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Tax & compliance

The UAE stopped being a place with no filing dates.

Corporate tax, VAT, economic substance, beneficial ownership, anti-money-laundering. Five separate regimes, five separate deadlines, and penalties that accrue whether or not you owe anything.

9% above AED 375,000 0% on qualifying free zone income Registration is mandatory regardless of profit

Corporate tax

Nine per cent, and the exemption that is not automatic.

Federal corporate tax applies to financial years beginning on or after 1 June 2023. The rate is 9% on taxable profit above AED 375,000, and 0% below it. Registration with the Federal Tax Authority is mandatory for every taxable person, including companies that make no profit and companies that expect to qualify for the free zone rate. Late registration carries an administrative penalty on its own.

The free zone position is where most of the confusion sits. A Qualifying Free Zone Person can be taxed at 0% — but only on qualifying income, and only while it satisfies conditions that are tested, not assumed.

A decision tree for the free zone zero per cent rate. Are you in a free zone, do you maintain adequate substance, is the income a qualifying activity, and is non-qualifying revenue within the de minimis threshold. Failing any test moves the whole company to nine per cent. In a free zone? licensed, not just addressed Adequate substance? people, premises, decisions here Qualifying activity? on the prescribed list Non-qualifying revenue within the de minimis limit? 0% on qualifying income tested every year, not granted once 9% above AED 375,000 on all of it, not just the failing part Fail any test and the whole company falls to the standard rate — for that year and, in most cases, for the four that follow.
The 0% rate is a status you hold by continuing to satisfy it. The cost of losing it is not marginal — it applies to everything.
A free zone company with no staff, no office anyone works in and decisions taken from another country does not have substance, whatever its licence says. That is the test, and it is the one most likely to be failed by structures sold on price.

Everything else

Four more regimes, four more dates.

VAT
5%. Registration is compulsory once taxable supplies pass the mandatory threshold in a rolling twelve months, and voluntary above a lower one. Returns are quarterly or monthly depending on size. Late filing penalties escalate with repetition.
Economic Substance
Applies to companies carrying on a Relevant Activity — distribution, headquarters, holding, IP, shipping, finance and others. A notification first, then a full report if the activity generates income. Filing nothing when you should have is penalised even where the substance itself was fine.
Ultimate Beneficial Owner
A register of the natural persons who ultimately own or control the company, filed with the licensing authority and kept current. Changes must be notified within a set window, and most companies forget when shareholding moves.
AML / CFT
If you are a Designated Non-Financial Business or Profession — real estate brokers, dealers in precious metals and stones, auditors, corporate service providers — you carry your own obligations: registration on the national system, a compliance officer, and suspicious transaction reporting.
Transfer pricing
Transactions between related parties must be at arm's length and documented. If you have a holding company and an operating company, this applies to you.

None of these are difficult. All of them have dates, and the penalties attach to the missed date rather than to any underpaid tax — which is why companies that owe nothing still get fined.

Accounting & audit

Books that hold up when somebody reads them.

Corporate tax made bookkeeping compulsory in substance as well as in law. You cannot compute taxable profit without records, and the FTA can require them going back years. Most free zones now also require audited financial statements at licence renewal — meaning your accounts stopped being an internal matter and became a condition of continuing to trade.

We keep books monthly rather than reconstructing them in a panic each March, prepare IFRS-compliant statements, coordinate the audit with a registered firm, and run payroll through the Wage Protection System where the company has employees on the mainland.

The cheapest year of bookkeeping is the one you do as you go. The most expensive is the one an auditor reconstructs from a folder of receipts three weeks before a renewal deadline.

Tax & compliance

Corporate tax, VAT, and the four regimes behind them.

Registration deadlines, qualifying free zone status, Small Business Relief and its end date, VAT mechanics, ESR, UBO and goAML — each with the penalty for getting it wrong stated plainly.

Corporate tax

Registration is mandatory for dormant and loss-making companies too, and the AED 10,000 penalty has been levied on companies with no revenue at all. The urgent item here is Small Business Relief, which ends for tax periods after 31 December 2026.

Corporate tax registration, deadlines and penaltiesCorporate taxSmall Business Relief — and what happens when it endsEnds 31 Dec 2026Qualifying Free Zone Person — the 0% rate and its conditionsCorporate taxTax groups and how they workCorporate taxTransfer pricing and related party transactionsCorporate taxWho is exempt from UAE corporate taxCorporate taxCorporate tax deregistrationCorporate taxCorporate tax penalties, and how to get them waivedPenalties

VAT

Thresholds, returns, imports and the two distinctions that cost the most money — zero-rated against exempt, and designated zone against ordinary free zone.

VAT registration thresholds and timingVATVAT returns, deadlines and paymentVATReverse charge and import VATVATVAT and designated zonesVATZero-rated exports and services to overseas clientsVATCorrecting a VAT error — voluntary disclosureVATVAT deregistrationVATExcise tax — who it actually applies toOther regimes

The other regimes

ESR, UBO and goAML apply to companies that never think about them — holding vehicles, brokerages and metals traders in particular. The last two matter only to groups above EUR 750 million.

Economic Substance RegulationsOther regimesUltimate beneficial ownership filingOther regimesgoAML registration and AML obligationsOther regimesTax residency certificates — the conditionsOther regimesThe 15% Domestic Minimum Top-up TaxMultinationalsCountry-by-country reportingMultinationals

Accounting and audit

Corporate tax made proper accounting compulsory rather than advisable, and made the audit load-bearing for any free zone company relying on the 0% rate.

Bookkeeping and accounting requirementsAccountingWho actually needs an auditAccountingChoosing a financial year endAccountingRecord keeping and retention periodsAccountingWhat happens in an FTA auditAccounting

All 27 pages on tax & compliance

Rates, thresholds and deadlines on this page reflect the position as published at the time of writing. Tax law in the UAE is young and moving. Nothing here is tax advice for your specific circumstances — it is what we would tell you on the phone before recommending you speak to a registered tax agent about the details.

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