The Corporate Tax in UAE, introduced in 2023, marks a significant shift in the country’s tax landscape, aligning with global standards while maintaining its appeal as a business hub. At Buraqs CNP Consultants, based in Hor Al Anz, Dubai, we assist clients from the UK, USA, Germany, France, and beyond to navigate this regime seamlessly. This 2025 guide explains the UAE corporate tax system, including rates, exemptions, compliance requirements, and benefits, ensuring your business thrives in Dubai’s dynamic economy.

What is Corporate Tax in UAE?

Corporate Tax (CT) in the UAE is a federal direct tax levied on the net income or profits of corporations and businesses, governed by Federal Decree-Law No. 47 of 2022, effective for financial years starting on or after 1 June 2023. Administered by the Federal Tax Authority (FTA), it applies a standard rate of 9% on taxable income above AED 375,000, with a 0% rate for income below this threshold to support small businesses. 

The UAE also introduced a Domestic Minimum Top-up Tax (DMTT) of 15% for multinational enterprises (MNEs) with global revenues of EUR 750 million or more, effective from 1 January 2025, aligning with the OECD’s Pillar Two framework.

Designed to meet international tax transparency standards, the UAE CT regime minimizes compliance burdens while diversifying government revenue away from oil. In 2024, over 90% of UAE businesses registered for CT, reflecting its widespread adoption. Buraqs CNP Consultants provides expert guidance to ensure your UAE tax compliance.

Types of Corporate Tax in the UAE

The UAE corporate tax system includes various categories based on business type and income. Key types include:

1. Standard Corporate Tax: 9% on taxable income above AED 375,000 for resident and non-resident businesses with a permanent establishment (PE) in the UAE.
2. Zero-Rate Tax: 0% on taxable income up to AED 375,000, supporting startups and SMEs.
3. Domestic Minimum Top-up Tax (DMTT): 15% for MNEs with global revenues of EUR 750 million or more in at least two of the four preceding financial years, effective from 1 January 2025.
4. Qualifying Free Zone Person (QFZP) Tax: 0% on qualifying income for free zone entities meeting specific conditions, with non-qualifying income taxed at 9%.
5. Withholding Tax: 0% on cross-border payments (e.g., dividends, interest, royalties), benefiting non-residents without a UAE PE.

Our Dubai company formation consultancy at Buraqs CNP Consultants helps businesses understand and leverage these tax categories.

Requirements for Corporate Tax in UAE

To comply with Corporate Tax in the UAE, businesses must meet registration and filing requirements. Key requirements include:

• Tax Registration: All taxable persons (resident entities, non-residents with a UAE PE, or those earning UAE-sourced income) must register with the FTA and obtain a Corporate Tax Registration Number.
• Financial Statements: Standalone financial statements prepared under International Financial Reporting Standards (IFRS), with accounting net profit as the starting point for taxable income.
• Documentation: Passport copies of shareholders/directors, trade license, Memorandum of Association (MOA), and proof of UAE presence (e.g., Ejari, office address).
• Transfer Pricing Documentation: Compliance with Arm’s Length Principles for transactions with related parties, mandatory for all taxable persons.
• Revenue Records: For small business relief, proof of revenue below AED 3 million for the current and previous tax periods (available until 31 December 2026).

Buraqs CNP Consultants ensures all documentation is accurate and submitted on time to avoid penalties, such as AED 10,000 for late registration.

How to Comply with Corporate Tax in UAE

Complying with Corporate Tax in UAE is streamlined with Buraqs CNP Consultants’ expert support. Here’s the step-by-step process:

• Assess Tax Status: Determine if your business is a taxable person (resident, non-resident with PE, or QFZP) or exempt (e.g., government entities). Consult our Dubai team for clarity.
• Register with FTA: Submit a corporate tax registration application via the FTA’s EmaraTax portal within the designated deadline to avoid a AED 10,000 penalty.
• Prepare Financials: Maintain IFRS-compliant financial statements, adjusting accounting net profit for non-deductible expenses (e.g., client entertainment) and exemptions (e.g., dividends).
• File Tax Return: Submit an annual corporate tax return within nine months from the end of the tax period. Small businesses eligible for relief can file a simplified return.
• Pay Taxes: Settle any tax liability via the EmaraTax portal or authorized channels. Foreign tax credits are available for taxes paid on UAE taxable income.
• Maintain Records: Keep transfer pricing documentation and revenue records for FTA audits, ensuring compliance with Arm’s Length Principles.

Our UAE tax compliance consultancy leverages FTA partnerships to expedite registration and filing, minimizing compliance burdens.

Exemptions and Incentives for Corporate Tax in UAE

The UAE CT regime offers several exemptions and incentives to support businesses, as outlined below:

1. Exempt Persons: Government entities, government-controlled entities, extractive businesses, non-extractive natural resource businesses, qualifying public benefit entities, and certain pension funds are exempt, subject to conditions.
2. Small Business Relief: Businesses with revenues below AED 3 million per tax period (until 31 December 2026) are treated as having no taxable income, with simplified compliance.
3. Qualifying Free Zone Persons (QFZPs): Free zone entities with adequate substance and qualifying income (e.g., trading with non-free zone entities) benefit from a 0% tax rate on qualifying income.
4. Dividend and Capital Gains Exemption: Dividends and capital gains from qualifying shareholdings (at least 5% ownership for 12 months) are exempt, supporting holding companies.
5. Intra-Group Transactions: Qualifying intra-group transfers and reorganizations are exempt from CT, provided conditions are met.
6. Foreign PE Exemption: Income from a foreign permanent establishment taxed at 9% or higher abroad can be exempt in the UAE, avoiding double taxation.
7. Proposed Incentives: Potential R&D tax credits (30%-50% refundable) and high-value employment credits are under consideration for 2026 and 2025, respectively.

Recent expansions to exemptions, such as certain foreign-owned entities, reflect the UAE’s business-friendly approach. Buraqs CNP Consultants helps you maximize these benefits.

Costs of Corporate Tax in the UAE

The costs associated with Corporate Tax in UAE include tax liabilities and compliance expenses. Typical components are:

• Tax Liability: 9% on taxable income above AED 375,000, or 15% DMTT for qualifying MNEs. No tax for income below AED 375,000 or for QFZPs on qualifying income.
• Registration Penalty: AED 10,000 for failing to register with the FTA within the deadline.
• Compliance Costs: Fees for accounting, auditing, and transfer pricing documentation to meet FTA requirements.
• Professional Fees: Consultancy fees for tax registration, filing, and exemption applications (contact us for a tailored quote).

Buraqs CNP Consultants provides cost-effective solutions to manage your UAE free zone tax and compliance needs.

Benefits of Corporate Tax in UAE

The UAE corporate tax regime offers significant advantages for businesses, reinforcing its position as a global business hub:

• Low Tax Rates: A 9% standard rate and 0% for income below AED 375,000 are among the lowest globally, compared to 12.5% in Ireland or 17% in Singapore.
• Free Zone Incentives: QFZPs enjoy a 0% rate on qualifying income, attracting businesses to over 50 UAE free zones.
• Global Alignment: Compliance with OECD standards (e.g., Pillar Two, BEPS) enhances credibility for MNEs and prevents harmful tax practices.
• Exemption Flexibility: Exemptions for dividends, capital gains, and intra-group transactions support holding companies and restructurings.
• Simplified Compliance: Small businesses and QFZPs benefit from reduced filing requirements, minimizing administrative burdens.
• Economic Diversification: CT revenue funds infrastructure and non-oil sectors, ensuring long-term stability for businesses.
• Expert Support: Our consultancy ensures accurate compliance, maximizing exemptions and incentives for your business.

The UAE’s CT regime balances competitiveness with transparency, making it ideal for Dubai business tax planning.

Frequently Asked Questions (FAQs) About Corporate Tax in UAE

1. What is the corporate tax rate in the UAE?

The standard rate is 9% on taxable income above AED 375,000, with 0% for income below this threshold. MNEs may face a 15% DMTT from 2025.

2. Who is exempt from corporate tax in the UAE?

Government entities, extractive businesses, qualifying public benefit entities, and QFZPs (on qualifying income) are exempt, subject to conditions.

3. How do free zone businesses benefit from corporate tax?

Qualifying Free Zone Persons (QFZPs) enjoy a 0% tax rate on qualifying income, with non-qualifying income taxed at 9%.

4. What are the penalties for non-compliance?

Late registration incurs a AED 10,000 penalty, and non-compliance with filing or transfer pricing rules may lead to additional fines.

5. How can Buraqs CNP Consultants help with corporate tax?

Our Dubai-based team provides end-to-end support, from FTA registration to filing, exemption applications, and transfer pricing compliance.

Contact Buraqs CNP Consultants for Corporate Tax Support

Ready to navigate Corporate Tax in the UAE? Buraqs CNP Consultants, based in Hor Al Anz, Dubai, offers expert UAE tax compliance and business setup services to ensure seamless compliance. Book a free consultation today!

• Phone: +971 58 664 8470
• Email: admin@buraqscnp.com
• Address: Alsafiya-Bldg Office No 1f-54, Hor Al Anz, Dubai, UAE

Fill out our online form to schedule a consultation or request a tailored corporate tax plan. Let’s optimize your business in Dubai!

Disclaimer: I’d like to point out that the information provided in this blog is for general guidance only and does not constitute professional advice. While Buraqs CNP strives to ensure accuracy, we don’t have any warranties regarding the completeness or suitability of this content for your specific situation. If you choose to act on this information without consulting Buraqs CNP’s expert services, you do so at your own risk. Buraqs CNP is not liable for any losses, damages, or consequences resulting from the use of this information without our direct consultation. For personalized assistance, don’t hesitate to get in touch with Buraqs CNP to ensure your business setup or visa process is handled correctly.