UAE Corporate Tax – Frequently Asked Questions

Corporate Tax came into effect for financial years starting on or after 1 June 2023. All businesses falling within the scope of the law are now required to assess and comply with applicable tax obligations.

The UAE Corporate Tax rate is 9% on net profits exceeding AED 375,000. Profits below this threshold are subject to a 0% rate to support small businesses and startups.

All businesses and individuals conducting business activities under a commercial license in the UAE, including mainland companies, free zone entities (subject to conditions),foreign businesses with a permanent establishment in the UAE, Banking operations, and businesses engaged in real estate management, construction, development, agency and brokerage activities fall under the scope of Corporate Tax.

Yes. Certain entities are exempt, such as government entities and government controlled entities (exempt if they only perform activities within their official mandate), qualifying public benefit entities, qualifying investment funds, and businesses involved in extractive or non-extractive natural resource activities (subject to emirate-level taxation).

All Taxable Persons (including Free Zone Persons) must register with the Federal Tax Authority (FTA) and file an annual Corporate Tax return. This includes maintaining proper accounting records and submitting audited financials where applicable. ATB Corporate can assist with seamless filing and reporting.

Free Zone entities that meet the definition of a Qualifying Free Zone Person may continue to benefit from a 0% Corporate Tax rate on certain types of income. However, non-qualifying income may be taxed at the standard 9%. Careful structuring and compliance are crucial.

Multinational groups are subject to Corporate Tax on UAE-sourced income. Transfer pricing rules and documentation requirements also apply, particularly for businesses with cross-border or intra-group transactions.

Generally, expenses that are wholly and exclusively incurred for business purposes are deductible. Certain entertainment costs, fines, and personal expenses may be partially or entirely non-deductible.

Yes. Non-compliance, such as late registration, inaccurate filings, or failure to submit returns, can result in significant administrative penalties. ATB Corporate offers tax health checks and compliance support to help you avoid these risks.

Small businesses with net profits below AED 375,000 benefit from a 0% tax rate. Additionally, the Small Business Relief Scheme offers further compliance simplification for qualifying entities.

Yes, if a freelancer earns income from a licensed business activity and their annual profit exceeds AED 375,000, they may be subject to Corporate Tax. However, personal income such as salaries or investment income is not taxed.

Start by registering with the FTA, maintaining accurate financial records, understanding your qualifying status, and assessing intra-group transactions. ATB Corporate provides complete tax-readiness assessments and compliance roadmaps.

Currently, the UAE does not impose withholding tax on domestic or cross-border payments. However, businesses must monitor updates, especially in relation to international tax agreements.

With a 9% rate and minimal compliance burden, the UAE offers one of the most competitive Corporate Tax regimes globally. It strikes a balance between economic openness and regulatory credibility.

Free Zone companies must carefully assess whether they qualify for the 0% rate. Failure to meet conditions—such as substance requirements or non-qualifying income—could result in full taxation at 9%.

Yes. Specific rules apply to banking, extractive industries, real estate, and government-linked entities. Sector-based nuances must be evaluated during tax planning.

Individuals earning income through a commercial license (e.g., consultancy, trading, services) may be subject to CT if their annual profits exceed AED 375,000. ATB Corporate can guide freelancers and sole proprietors through registration and planning.

Businesses must maintain audited financial statements (where applicable), transfer pricing documentation, invoices, and other records for at least 7 years. Proper recordkeeping is essential for audits and FTA review.