📌 Introduction
Corporate tax has officially become part of the UAE’s business landscape, including in Dubai—a city renowned for its tax-friendly policies.
With the implementation of Federal Decree-Law No. 47 of 2022, the UAE government has introduced a federal Corporate Tax (CT) regime to align with international standards and promote fiscal sustainability.
For businesses in Dubai, this shift brings both obligations and opportunities. Understanding the corporate tax system is now essential—not optional—for every business owner.
🧾 What Is Corporate Tax in Dubai?
Corporate tax is a direct tax levied on the net profits of corporations and other businesses. In Dubai, as part of the UAE, the tax is governed by the federal law and applies to both mainland and free zone companies (depending on income and eligibility).
Key Features:
- 9% tax rate on taxable profits exceeding AED 375,000
- 0% rate for taxable income up to AED 375,000 (to support small businesses)
- Special provisions for Free Zone Entities qualifying as QFZPs (Qualifying Free Zone Persons)
🧑💼 Who Is Subject to Corporate Tax in Dubai?
Corporate Tax applies to a wide range of businesses in Dubai, including:
- Mainland companies across all sectors
- Free zone companies earning non-qualifying income
- Branches of foreign companies operating in the UAE
- Freelancers and sole proprietors with commercial licenses
- Multinational companies subject to Pillar Two global minimum tax rules
Certain entities may be exempt, such as:
- Government bodies and regulated public entities
- Qualifying investment funds
- Charities and public benefit organizations (subject to approval)
✅ Key Compliance Requirements
To comply with Corporate Tax regulations in Dubai, businesses must:
- Register with the Federal Tax Authority (FTA) via the EmaraTax portal
- Maintain audited financial statements (depending on the turnover and license type)
- File annual tax returns within the prescribed deadlines
- Maintain transfer pricing documentation for transactions with related parties
- Pay the tax liability based on adjusted accounting profit
Non-compliance may lead to penalties, audits, and disqualification from certain tax benefits.
💼 How an Accounting Firm in Dubai Can Help
Partnering with a reputable accounting firm in Dubai can simplify your corporate tax journey. Services offered typically include:
- Corporate tax registration and planning
- Preparation of IFRS-compliant financials
- Assessment of Free Zone tax eligibility
- VAT and CT integration support
- Transfer pricing compliance (Master File and Local File)
- Representation in case of FTA audits
These services are especially critical for growing businesses navigating the new compliance landscape for the first time.
🚨 The Cost of Non-Compliance
The FTA has outlined administrative penalties for:
- Late registration
- Incorrect or missing tax returns
- Non-payment or underpayment of tax
- Failure to submit transfer pricing documents
Moreover, businesses may risk losing their 0% tax benefit in free zones if they don’t qualify or fail to segregate qualifying and non-qualifying income properly.
📢 Conclusion
Dubai’s introduction of corporate tax is a strategic move toward fiscal maturity and international compliance. While the new rules may seem daunting,
they also offer opportunities for structured growth, improved governance, and better access to capital markets.
With expert guidance from a professional auditing or accounting firm in Dubai, businesses can remain compliant, reduce tax risks,
and plan strategically for a more transparent future.
