Introduction to UAE Corporate Tax: A New Era for Businesses

In 2023, the UAE introduced a corporate tax system that reshaped its economic landscape. Once celebrated as a tax haven, the UAE now aligns with international tax standards to enhance transparency and foster long-term growth. This shift offers new opportunities—and responsibilities—for entrepreneurs and companies operating within the country.

Let’s explore how UAE corporate tax affects your business and how you can turn compliance into a competitive edge.

What is Corporate Tax in the UAE?

Corporate tax is a direct tax on a company’s net profits—the amount left after deducting operating expenses. In simple terms, it’s the share of your business earnings that goes to the government.

Implemented in June 2023, corporate tax in UAE 2023 aims to support public services while encouraging responsible financial reporting and international alignment.

UAE Corporate Tax Rates Explained

Corporate Tax Structure in the UAE

The UAE offers a straightforward and business-friendly tax structure, consisting of two primary tiers:

• 0% Tax Rate: For taxable income up to AED 375,000, supporting micro, small, and startup businesses.
• 9% Tax Rate: For taxable income exceeding AED 375,000, offering a low flat rate compared to global norms.

✅ Tax Calculation Example:

If your business earns AED 500,000 in taxable income:

The first AED 375,000 is taxed at 0%

The remaining AED 125,000 is taxed at 9%

Total tax = AED 11,250

This simple tiered system ensures small businesses aren’t burdened while encouraging compliance from larger firms.

Who Is Subject to Corporate Tax?

Corporate tax applies to various entities, including:

1. UAE Resident Companies

Any business incorporated in the UAE, including mainland and Free Zone companies.

• Mainland Companies: Registered and operating within the UAE.

• Free Zone Entities: Depending on eligibility for 0% tax.

2. Foreign Businesses

Only if they earn UAE-sourced income or have a permanent establishment in the country.

3. Natural Persons

Individuals conducting business activities under a commercial license may also be liable.

Free Zones and Corporate Tax: A Strategic Advantage

Entities in UAE Free Zones can still benefit from a 0% corporate tax rate—but only if they qualify as “Qualifying Free Zone Persons.”

Eligibility Criteria:

• Adequate Economic Substance: Real, substantial operations in the UAE.
• Qualifying Income: Revenue generated from specific eligible activities.
• Transfer Pricing Compliance: Must comply with relevant rules and documentation standards.

Free Zones continue to provide attractive tax incentives, making them a strategic choice for international and local businesses.

Key Exemptions and Special Cases

Certain organizations are fully exempt from corporate tax:

• Government entities
• Wholly government-owned companies
• Public benefit entities (charities)
• Investment funds (meeting regulatory conditions)

These exemptions ensure that public welfare and essential services remain unaffected by the new tax framework.

Corporate Tax Registration Process

All taxable persons—regardless of whether they meet the AED 375,000 income threshold—must register for corporate tax with the Federal Tax Authority (FTA).

How to Register:

• Visit the eServices Portal on the FTA website.
• Create or log in to your EmaraTax account.
• Submit the corporate tax registration form with all required documentation.
• Wait for approval and obtain your Corporate Tax Registration Number (TRN).

Need help with registration?

At Theta 7, we offer professional corporate tax registration services at a competitive fee. We handle the entire process on your behalf—ensuring it's done accurately, efficiently, and on time.

Whether you're a small business or a multinational firm, Theta 7 simplifies the process so you can stay compliant with minimal stress.

Filing Corporate Tax Returns

Registered entities are required to file an annual corporate tax return and pay any tax due within 9 months from the end of their financial year.

🗓️ Example:

If your financial year ends on December 31, your return and payment are due by September 30 of the following year.

✅ Filing Checklist:

• Prepare audited or reviewed financial statements

• Ensure transfer pricing documentation is ready, if applicable

• Review income, deductions, and exemptions accurately

• File the return via the FTA’s eServices platform

Late filings or payments can incur penalties, so it's important to stay on top of deadlines.

Need Expert Assistance?

At Theta 7 Accountants, we offer comprehensive accounting and auditing services to support your corporate tax obligations. Our services include:

• Preparation of Financial Statements: Ensuring accuracy and compliance with UAE regulations.

• Tax Return Filing: Managing the entire filing process through the FTA’s eServices platform.

• Registered Auditing Services: As registered auditors in the UAE, we conduct statutory external audits to meet regulatory requirements.

• Ongoing Accounting Support: Providing continuous support to keep your financial records in order.

Our team is dedicated to helping your business navigate the complexities of corporate taxation in the UAE. Contact us today to learn more about how we can assist you.

Ready to Stay Compliant and Stress-Free? Partner with Theta 7 Today

Navigating the UAE’s corporate tax landscape doesn’t have to be overwhelming. Whether you need help with corporate tax registration, filing returns, auditing, or full-scale accounting support, Theta 7 Accountants has you covered.

With our expert team, tailored solutions, and FTA-compliant services, we simplify the process—so you can focus on growing your business.

👉 Contact us today to schedule a consultation and ensure your business is fully compliant, tax-efficient, and audit-ready.
🔗 Visit our website | 📞 +971506098543| ✉️ support@theta7.ae

Your success is our business. Let’s make tax work for you.