- 9% Corporate Tax applies strictly to net taxable profits exceeding AED 375,000.
- Small Business Relief (SBR) offers 0% tax for UAE businesses with annual revenue below AED 3,000,000.
- Mandatory Tax Registration (TRN) is required for all DED Mainland & Freezone Companies.
1. Executive Overview
The UAE Federal Tax Authority (FTA) enforced Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, providing a competitive framework while aligning with international OECD anti-base erosion guidelines.
All legal entities operating in Dubai, Abu Dhabi, and the wider Emirates must register for corporate tax and maintain audited financial statements.
2. Tax Rates & Exemptions
The tax rate structure is designed to foster SME growth while taxing larger corporate profits:
| Taxable Profit Bracket | Applicable Tax Rate |
|---|---|
| Up to AED 375,000 | 0% (Exempt) |
| Above AED 375,000 | 9% Standard Tax Rate |
3. Free Zone Qualifying Income
Free Zone Persons (FZPs) can benefit from a 0% tax rate on "Qualifying Income" derived from transactions with foreign entities or other Free Zone companies, provided they maintain adequate economic substance and audited books.
4. Filing Timelines & Fines
Tax returns must be filed, and due taxes paid, within 9 months following the end of the relevant Tax Period. Late registration penalties of AED 10,000 apply for non-compliance.
5. Action Steps for Business Owners
To avoid non-compliance fines, complete these three immediate steps:
- Obtain your FTA Tax Registration Number (TRN) through EmaraTax portal.
- Setup FTA-compliant chart of accounts and accounting software.
- Conduct a transfer pricing audit for related-party contracts.