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July 14, 2025Resources
July 14, 2025Table of contents
- What is UAE Corporate Tax?
- UAE Corporate Tax Rates
- Who Must Register for Corporate Tax?
- Who is Not Required for Corporate Tax Registration?
- Corporate Tax Registration Deadlines
- Penalty for Late Registration
- How to Register for UAE Corporate Tax?
- Documents Required for Registration
- Need Assistance with UAE Corporate Tax Registration?
The implementation of corporate tax in the United Arab Emirates (UAE) represents a significant change for business owners throughout the Emirates. Understanding your obligations as a startup founder, freelancer, or operator of a small to medium enterprise (SME) is crucial. This guide provides essential information on who must register, the applicable corporate tax rates, necessary documentation, the registration process, and potential penalties to avoid.
What is UAE Corporate Tax?
Corporate tax is a federal tax assessed on the profits generated by companies and businesses operating in the UAE. The tax was introduced through Federal Decree-Law No. 47 of 2022 and became effective for financial years starting on or after June 1, 2023. The objectives are to enhance transparency, align with international standards, and contribute to the UAE’s long-term economic development while maintaining competitive tax rates for entrepreneurs.
UAE Corporate Tax Rates
| TAX INCOME | CORPORATE TAX RATE |
|---|---|
| Up to AED 375,000 | 0% |
| Above AED 375,000 | 9% |
| Multinational Groups | 15% |
Businesses earning less than AED 375,000 will enjoy a tax-free threshold, although registration remains mandatory.
The 15% rate applies to Multinational Enterprises groups that have consolidated global revenue of at least EUR 750 million (or its AED equivalent) in at least two of the four preceding financial years, and operate in multiple jurisdictions, including entities or branches in the UAE.
Who Must Register for Corporate Tax?
All businesses operating under a commercial license, whether on the mainland or in free zones, must register, even if they are not expected to pay tax.
1. Resident Persons:
· Mainland Companies: Required to register and file corporate tax returns
· Free Zone Entities: Must register and may qualify for a 0% tax rate if they meet the criteria for a Qualifying Free Zone Person
· Freelancers/Sole Proprietors: Registration is necessary if annual revenue exceeds AED 1 million
2. Non-Resident Persons:
· Foreign Companies with a Permanent Establishment (PE) in the UAE: Must register and pay tax on their UAE-sourced income
· Entities Earning UAE-sourced Income Without a PE: Registration may be required, depending on the nature of the activities
Who is Not Required for Corporate Tax Registration?
Certain categories are exempt from corporate tax:
· UAE government entities and controlled organizations
· Entities engaged in natural resource extraction (subject to Emirate-level tax)
· Individuals earning solely personal income (e.g., salaries, interest from bank accounts, dividends)
Unlike most countries, the UAE does not impose personal income tax.
Corporate Tax Registration Deadlines
Businesses must complete their registration within three months of the issuance of their license.
Individuals conducting business in the UAE (i.e., freelancers, sole proprietors, or partners in an unincorporated venture) and their total earnings exceed AED 1 million in a calendar year must register by 31 March of the next year.
Penalty for Late Registration
Failure to register within the specified timeframe may result in an AED 10,000 fine.
How to Register for UAE Corporate Tax?
The Federal Tax Authority (FTA) streamlines registration, allowing users to accomplish it online through the Emaratax portal
Simple steps for corporate tax registration:
1. Create an account using your email address or UAE Pass.
2. Add a new taxable person profile. After saving, click ‘View’ to access it.
3. Register for corporate tax by clicking on the three dots parallel to it.
4. Fill out the online form and upload necessary documents.
5. Review and submit. You will also receive a confirmation email.
The FTA will review your application within 20 business days and issue your corporate tax certificate, which includes your tax registration number and the deadline for your tax return.
You will also receive a separate email with your Generated International Bank Account Number (GIBAN), a unique IBAN assigned to you for making tax payments. It makes sure you correctly link your payments to your account when transferring funds from UAE banks or exchange houses.
🚨 Ensure to update your profile to reflect any changes or to replace expired documents. Updates must be completed within 20 days of expiry or change to avoid a penalty of AED 5,000.
Register for only AED 799, or FREE when you subscribe to our accounting plans.
Documents Required for Registration
To expedite the registration process, ensure you have the following documents ready:
· Certificate of Formation/Incorporation
· Trade License
· Memorandum and Articles of Association
· Passport copies of the shareholders and authorized signatory
· EID of the shareholders and authorized signatory, if they are UAE residents
· Proof of company address (e.g., Ejari or lease agreement)
If the owner or shareholder is a legal entity, ensure that they submit their valid trade license .You may also provide a Power of Attorney for the authorized signatory.
Need Assistance with UAE Corporate Tax Registration?
Whether you are navigating this process for the first time or are a growing SME seeking clarity, our team is available to provide personalized guidance. We aim to make the registration process as straightforward as possible.
Get it done for just AED 799, or completely FREE when you subscribe to any of our accounting plans.
Feel free to reach out with any questions. We are here to help. Book your free consultation today!