Corporate Tax Return Filing in UAE | Free Guide on Deadlines and Requirements

Understanding Corporate Tax Filing in the UAE

Corporate tax regime was implemented in 1 June, 2023 under the Federal Decree Law No. 47. This law aims to create a globally competitive landscape for UAE based businesses while maintaining easier compliance for businesses looking to establish their activities within the mainland and/or free zone areas.

Filing for corporate tax is the process of submitting your company’s tax returns to the Federal Tax Authority. After registering for corporate tax and getting your tax registration number (CT TRN), registered “taxable persons” are obligated to file tax returns and pay their liabilities to the government.

The tax return reports the taxable income for the relevant tax period; the applicable adjustments under the Corporate Tax Laws; any corporate tax payables.

You can refer to this table for the appropriate federal corporate tax rate to follow:

Category	Threshold / Rate	Who can avail of this?
Taxable persons other than QFZPs	0% on the portion of Taxable Income up to AED 375,000 and 9% on the portion of Taxable Income above AED 375,000	Applies to most Taxable Persons that are not treated as a Qualifying Free Zone Person (QFZP), including mainland companies and Free Zone companies
Qualifying Free zone Persons	0% on qualifying income and 9% on non-qualifying income	The 0% rate is generally linked to Qualifying Free Zone Person (QFZP) status and applies only to Qualifying Income, provided the Free Zone entity meets the relevant conditions. Qualifying Income (0%) includes: 1. Transactions with other FZ Persons (subject to exclusions) 2. Income from Qualifying Activities 3. Qualifying Intellectual Property 4. Other income within de minimis limits Non-Qualifying Income (9%) includes: 1. Income from Domestic or Foreign Permanent Establishments 2. Certain real estate income 3. Non-qualifying IP income
Eligible small businesses with revenue up to AED 3 million in a tax period (also referred to as the “small business relief “)	0% until the end of 2026 and 9% thereafter	(as of publishing) This incentive will be applicable until the end of 2026. Note that this incentive is designed for eligible resident taxable persons only. If in any previous year, revenue exceeds 3 million, you cannot avail this anymore.
Multinational enterprises (MNEs) with global revenue > €750 million in at least 2 of the last 4 fiscal years	15% (Domestic Minimum Top-up Tax (DMTT))	Applicable from 2025, it ensures the overall minimum effective direct tax reaches 15% under OECD Pillar Two rules, without changing the standard rate for most businesses.

Who must file Corporate Tax Returns?

Any individual or organization conducting business and registered for corporate tax must file their corporate tax returns. Corporate Tax in the UAE applies to all license types so long as the licensed activity constitutes a business under the Corporate Tax Law.

Taxable persons include:

• UAE incorporated companies of all legal forms
  • Mainland companies and Free zone entities have different jurisdictions, respectively, and thus have a few differences on their tax position.
  • Mainland – threshold will dictate 0% or 9% rate. No special status is required to apply these rates
  • Free zone companies – May qualify for a preferential 0% rate on qualifying income if they meet strict conditions as a Qualifying Free Zone Person, regardless of amount. Non qualifying income is automatically taxed at 9%
• Natural persons Individuals conducting commercial or business activities (e.g. licensed professionals, sole proprietors) maybe subject to corporate income tax if they earn annual turnover more than the AED 1 million threshold in a taxation period.
• Non-resident juridical persons With a permanent establishment (PE) in the UAE are taxable on UAE-sourced income attributed to the PE.
• Corporate Tax Groups Two or more UAE-resident companies to be treated as a single taxable person for corporate tax purposes, subject to approval by the Federal Tax Authority (FTA).

Who are the exempt persons under Corporate Tax Laws?

Certain exempt persons are entities that are outside the scope of the federal corporate income tax.

Here are examples of businesses that are not required to register for corporate tax:

1. Wholly-owned or government controlled entities unless they conduct commercial activities.
2. Certain extractive businesses (e.g., natural resource extraction) and qualifying public benefit entities can get exemptions if conditions are met. Particularly, businesses engaged in the extraction of natural resources are exempt from CT as these businesses will remain subject to the current Emirate level corporate taxation.
3. Other activities like pension funds, social security funds, and qualifying investment funds may be exempt based on regulatory conditions.

Filing, Payment, and Record-Keeping under Corporate Tax Law

Under UAE’s corporate tax law, tax returns must be submitted and filed within 9 months from the end of the specific Tax Period. Tax liabilities (if any) must also be paid by the same deadline.

After submission, proper records and other supporting documents must be retained for 7 years, just in case the FTA requests a tax audit or further information for specific compliance issues.

To avoid penalties and headaches, it is best practice for businesses to notify the FTA of any key changes to ownership structure, license details, business activities or authorized signatories. You can make the updates on the portal within 20 business days.

This rule applies equally to Qualifying Free Zone persons.

Preparing Your Corporate Tax Return

After undergoing corporate tax registration, businesses must file for their tax returns every year within nine months of applicable reporting period, even if no tax is payable or a 0% rate applies.

Before submitting, it helps to know your financial records, what is your gross taxable income, the allowable deductions and tax benefits under your registered tier.

Calculate Taxable Income based on the following

Taxable income refers to the income that is applicable to be taxed and is part of the business’ operations. It is often reflected in financial records within the accounting year, adjusted for exemptions, reliefs, deductions and losses covered under Federal Decree Law No. 47.

Financial statements must follow accounting standards accepted in the UAE. Ministerial rules dictate using cash or accrual basis system of accounting.

Samples of income applicable include:

Type of Income	Description	Sample transactions
Operating Income (most common)	Core business earnings and generally taxable	1. Sales of goods by a trading company 2. Service fees earned by consultants, agencies, or professionals within the business 3. Subscription or licensing revenue (e.g. SaaS, memberships) 4. Project-based income or retainers 5. Commission income from agency or brokerage activities
Income from business assets	Note that this is different from income from personal investments or savings	1. Rental income from business-owned property 2. Income from leasing equipment or machinery 3. Royalties from intellectual property owned by the business 4. Income from exploitation of trademarks, software, or patents
Financing and investment-related business income	Where these arise in the course of business, they are generally taxable. Note: Some dividends and capital gains may be exempt if participation exemption conditions are met or if they are received from UAE resident juridical persons, but otherwise they form part.	1. Interest income earned by a company (e.g. treasury or financing activity) 2. Foreign exchange gains related to business transactions 3. Gains from disposal of business assets 4. Dividends or capital gains that do not qualify for exemption
Other business related income	Some of these can be overlooked, but these are still important to be included	1. Management fees charged to related entities (under transfer pricing documentation) 2. Cost recharges and mark-upsInsurance recoveries related to business assets 3. Grants or incentives linked to business operations(unless specifically exempt)
Qualifying Free Zone Persons (QFZP)	Overall rule: qualifying income is at 0%; non qualifying income is taxed at 9% De Minimis Threshold Under the de minimis rule, a QFZP can remain eligible for the 0% rate if its non-qualifying revenue does not exceed the lower of 5% of total Revenue or AED 5,000,000 for the relevant Tax Period (subject to the detailed rules).	Taxable at 0% (if QFZP conditions are met): 1. Income from qualifying activities with other FZ entities 2. Income from approved qualifying activities 3. Qualifying intellectual property income Taxable at 9%: 1. Income from mainland customers with respect to non-qualifying activities 2. Income from excluded activities 3. Income breaching the de minimis threshold

What is not subject to Corporate Tax

• Employment income (salary and wages earned as an employee)
• Personal investment income not connected to a business
• Persons or income specifically exempt under the law (e.g. certain government entities)
• Non-taxable income under specific provisions (e.g. qualifying dividends)

Common Eligible Deductions (Deductible Expenses)

These are expenses that are generally deductible when calculating income subject to tax. These expenses are incurred wholly and exclusively for business purposes.

• Employee salaries, wages and benefits
• Office rent and utilities
• Software subscriptions and IT service spend
• Marketing, advertising and sales expenses
• Professional fees and business travel expenses
• Insurance costs, depreciation or amortization of business assets

Since these reduce net profits, they effectively reduce income liable to corporate tax.

How to File Tax Returns: Step by step Process

Filing is done through EmaraTax Portal, the official portal by Federal Tax Authority designed as a better experience for UAE businesses managing their tax obligations. Returns must be completed in the form prescribed by the Federal Tax Authority, using figures from the business’ official financial transactions.

The filing process applies uniformly to mainland entities, Free Zone persons, and individuals subject to corporate tax.

1. First thing you need to do is double check that your registered information is up to date.
   
   Check that your license details are up to date; your financial year end is correct; and authorized signatories are up to date.
   
   Make sure to update any changes before starting the return.
   
   Pre-Filing Checklist:
   • Tax agent details (if appointed)
   • Net profit or net income confirmed
   • Financial transactions are recorded properly and complete
   • Eligible deductions reviewed
   • Corporate tax liability is checked by your management
2. Prepare your financial information
   Finalise your ledgers and accounting books for the tax period. Confirm that your accounting profit, revenue figures and expense classifications align with your official accounting records.Revenue – Expenses = Net Income
3. Identify tax adjustments
   Review expenses and income for the ff then adjust accounting profit to arrive at taxable income.
   • eligible expenses or deductions
   • non-deductible items
   • income excluded from tax (i.e exempted under the law, if any)
4. Calculate corporate tax liability
   • Apply either 0% or 9% rate based on the entity’s tax status
   • Confirm final tax liability
   • Double check calculations for accuracy
5. Access the Corporate tax return form via EmaraTax portal
   • In EmaraTax, select Corporate tax -> Tax Return
   • Open the return for the applicable tax period
6. Complete and file corporate tax returns
   • Enter required details including: revenue and income figures, adjusted tax relevant income and calculated tax liability
   • Declare eligibility for reliefs (if any)
7. Validate and submit the form
   • Check all sections for completeness
   • Confirm declarations and acknowledgements
   • Submit the return
8. Pay corporate tax due (if any)
   • If tax is payable, you can proceed to payment through approved FTA payment channels
   • Ensure that payment is made by the filing deadline
   • Retain payment confirmation
9. Save records and confirmations.
   • Download and store the filed tax returns, acknowledgement receipt, and payment confirmation (if applicable)

Supporting documents required for Tax Filing

For corporate tax purposes, prepare the following documents to support your statements.

Remember again that at any point in time, records must be retained for 7 years. Records must be sufficient to explain both how income was calculated and how adjustments were applied.

• Standalone financial statements for the relevant reporting period
• Bank statements
• Audited financial statements (mandatory for QFZPs)
• Documentation supporting exemptions, reliefs, or 0% treatment
• Payroll records to support employees and wages declaration
• Records supporting revenue, taxable Income adjustments, and qualifying vs non qualifying income calculations (if applicable)

Filing Corporate Tax: Deadlines and Penalties for Non Compliance

Statutory deadlines apply within UAE tax laws, wherein it is a legally fixed deadline set by legislation. Therefore, missing the deadline for corporate tax filing will incur penalties and other consequences. Authorities generally have limited discretion to ignore or extend it unless the circumstances allow.

The first tax period is considered as the initial financial or fiscal year for which a business is required to file a UAE Corporate Tax return. The clock starts from when the tax applies to the business and ending on the business’ tax year.

Example:

1. Business with a calendar financial year (ending 31 December)
   • First tax period: 1 January to 31 December of the relevant year
2. Business with a non-calendar financial year
   • First taxation period runs from the CT start date to that entity’s chosen year-end
3. Newly incorporated business
   • First tax period generally runs from:
     • Date of incorporation or commencement of business
     • Until the chosen finanial year end. You can select a period of first financial year for minimum of 6 months and maximum of 18 months

Type of Activity	Deadline	Penalty
Deadline for Timely Filing	Tax Returns must be filed within 9 months after the end of the tax year in question. Any corporate tax due must be paid by the same deadline	Late filing fines – AED 500 per month for first 12 months; then AED 1,000 per month
Failure to register for corporate tax	Registration deadlines vary by taxpayer type and status. For juridical persons, the deadline depends on whether the entity is resident or non-resident, and on its incorporation/license dates, as set out in FTA Decision No. 3 of 2024. For natural persons, registration is required only if turnover from business activity exceeds AED 1,000,000 in a calendar year, in which case the registration deadline is 31 March of the following year.	A fixed AED 10,000 penalty applies if you fail to register by the deadline set
Deadline for Payment of Corporate Tax	Paid by the same 9-month filing deadline	Payment interest at 14% per annum, calculated monthly on unpaid tax
Declaration submission for Qualifying Income or Non-taxable person registration	Submitting any declaration to qualify for tax incentives	AED 500 per month in first 12 months AED 1,000 per month after, total accumulates monthly
Maintaining Records	Ongoing obligation; breach occurs when records are missing or not provided upon request	AED 10,000 per violation, and AED 20,000 for repeat offenses within 24 months
Updating Registration Details	When changes occur (e.g. authorized signatory, business address change, etc.)	AED 1,000 per violation; AED 5,000 if repeated within 24 months.
Incorrect Corporate Tax Return	Error not corrected before the statutory filing deadline	AED 500 fixed amount
Failure to provide tax records/documents in Arabic when requested	Immediately when requested	AED 5,000

Corporate Tax penalties may be updated from time to time. Always verify the latest penalty amounts and rules through official FTA guidance and the EmaraTax portal.

Tips for Businesses

To ensure a smooth, worry-free tax cycle, here are some common mistakes businesses make and how to easily circumvent it using wits and professional services like Skrooge.

1. Get registration right early and align deadlines across taxes. Corporate Tax and Value added Tax have different triggers and thresholds. Don’t assume that VAT compliance is same as Corporate Tax compliance. Maintain a single tax calendar for all relevant dates (registration, filing and payment deadlines).
   You can find more information about VAT compliance in our article here.
2. Pay first and resolve adjustments or clarifications after. While it is tempting to avoid paying any tax due immediately (whether that’s due to low funds, plans to dispute computation, or some other economic reason), we advice you to don’t put it on hold for long.
   
   Making payments at the time of filing has solved so many issues. Prevention is the best way to avoid interest charges. (think of taxes as your company’s credit card)
3. Maintain the proper books throughout the year. This avoids last minute compliance pressure and reduce filing errors.
4. Separate accounting profit from taxable income early (During your monthly review, we advice to add this to your checklist as well)
   • Remember that profit net is not the same as taxable income
   • Track early non-deductible expenses and exempt income. Use a tagging system to track.
5. Keep tax-related documents “audit-ready”. Assume that financial statements, expense support and contracts and invoices are externally ready for viewing. Records are required immediately, so store everything in one place for safekeeping.
6. For FZ entities: watch the conditions closely. Monitor qualifying vs non qualifying income and track the de minimis threshold continuously. Small breaches can affect QFZP status for multiple years.
7. Don’t underestimate transfer pricing for related party transactions. This is a high risk area. Apply arm’s length pricing even if CT rate is 0% or the transaction is internal. Keep the documentation ready at all times.
8. Never use relief initiatives and tax incentives as part of your long term strategic objectives. Your first tax year is meant to help you adjust to the rhythm and get exposed to corporate tax requirements.
9. Lastly, don’t underestimate speed of execution. It helps to update your registration as soon as things change. Outdated records are a common, easily avoidable, reason for penalties. If needed, get a team that you can trust to stay on top of this for you.

How can we help you at skrooge.ai?

At Skrooge, we help simplify things for you with the help of human insights and AI resource expert. Throughout the tax calendar, we keep you up-to-speed on your annual corporate tax compliance and treat is as more than a one-time task.

If managing spreadsheets is overwhelming, let skrooge.ai handle it and keep you safe from penalties.

Frequently Asked Questions (FAQs)