Corporate Tax in the UAE: Eligibility, Registration, and Compliance Guide
The introduction of Corporate Tax (CT) in the UAE represents a significant development in the country’s fiscal landscape. Businesses operating in the UAE must understand eligibility criteria, registration processes, and compliance requirements to avoid penalties and ensure strategic tax planning. Properly managing corporate tax obligations also supports governance, transparency, and long-term financial sustainability.
Who is Subject to Corporate Tax
Corporate Tax applies to UAE-based businesses and foreign entities earning income in the UAE, with certain exemptions for small businesses and qualifying free zone entities. Key points include:
- Taxable Entities: All UAE-incorporated businesses, branches of foreign companies, and certain partnerships.
- Exemptions: Businesses with annual taxable income below AED 375,000 are generally exempt. Free zone businesses meeting specific regulatory and operational conditions may also benefit from preferential tax treatment.
- Scope: Income earned from business activities, investment returns, and other taxable sources are subject to CT.
Understanding eligibility is crucial for planning and avoiding unintentional non-compliance.
Corporate Tax Registration
Businesses liable for CT must register with the Federal Tax Authority (FTA). The process involves:
- Submitting business and legal documentation
- Providing financial statements demonstrating taxable income
- Designating a tax representative if required for foreign entities
Early registration ensures timely filing and reduces the risk of penalties or interest charges.
Filing Corporate Tax Returns and Payments
Registered entities must file annual Corporate Tax returns detailing:
- Total income and allowable deductions
- Taxable profit
- Applicable CT rate (currently 9% for most taxable income above the exemption threshold)
Payments are generally due after filing. Maintaining accurate accounting records, supporting documentation, and timely reporting is critical for co
