UAE Corporate Tax Guide for SMEs

Introduction to Corporate Tax in UAE

UAE Corporate Tax applies to financial years starting on or after 1 June 2023. It is a federal tax on the profits of UAE businesses.

Key Point: The rate is 9% on taxable profits above AED 375,000. Profits up to AED 375,000 are taxed at 0%. Businesses with revenue of AED 3,000,000 or less can elect Small Business Relief.

Who Needs to Pay Corporate Tax

Taxable Entities

UAE mainland companies (LLC, sole proprietorship, branch, etc.)
Free zone companies (unless meeting qualifying criteria)
Foreign companies with permanent establishment in UAE

Exempt Entities

Government entities and wholly government-owned companies
Qualifying free zone persons (subject to conditions)
Natural persons earning business income below registration threshold

Registration Process

You register for Corporate Tax through the Federal Tax Authority portal. The FTA sets your registration deadline, and it is not tied to the date your first return falls due.

Registration Facts

Register on the Federal Tax Authority portal at tax.gov.ae
Your deadline is set by the FTA and depends on your licence and incorporation date. Check it rather than assume it.
Missing the registration deadline costs AED 10,000. It is charged once.

Tax Rates and Exemptions

Standard Rate Structure

Taxable income up to AED 375,0000%

Taxable income above AED 375,0009%

Small Business Relief (elective): revenue up to AED 3,000,000No tax payable

Filing Requirements

Your return is due within 9 months of the end of your financial year. The tax is payable on the same date. The return is built from your financial statements, so the bookkeeping has to be closed before that 9-month date, not on it.

Deadlines and Penalties

Return filing: within 9 months of financial year end
Tax payment: due on the filing date
Late registration: AED 10,000, charged once
Late filing: AED 500 per month for the first 12 months, then AED 1,000 per month
Unpaid tax: 14% annual interest
Source: Federal Tax Authority, tax.gov.ae

Corporate Tax, Handled

Ratio handles Corporate Tax registration, bookkeeping and return filing for UAE businesses. Your return goes in inside the 9-month window, with the working papers behind every figure.

Schedule Free Consultation Learn About Our Tax Services

Frequently asked questions

What is the UAE Corporate Tax rate?

UAE Corporate Tax is charged at 0% on taxable income up to AED 375,000 and at 9% on taxable income above that. The 0% band applies to the first AED 375,000 of income, so smaller businesses may owe little or nothing, but they still need to register and file a return.

When is the UAE Corporate Tax return due?

The UAE Corporate Tax return is due within 9 months of the end of the tax period. For a company with a 31 December year end, that means filing by 30 September of the following year. Keep your books closed and reconciled early so the return is not rushed.

What is Small Business Relief in UAE Corporate Tax?

Small Business Relief lets an eligible business with revenue of AED 3 million or less elect to be treated as having no taxable income for the period. You must still register and file a return to claim it, and keep records showing your revenue stayed within the limit.

What are the penalties for late Corporate Tax registration and filing?

Missing the Corporate Tax registration deadline carries a one-off AED 10,000 penalty. Late filing is penalised separately at AED 500 per month for the first 12 months and AED 1,000 per month after that. Unpaid tax also attracts interest at 14% a year, so registering and filing on time matters.

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