Corporate Tax in the UAE has transitioned from concept to compliance. On 9 December 2022, the UAE Ministry of Finance released Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, marking the introduction of a unified Corporate Tax (CT) regime in the country.
Whether your business operates in the mainland or a UAE free zone, understanding and preparing for this shift is no longer optional — it’s mandatory.
What Is Corporate Tax in UAE?
Corporate Tax is a direct tax imposed on the net profits of corporations and businesses operating in the UAE.
- 9% Corporate Tax on taxable income exceeding AED 375,000
- 0% tax for taxable income up to AED 375,000 (supporting small businesses and startups)
- Free zone companies may continue to enjoy tax benefits if they meet the Qualifying Free Zone Person (QFZP) conditions
This move aligns the UAE with global tax standards while maintaining its reputation as a pro-business jurisdiction.
Who Is Subject to UAE Corporate Tax?
Corporate Tax in the UAE applies to:
- Mainland companies
- Free zone companies (if earning non-qualifying income)
- Branches of foreign companies
- Freelancers and individual establishments, if engaged in commercial activity
- Multinational entities, under Pillar Two of the OECD BEPS framework
Some entities — like government bodies, qualifying public benefit entities, and regulated investment funds — may be exempt, but these require professional assessment.
Key Compliance Steps for Businesses
To stay compliant with the UAE CT law, businesses must:
- Register for Corporate Tax with the Federal Tax Authority (FTA)
- Maintain audited financial statements (mandatory in many free zones and for larger companies)
- File corporate tax returns annually
- Calculate and pay tax based on net accounting profit, adjusted per UAE CT law
- Comply with transfer pricing regulations and submit relevant documentation
How an Accounting & Audit Firm Can Help
A reliable accounting firm in UAE or audit partner can assist with:
- Corporate Tax registration and advisory
- IFRS-compliant bookkeeping and financial statements
- Identifying deductible expenses and reliefs
- Evaluating Free Zone QFZP criteria
- Preparing for FTA audits and inspections
- Supporting transfer pricing documentation and intercompany reviews
If you’re unsure about how Corporate Tax affects your business structure or income sources, professional help is essential.
Non-Compliance Can Be Costly
The UAE has introduced administrative penalties for late registration, inaccurate filings, and non-payment. Moreover, companies may lose their Free Zone benefits if they fail to qualify or report non-qualifying income improperly.
An experienced audit or accounting firm can mitigate these risks by ensuring accuracy and adherence to the law.
Conclusion
UAE Corporate Tax marks a major regulatory transformation, but it also creates opportunities for better governance and long-term planning. Whether you’re a startup or an established entity, aligning with experienced professionals can help you navigate this change with confidence.
Need Corporate Tax Services in UAE?
AVS Lewis & Pecker Auditing offers expert corporate tax services in the UAE, including CT registration, tax planning, IFRS reporting, and compliance audits. Backed by our experienced team and in-depth knowledge of UAE tax law, we ensure your business stays compliant, efficient, and future-ready.
📞 Contact us today to schedule a consultation.
