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VAT & Tax

UAE Corporate Tax Guide for SMEs

15 min read
Last updated: December 2025

Table of Contents

Introduction to Corporate Tax in UAE

The UAE introduced Corporate Tax effective June 1, 2023, marking a significant shift in the country's tax landscape. This federal tax applies to business profits generated by UAE-based companies.

Key Point: Corporate Tax is levied at 9% on taxable profits exceeding AED 375,000. Profits up to AED 375,000 are taxed at 0%, providing relief for small businesses.

Who Needs to Pay Corporate Tax

Taxable Entities

  • UAE mainland companies (LLC, sole proprietorship, branch, etc.)
  • Free zone companies (unless meeting qualifying criteria)
  • Foreign companies with permanent establishment in UAE

Exempt Entities

  • Government entities and wholly government-owned companies
  • Qualifying free zone persons (subject to conditions)
  • Natural persons earning business income below registration threshold

Registration Process

Businesses must register for Corporate Tax through the Federal Tax Authority portal. Registration is required before the first tax return filing deadline.

Registration Timeline

  • • Companies with financial year ending in 2023: Register by March 2024
  • • Companies with financial year ending in 2024: Register by March 2025
  • • New companies: Register within 3 months of incorporation

Tax Rates and Exemptions

Standard Rate Structure

Taxable income up to AED 375,0000%
Taxable income above AED 375,0009%
Large multinationals (specific criteria)15%

Filing Requirements

Corporate Tax returns must be filed within 9 months of the financial year end. The return must include audited financial statements prepared under acceptable accounting standards.

Important Deadlines

  • • Tax return filing: Within 9 months of financial year end
  • • Tax payment: At time of filing
  • • Late filing penalty: AED 10,000 for first offense
  • • Late payment penalty: Variable based on amount and duration

Need Help with Corporate Tax?

Ratio manages complete Corporate Tax registration, compliance, and filing for UAE businesses. We ensure accurate returns, proper documentation, and timely submissions.

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