Corporate Tax

UAE Corporate Tax Guide for Business Owners

By CA Ankush Jain·Published May 2026·Corporate Tax

UAE Corporate Tax has been in effect since June 2023, and by now most business owners have registered — but plenty of practical questions still come up around how it actually applies day to day. This guide covers the fundamentals in plain terms.

Who has to register?

Registration is required for most mainland and free zone businesses, regardless of current profit level. The registration deadline is tied to your entity's licence issue date, and the FTA applies a fixed penalty for missing it — separate from whether any tax is actually owed.

How is taxable income calculated?

Corporate Tax starts from your accounting profit, then applies specific adjustments — certain expenses may be disallowed, some income may be exempt, and transactions between related parties need to reflect arm's-length pricing. The result is your taxable income, which is taxed at 0% up to AED 375,000 and 9% above that threshold.

What about free zone companies?

Free zone entities can qualify for a 0% rate on qualifying income if they meet specific conditions, including maintaining adequate substance in the UAE and deriving income from qualifying activities. Non-qualifying income is taxed at the standard rate. Getting this assessment right is one of the more common areas where businesses need advisory support.

What records do you need to keep?

Businesses need to maintain financial records that support the figures reported in their Corporate Tax return, generally for at least seven years. This is one of the strongest reasons current, reconciled bookkeeping matters — your Corporate Tax position is only as defensible as the records behind it.

Practical next steps

If you haven't yet registered, confirming your specific deadline is the first step. If you have registered, the focus shifts to making sure your accounting records support an accurate return when filing time comes.