Corporate tax has applied to UAE businesses since financial years starting on or after 1 June 2023. For many companies the first filing cycle has now passed, and the question has shifted from “does this apply to us?” to “are our records and processes good enough?” This guide covers what a finance team should have in place.
Who is in scope
Most UAE companies and other legal entities fall within the regime, as do individuals running a business activity above the turnover threshold set by the Ministry of Finance. Free zone companies are in scope too. Some can benefit from a 0% rate on qualifying income, but only if they meet every condition of a Qualifying Free Zone Person, and they lose that treatment if they do not.
How the rates work
The standard structure is simple. Large multinational groups may face additional rules, including a domestic minimum top-up tax, so they should take separate advice.
| Taxable income | Rate |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
What to have in place
- Registration. Confirm the company is registered with the Federal Tax Authority and that the details on file are current.
- Reliable financial statements. Accounting profit is the starting point for taxable income, so the books need to be complete and prepared on a consistent basis.
- Adjustments. Some income is exempt and some expenses are restricted or not deductible. Someone needs to own that reconciliation each year.
- Related-party documentation. Transactions with connected parties should be at arm’s length and supported by evidence.
- Records. Keep supporting records for seven years after the end of the tax period.
- Filing calendar. The return and the payment are due within nine months of the end of the tax period.
Clean books through the year turn the tax return into a matter of adjusting, not reconstructing.
Gaps we see most often
- Bookkeeping that is several months behind when the return is due.
- Loans and charges between related companies with no written agreement.
- Free zone conditions that nobody is tracking during the year.
- No named owner for the filing deadline.
This article is general information, not tax advice. Rules and thresholds change, so confirm the details against current Federal Tax Authority guidance or speak to an adviser about your own position.