (audited financial statements if required)
- Review and submit
Supporting Documents to Upload
| Document | When Required |
|---|---|
| Audited financial statements | QFZP claimants, groups > AED 50M revenue |
| TP Disclosure Form | Anyone with related-party transactions |
| Small Business Relief election | Revenue < AED 3M (if electing) |
| Tax loss carry-forward schedule | If carrying forward prior year losses |
Step 5: Pay Your Tax
Payment Methods
- Bank transfer to the FTA's designated account
- Through the EmaraTax portal (online payment)
- Via authorized exchange houses
Payment Deadline
Same as the filing deadline: within 9 months of the end of the relevant tax period.
Deadlines Calendar
| Financial Year-End | Registration Deadline | Filing Deadline | Payment Deadline |
|---|---|---|---|
| December 31, 2025 | Already passed | September 30, 2026 | September 30, 2026 |
| March 31, 2026 | Already passed | December 31, 2026 | December 31, 2026 |
| June 30, 2026 | Already passed | March 31, 2027 | March 31, 2027 |
Special Rules for Free Zone Companies\n\nWhether you are registered in JAFZA, DMCC, or SHAMS, the same corporate tax rules apply to all free zone entities.
Claiming QFZP Status
In your tax return, you elect QFZP status by:
- Identifying your income as qualifying or non-qualifying
- Demonstrating compliance with QFZP conditions
- Attaching audited financial statements
- Completing the TP Disclosure Form (if related-party transactions)
Split Reporting
Free zone companies with both qualifying and non-qualifying income must report separately:
| Income Category | Tax Rate | How to Report |
|---|---|---|
| Qualifying income | 0% | Separate line in tax return |
| Non-qualifying income (first AED 375K) | 0% | Separate line |
| Non-qualifying income (above AED 375K) | 9% | Taxable amount |
Audit Requirement
QFZP claimants must attach audited financial statements prepared under IFRS. Without the audit, QFZP status cannot be claimed.
Small Business Relief (SBR)
Mainland companies (and free zone companies not claiming QFZP) with revenue under AED 3 million can elect Small Business Relief:
- Taxable income treated as AED 0 (no tax payable)
- Simplified compliance (no audited statements required)
- Still must register and file a return
- Available for tax periods starting before January 1, 2027
Important: SBR is an election — you must actively choose it in your tax return. It is not automatic.
Tax Losses
If your business makes a loss:
- Losses can be carried forward to offset future taxable income
- Maximum offset: 75% of taxable income in any future period
- No time limit on carrying forward losses
- Losses cannot be carried back to prior periods
- Losses from one entity cannot offset profits of another entity (no group relief in most cases)
Penalties
| Violation | Penalty (AED) |
|---|---|
| Late registration | 10,000 |
| Late filing | 500/month (capped at 10,000) |
| Late payment | Varies (percentage-based) |
| Inaccurate return | 1–3x the under-reported tax |
| Failure to maintain records | 10,000 (first), 20,000 (repeat) |
| Failure to notify FTA of changes | 1,000–5,000 |
Filing Costs
| Approach | Cost (AED) | Best For |
|---|---|---|
| Self-filing (EmaraTax) | Free | Simple businesses with basic bookkeeping |
| Tax agent / accountant | 2,000–10,000 | Most SMEs |
| Big Four / major firm | 10,000–50,000+ | Complex structures, multinational groups |
| Bundled service (audit + tax + bookkeeping) | 8,000–25,000 | Free zone QFZP companies |
For most free zone SMEs (whether in DMCC, IFZA, or RAKEZ), a bundled service covering bookkeeping, audit, and tax filing costs AED 10,000–20,000/year.
Practical Timeline for Filing
| When | Action |
|---|---|
| Month 1–3 after year-end | Close books, prepare financial statements |
| Month 3–5 | Engage auditor, begin audit |
| Month 5–7 | Complete audit, prepare tax return |
| Month 7–8 | Review and submit tax return |
| Month 8–9 | Pay any tax due |
| Deadline: Month 9 | Filing and payment due |
Pro tip: Start early. Auditors are busiest in Q1. If your year-end is December, engage your auditor by October for the best rates and fastest turnaround.
Common Mistakes
1. Not registering at all. Even if you owe AED 0 in tax, registration is mandatory. Late registration penalty: AED 10,000.
2. Missing the 9-month deadline. Unlike VAT (quarterly), corporate tax is annual — but the deadline sneaks up. Set a calendar reminder 3 months before.
3. Not electing SBR or QFZP. These are elections you must make in your tax return. If you do not actively claim them, you are taxed at the standard 9% rate.
4. Forgetting the TP Disclosure Form. If you have any related-party transactions, this form is part of your tax return. Missing it can trigger penalties and FTA scrutiny.
5. Not maintaining records for 7 years. The retention period for corporate tax records is 7 years, not 5 (which is the VAT retention period). Do not destroy records too early.
Next Steps
- Register for corporate tax — if you have not already, do it immediately
- Determine your status — QFZP, SBR, or standard 9%?
- Set up bookkeeping — see our bookkeeping guide
- Engage a tax advisor — especially for first-time filing
- Read related guides: Free zone tax exemptions, transfer pricing, annual audit
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