What is UAE Corporate Tax?
UAE Corporate Tax is a federal tax on business profits introduced in June 2023, applying to companies and businesses operating in the United Arab Emirates. The tax is levied at a rate of 9% on taxable income above AED 375,000, with 0% tax on taxable income up to AED 375,000. The regime applies to most companies operating in UAE, though exemptions and reliefs are available for qualifying entities, including free zone companies meeting specific conditions and small businesses below revenue thresholds.
AURNÉ Private Advisory provides comprehensive UAE Corporate Tax compliance services, ensuring your business meets all Corporate Tax obligations while optimizing your tax position. Our services include Corporate Tax registration, tax residency certificates, transfer pricing compliance, free zone qualifying income assessment, small business relief, tax group registration, and quarterly and annual filing support.
Who Must Pay UAE Corporate Tax?
UAE Corporate Tax applies to:
- UAE Companies: All companies incorporated in UAE (mainland and free zones)
- Foreign Companies: Foreign companies with a permanent establishment in UAE
- Business Activities: Any person conducting business activities in UAE
- Taxable Income: Entities with taxable income exceeding exemption thresholds
Exemptions: Certain entities are exempt from Corporate Tax, including:
- Government entities and government-controlled entities
- Extraction businesses (subject to Emirate-level taxation)
- Qualifying public benefit entities
- Qualifying investment funds
- Public pension and social security funds
- Qualifying free zone persons (on qualifying income)
- Small businesses (below AED 3 million revenue threshold, if relief elected)
What is the Corporate Tax Rate?
UAE Corporate Tax rates are structured as follows:
- 0% Tax: Taxable income up to AED 375,000
- 9% Tax: Taxable income above AED 375,000
- 0% Tax (Free Zones): Qualifying free zone persons on qualifying income (subject to conditions)
- 0% Tax (Small Business): Small business relief for businesses below AED 3 million revenue (if elected)
The 9% rate applies to taxable income above the AED 375,000 threshold, making UAE one of the most competitive corporate tax jurisdictions globally. Qualifying free zone companies can benefit from 0% tax on qualifying income, subject to meeting specific conditions and substance requirements.
When Are Tax Returns Due?
Corporate Tax filing deadlines are:
- Annual Returns: 9 months after the end of the tax period (e.g., if tax period ends December 31, return due September 30)
- Tax Payment: Tax due must be paid by the filing deadline
- Quarterly Returns: May be required for certain entities or if tax liability exceeds thresholds
- Extensions: Extensions may be available in certain circumstances, subject to FTA approval
Late filing or payment can result in penalties and interest charges. Our team tracks all Corporate Tax deadlines and ensures timely preparation and filing of all returns, providing advance notice of upcoming deadlines.
What Are the Exemption Criteria?
Key exemption criteria include:
Free Zone Qualifying Income Exemption
- Must be a Qualifying Free Zone Person (QFZP)
- Must maintain adequate substance in UAE
- Income must be from qualifying activities
- Must not elect to be subject to Corporate Tax
- Must comply with transfer pricing requirements
- Non-qualifying income subject to standard 9% rate
Small Business Relief
- Revenue below AED 3 million per tax period
- Must elect for small business relief
- Available for tax periods starting on or after June 1, 2023
- Can be revoked in subsequent periods
- Not available if part of a tax group
- Relief applies to entire tax period
Other Exemptions
- Government entities and government-controlled entities
- Extraction businesses (subject to Emirate-level taxation)
- Qualifying public benefit entities
- Qualifying investment funds
- Public pension and social security funds
What is Free Zone Qualifying Income?
Free Zone Qualifying Income is income that qualifies for 0% Corporate Tax for Qualifying Free Zone Persons (QFZPs). To qualify:
- Qualifying Activities: Income must be from qualifying activities such as manufacturing, trading, services, holding companies, and others
- Substance Requirements: Must maintain adequate substance in UAE (employees, assets, operations)
- Compliance: Must comply with transfer pricing and other regulatory requirements
- Non-Qualifying Income: Income from non-qualifying activities is subject to standard 9% Corporate Tax
- Election: Can elect to be subject to standard Corporate Tax regime if preferred
We help assess whether your free zone company qualifies for the exemption, ensure compliance with all requirements, and optimize your tax position while maintaining eligibility.
How Do I Register for Corporate Tax?
Corporate Tax registration process:
Step 1: Determine Registration Requirement
Assess whether your entity is required to register for Corporate Tax. Registration is required if you have taxable income or don't qualify for exemptions. We conduct comprehensive assessments to determine registration requirements.
Step 2: Gather Required Information
Collect required information including company details, business activities, financial information, and supporting documentation. We provide complete checklists and assist with document preparation.
Step 3: Complete Registration Application
Complete the Corporate Tax registration application through the FTA portal, providing all required information and documentation. We handle the entire registration process on your behalf.
Step 4: Receive Tax Registration Number (TRN)
Upon approval, receive your Corporate Tax Registration Number (TRN) from the FTA. The TRN is required for all Corporate Tax filings and communications with the FTA.
What Are Transfer Pricing Requirements?
Transfer pricing requirements apply to related party transactions:
- Arm's Length Principle: Related party transactions must be at arm's length (market rates)
- Documentation: Transfer pricing documentation required for transactions exceeding thresholds
- Benchmarking: Comparability studies and benchmarking may be required
- Reporting: Transfer pricing information must be included in Corporate Tax returns
- Compliance: Must maintain adequate documentation to support transfer pricing positions
We provide comprehensive transfer pricing compliance services including documentation preparation, benchmarking studies, and ongoing compliance support to ensure all requirements are met.
What is Tax Group Registration?
Tax group registration allows related companies to file a single Corporate Tax return:
- Eligibility: Companies must meet specific criteria (common ownership, same financial year, etc.)
- Benefits: Consolidated filing, potential tax optimization, simplified compliance
- Requirements: Must elect for tax group treatment and meet all conditions
- Compliance: All group members must comply with Corporate Tax requirements
We assess eligibility for tax group registration and guide you through the registration process, ensuring all requirements are met and benefits are maximized.
Compliance Timeline and Checklist
Before Tax Period Starts
- Assess Corporate Tax registration requirements
- Complete Corporate Tax registration (if required)
- Assess eligibility for exemptions and reliefs
- Establish compliance framework and processes
During Tax Period
- Maintain proper accounting records
- Track taxable income and expenses
- Maintain transfer pricing documentation (if applicable)
- Monitor compliance with exemption conditions (if applicable)
- Prepare for quarterly returns (if required)
After Tax Period Ends
- Prepare financial statements
- Calculate taxable income and tax liability
- Prepare Corporate Tax return
- File return within 9 months of period end
- Pay tax due by filing deadline
- Maintain records for 7 years
Corporate Tax Calculator: Understanding Your Tax Liability
Understanding Corporate Tax liability calculation:
Example Calculation:
- Taxable Income: AED 1,000,000
- First AED 375,000: 0% tax = AED 0
- Remaining AED 625,000: 9% tax = AED 56,250
- Total Tax Liability: AED 56,250
Taxable income is calculated as total income minus allowable deductions and exemptions. We help calculate your tax liability accurately and identify opportunities to optimize your tax position.
Comprehensive UAE Corporate Tax Compliance
Why Professional Corporate Tax Compliance?
Professional Corporate Tax compliance provides numerous benefits:
- Compliance Assurance: Ensuring full compliance with Corporate Tax regulations
- Penalty Avoidance: Avoiding penalties through timely and accurate compliance
- Tax Optimization: Identifying exemptions and reliefs to optimize tax position
- Expert Guidance: Expert advice on complex Corporate Tax requirements
- Efficient Processing: Streamlined processes for registration and filing
- Ongoing Support: Continued compliance support and monitoring
Our Corporate Tax Compliance Services
Corporate Tax Registration
We assist with Corporate Tax registration with the Federal Tax Authority, ensuring all required information is provided and registration is completed correctly and on time.
Exemption Assessment
We assess eligibility for Corporate Tax exemptions including free zone qualifying income, small business relief, and other available exemptions and reliefs.
Transfer Pricing Compliance
We ensure compliance with transfer pricing requirements including documentation preparation, benchmarking studies, and arm's length principle compliance.
Tax Return Preparation & Filing
We prepare comprehensive Corporate Tax returns and ensure timely filing, coordinating tax payments and maintaining compliance with all filing requirements.
Why Choose AURNÉ for Corporate Tax Compliance?
Our Dubai-based team provides expert Corporate Tax compliance:
- Corporate Tax Expertise: Deep knowledge of UAE Corporate Tax regulations and requirements
- Exemption Knowledge: Understanding of exemptions, reliefs, and optimization opportunities
- Transfer Pricing Experience: Experience with transfer pricing compliance and documentation
- Efficient Processes: Streamlined processes ensuring timely compliance
- Ongoing Support: Continued compliance support and deadline monitoring
- Integrated Services: Coordination with accounting, audit, and other tax services