Corporate Tax in UAE

The Ministry of Finance made an announcement in January 2022 stating that federal Corporate Tax (CT) would be implemented on the net profits of businesses. The tax was made applicable after June 1, 2023, that will be applicable throughout all the emirates in the United Arab Emirates.

A&A Associate LLC can help your company develop effective tax strategies to minimize tax liabilities and optimize your tax position. We can conduct tax planning, provide advice on tax incentives and exemptions, and assist with tax compliance to ensure your company meets all regulatory requirements.

Yes, A&A Associate LLC has experience in handling tax audits and disputes. We can represent your company during tax audits, assist with preparing necessary documentation, and provide guidance on resolving tax disputes in an efficient manner.

To engage A&A Associate LLC for corporate tax in UAE and Dubai, you can contact us through our website or reach out to our office directly. We will guide you through the process and provide the necessary assistance tailored to your company’s tax needs.

Yes, Corporate Tax Returns filing are mandatory for all companies depending on the specific taxes applicable to your business activities. A&A Associate LLC can guide you on the necessary tax filings for your company.

The FTA is the government body that takes care of administering, collecting, and enforcing federal taxes in the UAE, including VAT and excise tax. It also provides guidance and support to taxpayers and ensures compliance with tax laws.

Does a company with profit below AED 375,000 still need to register for corporate tax? Yes. Registration is mandatory for all taxable persons regardless of income level. The AED 375,000 threshold only determines whether tax is payable at 0% or 9%, not whether registration applies. Failure to register for corporate tax incurs AED 10,000 in penalties.

Sole proprietors and freelancers with a commercial licence conducting business activities in the UAE may be covered if their business revenue exceeds FTA thresholds. These natural persons must evaluate their status and register if they meet the criteria for being a taxable person.

Free zone persons are within scope of corporate tax. Those meeting QFZP conditions pay 0% on qualifying income and 9% on non-qualifying income. Free zone entities that don’t qualify pay 9% on all taxable income, just like mainland businesses.

Returns must be filed within 9 months after your financial year ends. If your first tax period ends 31 December 2024, your return is due by 30 September 2025. The deadline applies to both filing and payment of any tax due.

Eligible resident taxable persons with revenue not exceeding AED 3 million can elect to be treated as having no taxable income for qualifying periods through 31 December 2026. You must make this election on your return, and accepting relief means forfeiting loss carry-forward benefits for those periods.

Late registration carries an AED 10,000 penalty. Late filing incurs AED 500 monthly for the first 12 months, rising to AED 1,000 monthly thereafter. Late payment attracts 14% annual interest compounded monthly. These penalties accumulate, making timely compliance far more cost-effective.

All three regimes can apply simultaneously to the same business with different tests and separate filings. VAT applies to supplies of goods and services, ESR requires substance for relevant activities, and corporate tax applies to profits. Each has distinct compliance requirements that must be managed in parallel.

Professional guidance becomes particularly valuable for complex group structures, cross-border transactions, high-value free zone activities, transfer pricing arrangements, and any situation where classification or relief eligibility is uncertain. The cost of advice typically pales compared to penalties for non-compliance or missed optimization opportunities.