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How to File Corporate Tax in the UAE for Businesses and Free Zones
When the UAE introduced Corporate Tax in the UAE, it marked a big change for businesses across the country. Now, every company—whether on the mainland or in a free zone—must follow the new tax rules set by the Federal Tax Authority (FTA).
If you’re unsure where to start, don’t worry. This guide walks you through the entire process of filing your corporate tax from registration to payment—so you can stay compliant and avoid penalties.
What Is Corporate Tax in the UAE?
Corporate Tax in the UAE is a federal tax applied to the net profits of businesses. It officially came into effect on June 1, 2023, as part of the UAE’s efforts to align with international tax standards while continuing to attract investors and entrepreneurs.
Here’s a quick breakdown of how it works:
The standard tax rate is 9% on taxable income above AED 375,000.
Profits below AED 375,000 are tax-free (0%), which helps support small businesses and startups.
Free Zone companies can still enjoy a 0% rate on qualifying income, but they must meet certain FTA conditions to remain eligible.
Who Needs to File Corporate Tax in the UAE?
Not every entity has to pay corporate tax, but most active businesses do. You need to file Corporate Tax in the UAE if your company falls under one of these categories:
UAE-based companies and other registered entities (like LLCs, PSCs, PJSCs, etc.)
Foreign companies with a permanent establishment in the UAE
Individuals running licensed commercial or professional activities
Entities Exempt from Corporate TaxSome organizations are exempt, including:
Government bodies and government-controlled companies
Approved public benefit organizations
Pension and investment funds
Companies engaged in natural resource extraction (regulated at the Emirate level)
Step-by-Step Guide to Filing Corporate Tax in the UAE
Step 1: Register for Corporate TaxEvery taxable business must register through the FTA’s online portal (https://tax.gov.ae) to get a Corporate Tax Registration Number (TRN).
You’ll need to submit:
Your trade license
The owner’s Emirates ID and passport
Financial or business details
Once approved, you’ll receive your TRN, which you’ll use for all tax filings and correspondence.
Step 2: Keep Accurate Financial Records
Businesses are required to maintain proper accounting records in line with IFRS (International Financial Reporting Standards).
Your records should include:
Income statements
Balance sheets
Invoices and receipts
Keep all records for at least seven years after the end of each financial period. These documents will be essential in case of audits or FTA reviews.
Step 3: Calculate Your Taxable Income
To calculate Corporate Tax in the UAE, start with your net profit from your financial statements, then make adjustments for exempt income and non-deductible expenses.
Tax Rates:
0% on income up to AED 375,000
9% on income above that threshold
Example:If your business makes AED 600,000 in taxable income:
0% on the first AED 375,000 = AED 0
9% on the remaining AED 225,000 = AED 20,250Total Corporate Tax Payable = AED 20,250
Step 4: File Your Corporate Tax Return
You’ll need to file a Corporate Tax return once a year. The deadline is within nine months after the end of your financial year.
Example:If your financial year ends on December 31, 2024, your tax return must be filed by September 30, 2025.
When submitting your return via the FTA portal, include:
Audited financial statements
Tax computation summary
Completed Corporate Tax declaration form
Step 5: Pay the Corporate Tax
After submitting your tax return, you must pay the Corporate Tax electronically through the FTA e-Services portal.Make sure to pay before the deadline to avoid penalties and late fees.
Corporate Tax Rules for Free Zone Businesses
Free Zone companies can still benefit from 0% tax on qualifying income, provided they:
Maintain real business activity (substance) within the UAE
Follow transfer pricing regulations
Avoid doing business directly with the UAE mainland
If a Free Zone company earns non-qualifying income (such as revenue from mainland transactions), that portion will be taxed at the standard 9% rate.
Penalties for Not Complying
Missing deadlines or failing to comply with Corporate Tax in the UAE can lead to:
Administrative fines for late registration, filing, or payment
Loss of Free Zone tax benefits
Legal action for serious or deliberate violations
To avoid these issues, make sure your filings and payments are done on time.
Final ThoughtsFiling Corporate Tax in the UAE doesn’t have to be complicated. By registering early, keeping accurate records, and filing on time through the Federal Tax Authority, you’ll stay compliant and avoid unnecessary penalties.