Tax and corporate compliance in the UAE: what has changed
Federal Corporate Tax has applied in the UAE since 2023, and VAT since 2018. Both are administered by the Federal Tax Authority (FTA) through the EmaraTax portal. On top of that come beneficial ownership (UBO) disclosure and record-keeping requirements.
Many companies set up “just for the bank account” or for a single contract don't realise they must register for Corporate Tax even if no tax is due. Penalties for late registration and late returns are applied automatically, and banks increasingly ask for a company's tax status.
9% Corporate Tax
- Taxable income up to AED 375,000 is taxed at 0%; the portion above that is taxed at 9%.
- All resident companies, including free zone companies, must register regardless of profit.
- Free zone companies can apply 0% to qualifying income if they meet the Qualifying Free Zone Person conditions. The conditions are strict and worth re-checking every year.
- Small businesses with revenue up to AED 3 million can elect Small Business Relief. A 2026 Ministry of Finance decision extended it to tax periods ending on or before 31 December 2029; it has to be elected in the return.
- The annual return is generally due within 9 months of the end of the tax period.
Before filing, it pays to review related-party transactions, non-deductible expenses and available reliefs. We do this together with your accountant.
5% VAT
UAE VAT is charged at 5%. Registration is mandatory once taxable supplies exceed the statutory threshold, and voluntary registration is available below it. Some supplies are zero-rated or exempt — certain exports, for example. We help you work out whether you need to register and set up compliant tax invoicing and return filing.
UBO, ESR and other obligations
- UBO. Companies must keep a register of ultimate beneficial owners, file it with their registering authority and update it on any change. Errors here often surface during bank reviews.
- ESR (economic substance). The regime was abolished for financial years ending after 31 December 2022, and penalties for those periods were cancelled. Obligations for 2019–2022 still stand.
- Accounts and audit. A number of free zones require annual audited accounts to renew the licence.
For how this fits into running a newly formed company, see after company registration.
What we do
- Review your company: jurisdiction, activities, income streams, related parties.
- Map your Corporate Tax, VAT and UBO obligations and check what has already been done.
- Register the company on EmaraTax or fix missed registrations.
- Prepare documents to claim reliefs and respond to FTA queries.
- Track return and licence renewal deadlines.
Tax computations and bookkeeping stay with your accountant or auditor; we cover the legal side. For a full health check, see our legal audit.
Fees
One-off tasks (registration, correcting errors, responding to a query) are fixed-price projects from AED 5,000. Ongoing tracking of deadlines and obligations is covered by corporate legal support on retainer from AED 3,500 a month. Consultations start at AED 750 for 60 minutes.
FAQ
Yes. Registration is mandatory for resident companies whether or not they make a profit, and late registration attracts a penalty.
Not automatically. The 0% rate applies only to qualifying income and only if the company meets the Qualifying Free Zone Person conditions. Otherwise the standard 9% applies.
Not for financial years ending after 31 December 2022 — the regime has been abolished. Obligations for earlier years remain.
No. We advise on UAE law. For Russian matters such as CFC rules or currency control, we recommend a specialist tax adviser in Russia.