What records does a UAE business need to keep for Corporate Tax?

UAE businesses must maintain financial records, supporting documents, and any information required to calculate taxable income and prepare the Corporate Tax return. Records must be kept for a minimum of seven years from the end of the relevant tax period.

Corporate Tax is calculated on your accounting profit. If the books are wrong, the CT return is wrong.

When VAT and Corporate Tax are treated as separate engagements, adjustments get missed and the taxable income figure becomes unreliable. BPOAS prepares Corporate Tax alongside the bookkeeping and VAT review, so the CT return is built on verified numbers, source documents are already checked, and the qualifying income analysis under Federal Decree-Law No. 47 of 2022 reflects what the accounts actually show.

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 carries a penalty of AED 10,000 (Cabinet Decision No. 75 of 2023 (as amended by Cabinet Decision No. 129 of 2025, effective 14 April 2026)). 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. SBR is not available to Qualifying Free Zone Persons or to businesses that are members of a multinational enterprise group with consolidated group revenue exceeding AED 3.15 billion.

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 2024 was due by 30 September 2025.

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 retained. These documents are not filed with the tax return; the FTA may request them and they must be provided within 30 days of the request.

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 (50% or more), individuals who own 50% 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 via the contact form at bposervicegroup.com/contact. The filing deadline is 9 months from the end of your financial year. Missing a filing deadline carries specific penalties under Cabinet Decision No. 75 of 2023 (as amended by Cabinet Decision No. 129 of 2025, effective 14 April 2026): AED 500 per month for the first 12 months, rising to AED 1,000 per month from month 13 onwards. Late tax payments also attract a 14% per annum monthly interest charge..

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 via the contact form at bposervicegroup.com/contact to discuss your Corporate Tax position.

Detailed Guides: UAE Corporate Tax Registration and Returns

The guides below provide in-depth references on two of the most critical Corporate Tax obligations for UAE businesses: registration with the Federal Tax Authority and the preparation and filing of Corporate Tax returns. Both are prepared by BPOAS, a Dubai-based outsourced accounting and tax compliance firm serving UAE SMEs.

UAE Corporate Tax Registration: Who Must Register, When, and What Happens If You Don't

This guide covers the Corporate Tax registration obligation under Federal Decree-Law No. 47 of 2022. It explains who must register (all UAE-incorporated juridical persons and natural persons with annual turnover exceeding AED 1,000,000), the registration deadlines that applied to entities incorporated before 1 March 2024, the 3-month deadline for entities incorporated after that date, and the AED 10,000 fixed penalty for late registration that applies from the date the deadline passed.

The guide also addresses the three most common misunderstandings: that VAT registration exempts a business from Corporate Tax registration (it does not), that free zone status removes the registration obligation (it does not), and that a loss-making business does not need to register (it does). Small Business Relief and Qualifying Free Zone Person status both require registration before any election or classification can be made.

Read the full UAE Corporate Tax registration guide →

UAE Corporate Tax Returns: How to File, What to Report, and What It Costs to Get It Wrong

This guide covers the Corporate Tax return process from accounting profit to taxable income. It explains the 9-month filing deadline (30 September for December year-end businesses), the adjustments required to move from IFRS accounting profit to UAE taxable income, the 0% rate on income up to AED 375,000 and 9% above it, and the elections available including Small Business Relief (for businesses with revenue not exceeding AED 3,000,000).

The guide covers the non-deductible expenditure categories that create the most first-year errors (fines and penalties, related-party charges at non-arm's-length rates, personal expenses run through the business), the 75% cap on loss carryforward utilisation, and the transfer pricing disclosure requirement for businesses with related-party transactions exceeding AED 40,000,000 per year. The penalty framework under Cabinet Decision No. 75 of 2023 (as amended by Cabinet Decision No. 129 of 2025, effective 14 April 2026) is also set out, including the AED 500 late filing penalty, 14% per annum interest on late payments, and the voluntary disclosure process for correcting past returns.

Read the full UAE Corporate Tax returns guide →

Prepared by BPOAS (Business Process Outsourcing Accounting Services), Dubai, UAE. General guidance only; not specific legal or tax advice. Sources: Federal Decree-Law No. 47 of 2022; Cabinet Decision No. 129 of 2025; Ministerial Decision No. 73 of 2023; FTA Corporate Tax Registration Guide.

IN-DEPTH READING

UAE Transfer Pricing: The Arm's Length Requirement, Documentation Obligations, and FTA Compliance

A full walkthrough of the UAE transfer pricing rules under Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 97 of 2023, covering the arm's length principle, related party definitions, the three-tier documentation framework, the AED 40 million Disclosure Form threshold, Country-by-Country Reporting, and the areas where FTA audit scrutiny concentrates.

Your Corporate Tax position depends on the accuracy of your bookkeeping and VAT records. Errors in your books become errors in your CT calculation. BPOAS handles bookkeeping, VAT and Corporate Tax as one connected engagement: the same team that verifies your source documents also builds your CT workings.

Written by Mohaina Asira, Managing Partner, BPOAS • Reviewed September 2026

Related FTA update: FTA Decision No. 13 of 2026 introduces new supplier and supply verification requirements for VAT input tax recovery, effective 1 October 2026. VAT compliance and Corporate Tax obligations are reviewed together under a BPOAS engagement.

Written by: Mohaina Asira, Managing Partner, BPO Accounting Services (BPOAS)

Last reviewed: October 2026

Expertise: UAE VAT, Corporate Tax (Federal Decree-Law No. 47 of 2022), IFRS financial reporting, and Zoho Books implementation for UAE-registered businesses.