Corporate Tax in Dubai: What Businesses Must Know in 2025
Navigate UAE Corporate Tax with Confidence and Stay 100% Compliant
As of June 1, 2023, Corporate Tax in the UAE is finally in effect legally and companies carrying on taxable activities in the UAE, including companies with a license to operate in Dubai mainland and those based in one of its Free Zones, must understand the Federal Corporate Tax Law, issued by the Ministry of Finance (MoF), and ensure tax compliance. The Federal Corporate Tax Law provides a standard corporate tax rate of 9% in respect of profits exceeding AED 375,000, which completely transforms the taxation landscape in the UAE.
Whether you are a well established limited liability company in Dubai, a growing Free Zone company, or a newly established international branch running its operation in the UAE, registration and compliance, combined with reporting (which is generally independent of compliance) are all key features of corporate tax that unless handled properly can lead to legal risks, potential penalties and possible cessation of operations in the UAE. Taxable income, Transfer Pricing, maintaining records, and other aspects of accounting can be difficult to deal with without expert experience in this regard, so business should seek advice in order to ensure that they meet the Federal Tax Authority (FTA) requirements set out in the recent law.
What Is Corporate Tax in Dubai and Who Is It Applicable To?
Corporate Tax is a direct tax levied on the net profit of businesses and other legal entities. In the UAE, it’s applicable to:
Companies with annual taxable profits exceeding AED 375,000
All legal entities in mainland and Free Zones (subject to Free Zone compliance rules)
Foreign entities earning income in the UAE
Freelancers or sole proprietors if their net income surpasses the threshold
Corporate Tax is based on net profit as indicated on statutory financial statements and companies must file an annual tax return with the FTA. It’s important to note that while Free Zones can benefit from a 0% effective tax rate on qualifying income, they must still keep audited books and can only achieve 0% if they can show economic substance.
Why Does Your Business Need Corporate Tax Services in Dubai?
Adapting to the corporate tax regime in the UAE is not simply a matter of filing returns. It requires you to rethink your approach to tax planning and financial strategy. Structuring appropriately can reduce the tax liability and ensure you remain compliant for the future.
Our expert led corporate tax services in Dubai support businesses to:
• Identify what income is taxable and exempted
• Understand and apply qualifying income of Free Zones
• Prepare and maintain transfer pricing documentation
• Prepare and file accurate tax returns on time
•Avoid financial and administrative penalties
What’s Included in Corporate Tax Services by dubaisetupnow?
At dubaisetupnow, we provide comprehensive corporate tax solutions for businesses in the UAE, including:
Corporate Tax Registration with the FTA.
Tax Planning & Entity Restructuring
Calculation of Taxable Income & Deductions.
Free Zone Qualifying Income Review.
Transfer Pricing Documentation & Master Files.
Financial Statement Review & Bookkeeping Coordination.
Formal filing & submission of Annual Corporate Tax Return.
Support with FTA reconsideration and audit.
Whether you’re an SME, or multinational, we align your business model with the evolving UAE tax laws while ensuring full FTA corporate tax compliance.
What Are the Key Deadlines & Penalties?
Deadlines for Corporate Taxes are strict. You must ensure registration; you must keep annual returns; and you must keep your financial records for at least 7 years. If you do not complete and submit the steps correctly, you may receive:
• Up to AED 10,000 penalty if you register past the registration deadline
• Fines for failing to adequately report, or keep adequate records
• Suspension of business licenses in extreme situations
We have your back to ensure you come through every deadline everytime.
Who Should Consider Corporate Tax Advisory in Dubai?
If you are any of the following in Dubai, you need professional corporate tax consultancy:
• A mainland company or Free Zone company with annual revenues over AED 375,000
• A start-up or SME experiencing growth with complex revenue structures
• An international business that operates in the UAE and has branches and/or subsidiaries
• A business engaging in cross-border transactions or intra-company pricing
• A highly profitable business that is looking to minimize tax legally
How Is Corporate Tax Different for Free Zones?
Eligible companies in UAE Free Zones can benefit from 0% corporate tax on qualifying income, with certain rules having to be satisfied. Our tax specialists will provide you with guidance on:
• Substance requirements
• Qualifying activities that are eligible
• Separate accounting of Free Zone and mainland income
• FTA submissions for eligibility for 0% tax benefits
The standard rate of corporate tax in the UAE is 9% on net profits over AED 375,000 for each financial year. Any profits lower than the AED 375,000 threshold are subject to a 0% rate. For SMEs and start-ups, Dubai very much remains a business-friendly jurisdiction.
In the UAE, it is mandatory for businesses to register for corporate tax with the Federal Tax Authority (FTA) if they are a mainland business, a Free Zone business, or a local branch of an international business and taxable income exceeds AED 375,000 on an annual basis. Government recognises certain entities and extractive businesses as exempt.
Free Zone companies are to register and file their returns. They may be able to apply a 0% corporate tax rate when qualifying income is generated, subject to certain substance and activity requirements (e.g. there must be operational activity carried out in the Free Zone and the accounts must be separate).
Taxable income is determined based on net profits in accordance with the audited financial statements, adjusted for allowable deductions, exemptions and unrealized gains or losses. Companies must maintain adequate accounting records to comply with IFRS.
Transfer Pricing (TP) regulations in the UAE require companies to ensure that their transactions with related parties take place at arm's length. This is to avoid profit shifting and erosion of the tax base. Transfer pricing documentation is required for larger entities or those that engage in cross-border transactions.
Penalties can range from AED 10,000 if registration is late, penalties if non-compliance of a penalty, if inaccurate reporting, and failure to maintain records. A business could also be subject to suspension of their business license and legal action by the FTA in case of continued violations.
Companies only have to file one corporate tax return in the UAE per year, however, deadlines around this one return includes filing within 9 months from the end of the relevant financial year. Due date adherence is very important or penalties can apply.
Yes. Freelancers and sole proprietors must register for corporate tax only if their net income exceeds AED 375,000 annually. However, they do not pay tax on income (i.e. salary or similar) unless the income is received as a result of carrying on a licensed business activity.
Yes, businesses are allowed to take deductions for expenses that are wholly and exclusively incurred for business purposes. Capital expenditures may be deductible up to a certain limit, in addition to interest and research and development costs. There are limitations and restrictions on other expenses, like entertainment and fines.
By hiring a certified tax consultant, you can ensure that your business is compliant with the UAE tax laws. A tax professional can assist with registration, returns, transfer pricing and FTA audits to limit your risk and penalties while optimizing your position for tax.
Ready to Stay Fully Compliant with UAE Corporate Tax?
Get Expert Tax Support for Stress-Free Filing, Planning & Audit Protection
If your business operates in Dubai or anywhere in the UAE, corporate tax compliance is not just an obligation—it’s a strategic move to protect your operations and future growth. Whether you need help with tax registration, filing, Free Zone assessments, or Transfer Pricing—we simplify it all for you.
At dubaisetupnow, our certified corporate tax advisors ensure your business is aligned with the FTA guidelines, your tax liability is minimized legally, and your documentation is audit-ready at all times. From registration to returns, we deliver seamless support for all corporate tax requirements.
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