If you run a business in the UAE, it is no longer a choice whether or not to file a corporate tax return since June 2023. So whether your organisation is on the mainland or within a free zone, you now have to ensure you are meeting the tax requirements set by the Federal Tax Authority (FTA).
So, if you don’t file the corporate returns, some penalties can affect your business financially and also reputationally.
Why Are Corporate Tax Returns Required of Businesses?
Regardless of profit, all taxable individuals are required to register and file. There are a few options for relief, but submission is still necessary.
- A trade’s credibility with banks, speculators, and possible partners is increased by timely and transparent corporate tax filings. Sorting out your financial data comes after filing your business tax return. This helps you make more informed and confident decisions for your trade by providing you with a clear picture of your advantages, expenses, and room for expansion.
- For investment and funding readiness, accurate tax returns and audited financial statements are crucial.
- You can also claim exemptions and deductions when you file your taxes. Businesses with profits under AED 375,000 are taxed at 0%, and under certain circumstances, you may be completely tax-free if you live in a free zone under certain conditions. This makes business setup in the UAE more attractive than ever.
Who Must File a Corporate Tax Return in the United Arab Emirates?
The majority of companies operating in the United Arab Emirates are currently required to register for corporate tax and file yearly tax returns with the Federal Tax Authority (FTA) as part of the federal corporate tax regime that was implemented on June 1, 2023.
A brief summary of who is required to comply is as follows:
Mainland Businesses
Regardless of measure or industry, all companies registered and operating on UAE territory are subject to corporate assessment and are required to submit annual returns.
Companies in Free Zones
Filing a return is still required even though many people may be eligible for 0% tax under certain circumstances (such as earning qualifying income and maintaining adequate substance).
Branches of Foreign Companies
If a non-resident corporation has a permanent establishment in the UAE, they will be required to submit a return for the income that they generate in the UAE.
Freelancers and Sole Proprietors
Commercial license holders such as specialists, experts and sole owners are also deemed as taxable individuals if their annual net income is more than AED 375,000.
Who’s Exempt?
Categories that are exempt include government entities, specified investment entities and mining entities. But being exempt doesn’t mean you avoid registration. You will be obliged to register and confirm your non-taxable status.
A Glance at Corporate tax Filings in the UAE
The turning point for the UAE was in June 2023, when corporate tax was applied. It has transformed the country’s business environment and ushered in a new era of regulation and compliance. The regime is in line with prevailing international tax practices but also supports the UAE’s status as a business-friendly location due to very competitive tax rates relative to other jurisdictions. That’s also one of the many reasons top investors explore Dubai company registration early in their planning.
Corporate Tax Rates in the United Arab Emirates
- Tax-free up to AED 375,000
- Over AED 375,000 is subject to 9% tax.
These affordable rates support entrepreneurship and encourage enterprises exploring Dubai company registration and expansion in the region.
Tax Regulations for Free Zone Businesses
Businesses operating in free zones are still eligible for a 0% tax rate, but only if they follow certain guidelines, like:
- Generating income that meets the FTA’s qualifying income criteria
- Maintaining a legitimate and active business presence in the UAE
- Avoiding business activities with the UAE mainland, except in permitted cases
The law still requires registration and yearly filing even if a business is eligible for the 0% rate.
Relief for Small Businesses
The UAE offers a Small Business Relief program to support smaller businesses. Companies with annual revenue below AED 3 million may opt for simplified corporate tax filing, with a 0% tax rate and reduced documentation requirements. This relief applies to tax periods starting on or before December 31, 2026.
15% Multinational Top-Up Tax (DMTT)
According to the OECD’s Pillar Two framework, multinational corporations with global revenue of 750 million or more will be subject to the Domestic Minimum Top-Up Tax (DMTT), a 15% global minimum tax, effective January 2025. This guarantees that big businesses, no matter where they operate, pay their fair share of taxes.
Deadlines for Business Tax Return
An annual return must be filed by any company that is subject to corporate tax. The deadline is nine months following the end of the fiscal year. For instance, a company whose fiscal year concludes on December 31, 2024, needs to submit its return by September 30, 2025.
What Issues Do People Run Into When Filing Corporate Tax Returns?
- Errors in registration: Incorrect entity details or missed registration deadlines.
- Misreported figures: Revenue errors and wrongly classified expenses affect taxable income.
- Missed deadlines: Many overlook the 9-month filing deadline.
- Poor documentation: Failure to retain required records for 7–8 years.
- System issues: Tax software not aligned with UAE-specific rates or rules.
- Transfer pricing & PE confusion: Leads to problems with tax residency and compliance.
Documents Required for Corporate Tax Filing
- Trade License
- Emirates ID (Owner/Authorized Signatory)
- Passport Copy (Owner/Authorized Signatory)
- Corporate Tax Registration Certificate
- Financial Statements
- Trial Balance
- Profit and Loss Statement
- Related Party Transaction Details
- Bank Statements
- VAT Returns (if applicable)
- Lease Agreement or Tenancy Contract
- Economic Substance Report (if applicable)
- Board Resolution (if applicable)
- Power of Attorney (if filing via third party)
- Benefits of Filing Corporate Tax on Time
- Total regulatory compliance with UAE tax law
- Avoidance of penalties and interest charges
- Improved business reputation and stakeholder trust
- Smooth financial audits and investor due diligence
- Access to government incentives (e.g., R&D or high-value employment credits)
Due Dates & Penalties for Late Business Tax Return Filing
Registration: Within 3 months of formation or by March 31 after revenue exceeds AED 1 million.
Filing deadline: Within 9 months of tax year-end via EmaraTax
Penalties:
- AED 10,000 for missed registration
- AED 500/month late filing (max 12 months), then AED 1,000/month
- AED 20,000 for audit non-cooperation
- 14% interest on overdue tax
- Penalty waivers are available if filed within 7 months of the year-end.
Why Does the UAE Consider a Gateway to International Business?
Tax‑friendly Regulations:
A 9% corporate tax is levied only once the earnings reach AED 375,000 and not lower. Profits below the threshold are taxed at 0% and qualifying free zone entities still enjoy full tax exemptions.
Location in the heart of the world:
Situated between East and West, the UAE is within easy reach of established markets to expand business.
Investor ecosystem variety:
The remote ownership in free zones and on the mainland, with total foreign ownership up to 100% demonstrates that the UAE has appealed to American, UK, Canadian, and global companies.
How does Your Consultation look with E-startup?
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Register for a free one-on-one meeting with our CA
Begin with a one-on-one online meeting with one of our experts. We will learn how your business is set up. Our experts will answer your questions, clear up any confusion you may have, and help you figure out how much corporate tax you owe.
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Collecting the Right Paperwork
We help you with all of your needs. We assist in compiling all necessary records in advance, based on the nature of your business, so you are ready to file.
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Preparing and Examining
The certified experts who deal with your taxes promise accuracy and conformity to the United Arab Emirates corporate tax guidelines. moreover, before submitting, each submission undergoes re-checking to avoid any mistakes.
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Submission through EmaraTax
We take care of the complete submission procedure through the official EmaraTax platform, which cuts down on oversights and saves time for everybody
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Post-Filing Assistance
Once your return is filed, we don’t disappear. You’ll get regular updates, deadline reminders, and help with any follow-ups.
FAQs
Is corporate tax mandatory in the UAE now?
Yes, corporate tax filings apply to most UAE businesses from June 1, 2023.
How to Calculate Corporate Tax Filings in the UAE?
If your taxable profit is up to AED 375,000, you pay 0% corporate tax.
If your taxable profit exceeds AED 375,000, only the amount above that is taxed at 9%. So, the first AED 375,000 is always tax-free.
Do free zone companies have to pay tax?
Not always. If a free zone company sticks to approved activities and meets all the conditions, it can still enjoy the 0% tax rate. But if it earns income from the UAE mainland or does business that doesn’t qualify, then that part is taxed at 9%.
Can I file my corporate tax myself at home?
Yes, of course! However, professional help ensures accuracy and avoids penalties. You can book your free consultation with E-startup!
What’s included in your business tax return filing package?
Everything from tax registration to return filing and post-filing compliance support.
I live in Canada. can I file taxes for my UAE business remotely?
Yes! We assist NRIs and expats with end-to-end remote filing.
Is an audit required for corporate tax in the UAE?
An audit is not mandatory for all. However, some businesses, such as free zone entities claiming 0% tax, must have audited financials.
Can You tell what is the R&D scheme is in the UAE?
Yes, businesses that invest in research and development can benefit from tax incentives provided by the UAE’s R&D scheme. By lowering taxable income, qualifying R&D expenditures can support innovation and expansion in important sectors.
VAT filing happens monthly or quarterly in the UAE?
In the UAE, VAT filing is typically done on a quarterly basis, but depending on their turnover, some companies might have to file on a monthly basis.
If you need further assistance or have any doubts, our experts are here to help you. Call us: 8881-069-069.
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