Do you work with businesses outside Dubai?

Yes. BPOAS serves clients across all 7 Emirates and manages UAE entities for overseas owners who cannot be on-site themselves.

What makes BPOAS different from other accounting firms in Dubai?

We come to your office, verify physical source documents ourselves, and run every account through two departments — accounting and tax — before you see a number. Most firms work remotely from what you send them.

Do you handle both Zoho Books and Odoo implementation?

Yes. BPOAS is a certified partner for both Zoho Books and Odoo. We implement, migrate, and train your team — then continue managing your books on the same system.

UAE Corporate Tax (CIT) was introduced on 1 June 2023 under Federal Decree-Law No. 47 of 2022. It applies at a standard rate of 9% on taxable income above AED 375,000. For any business operating in the UAE, understanding Corporate Tax is now a compliance requirement, not an option. It affects how your business files with the Federal Tax Authority (FTA), how you structure your accounts, and what you report at the end of each financial year.

This guide covers everything a UAE business needs to know about Corporate Tax: who must register, how the tax is calculated, what free zone entities need to understand, and how to stay compliant with FTA requirements in 2026.

What is UAE Corporate Tax?

UAE Corporate Tax is a federal tax on the net profits of businesses operating in the UAE. It is administered by the Federal Tax Authority and applies to financial years beginning on or after 1 June 2023.

The tax rates are: 0% on taxable income up to AED 375,000 and 9% on taxable income above AED 375,000. Free zone entities with qualifying income benefit from a 0% rate, subject to specific conditions set out in the law.

Corporate Tax in the UAE is not a new concept for multinationals operating here, but it is the first time a standalone federal corporate income tax applies to the majority of UAE-based businesses. Before June 2023, only oil companies and foreign bank branches were subject to corporate income tax under emirate-level decrees.

Who Must Register for UAE Corporate Tax?

The following must register for Corporate Tax with the FTA:

UAE companies and other juridical persons incorporated in the UAE. Foreign entities that are effectively managed and controlled from the UAE. Natural persons (individuals) who conduct a business or business activity in the UAE, if their annual revenue from such activities exceeds AED 1 million.

Registration must be completed within the timeframes announced by the FTA. Failure to register on time results in administrative penalties. Registration is done through the EmaraTax portal at tax.gov.ae.

Certain entities are exempt from Corporate Tax registration: government bodies, qualifying public benefit entities, qualifying investment funds, and pension funds that meet the conditions set out in the law. To claim an exemption, entities must apply to the FTA and receive formal confirmation.

How is UAE Corporate Tax Calculated?

Corporate Tax is calculated on taxable income, which is derived from accounting net profit adjusted for specific items under the Corporate Tax law.

Starting from accounting net profit (as per IFRS-compliant financial statements), the following adjustments apply: add back expenses that are not deductible under the law (such as fines, penalties, and certain entertainment costs), remove exempt income (such as qualifying dividends and capital gains from qualifying shareholdings), and apply other adjustments required under the law.

The result is taxable income. The first AED 375,000 is taxed at 0%. Everything above that threshold is taxed at 9%.

Small Business Relief is available for businesses with revenue below AED 3 million, allowing them to treat their taxable income as zero for tax periods ending on or before 31 December 2026. This relief must be elected each year and is not automatic.

Free Zone Entities and UAE Corporate Tax

Free zone entities can benefit from a 0% Corporate Tax rate on qualifying income, provided they meet specific conditions under the law.

To qualify, a free zone entity must: be a Qualifying Free Zone Person (QFZP), earn qualifying income (as defined in the Ministerial Decisions), maintain adequate substance in the free zone, maintain audited financial statements, and not elect to be subject to standard Corporate Tax rates.

Income that does not meet the qualifying income definition is subject to Corporate Tax at the standard rates. Transactions with mainland UAE related parties are generally excluded from qualifying income. Free zone entities must track their income carefully to separate qualifying and non-qualifying amounts.

The free zone Corporate Tax framework is more complex than it appears at first read. Businesses operating in free zones that have not yet reviewed their position in detail should do so before their first Corporate Tax filing.

UAE Corporate Tax Filing Requirements

The Corporate Tax return must be filed with the FTA within 9 months from the end of the relevant tax period. For a business with a calendar year accounting period (1 January to 31 December), the first Corporate Tax return and payment for the period ending 31 December 2023 was due by 30 September 2024.

Filing is completed through the EmaraTax portal. The return requires disclosure of: taxable income, tax due, any reliefs or exemptions claimed, and related party and connected person transactions above specified thresholds.

Transfer pricing documentation is required for businesses with related party transactions above AED 40 million in a tax period. A Master File and Local File must be prepared and submitted with the return when these thresholds are met.

Financial statements prepared under IFRS (or IFRS for SMEs) are the starting point for the tax computation. Businesses that are not already on IFRS should transition before their first Corporate Tax period to avoid computation difficulties at filing time.

Transfer Pricing and Related Party Transactions

UAE Corporate Tax requires that transactions between related parties and connected persons be conducted at arm’s length. This means the pricing and terms of transactions between related parties must be equivalent to what unrelated parties would agree in comparable circumstances.

Related parties include companies under common ownership (25% or more), individuals who own 25% or more of the business, and other connected persons as defined in the law. The FTA requires businesses to maintain transfer pricing documentation that demonstrates arm’s length pricing for controlled transactions.

For many UAE SMEs, the most common related party transactions are: intercompany loans, management fees charged by related companies, and sales or purchases of goods between group entities. Each of these must be priced on arm’s length terms, supported by documentation.

How BPOAS Can Help with UAE Corporate Tax

BPOAS is a UAE-based accounting and tax compliance firm working with SMEs across Dubai and the Emirates. Our team handles Corporate Tax registration, tax period computations, and annual return filing for clients across trading, services, free zones, and construction sectors.

We help clients with: Corporate Tax registration through the EmaraTax portal, transition to IFRS-compliant financial statements where needed, preparation of the tax computation from IFRS accounts, identification of available reliefs including Small Business Relief, review of free zone income classification for QFZPs, and transfer pricing documentation for businesses with related party transactions above the disclosure threshold.

If your business has not yet filed its first Corporate Tax return, or if you are approaching your first filing deadline, contact BPOAS at bpoas.ae. The filing deadline is 9 months from the end of your financial year. Missing it carries penalties.

Frequently Asked Questions: UAE Corporate Tax

What is the UAE Corporate Tax rate?

The UAE Corporate Tax rate is 0% on taxable income up to AED 375,000 and 9% on taxable income above AED 375,000. Free zone entities earning qualifying income can access a 0% rate on that income if they meet the Qualifying Free Zone Person conditions.

When did UAE Corporate Tax start?

UAE Corporate Tax applies to financial years beginning on or after 1 June 2023. For a business with a calendar year period (January to December), the first Corporate Tax period was 1 January 2024 to 31 December 2024, with the return and payment due by 30 September 2025.

Do free zone companies pay Corporate Tax in the UAE?

Free zone companies that qualify as Qualifying Free Zone Persons and earn qualifying income pay Corporate Tax at 0% on that income. Income that does not meet the qualifying income definition is subject to the standard 9% rate. Free zone status alone does not guarantee a 0% rate under the Corporate Tax law.

What is Small Business Relief under UAE Corporate Tax?

Small Business Relief allows businesses with annual revenue below AED 3 million to elect to treat their taxable income as zero for tax periods ending on or before 31 December 2026. It must be elected in the tax return. It is not available to free zone entities, members of multinational groups, or businesses that have elected to use a different relief.

What financial statements does UAE Corporate Tax require?

The Corporate Tax computation starts from the accounting net profit in IFRS-compliant financial statements. Businesses with revenue above AED 50 million or that are Qualifying Free Zone Persons must have their financial statements audited. Other businesses must prepare financial statements but audited accounts are not mandatory unless required by other regulations.

Can BPOAS help with UAE Corporate Tax registration and filing?

Yes. BPOAS handles Corporate Tax registration through the EmaraTax portal, preparation of IFRS-based financial statements, Corporate Tax computation, and annual return filing. We work with businesses across Dubai and the Emirates. Contact us at bpoas.ae to discuss your Corporate Tax position.

This guide was prepared by BPOAS based on UAE Federal Decree-Law No. 47 of 2022 and related Ministerial Decisions current as of 2026. For advice specific to your business, contact the BPOAS team at bpoas.ae.

BPOAS | BPO Accounting Services | Dubai, UAE | Corporate Tax, VAT, Accounting, and Compliance for UAE SMEs