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UAE Corporate Tax (CT) became effective for financial years starting on or after 1 June 2023. By now, most UAE businesses have filed their first CT return — or are about to.

Here’s the complete guide for 2025–2026.

The Basics

• Rate: 9% on taxable income above AED 375,000
• 0% rate: On taxable income up to AED 375,000
• Small Business Relief: Revenue under AED 3M can elect for 0% (through 2026, subject to conditions)

Who Must Register?

Every UAE juridical person (LLC, sole establishment, free zone company, branch) and certain natural persons conducting business must register for CT — even if they’ll pay zero tax.

Deadlines are based on your licence issuance month. Penalties for late registration: AED 10,000.

Free Zone Companies

Qualifying Free Zone Persons (QFZPs) can benefit from a 0% rate on Qualifying Income. To qualify:

• Maintain adequate substance in the free zone
• Derive income from Qualifying Activities
• Meet the de minimis non-qualifying revenue test (max 5% or AED 5M)
• Prepare audited financial statements
• Not have elected out of the free zone regime

Calculating Taxable Income

Start with your accounting profit per IFRS financial statements. Then make adjustments:

Common add-backs (non-deductible):

• 50% of entertainment expenses
• Fines and penalties
• Donations to non-approved entities
• Excessive interest (subject to 30% EBITDA cap)

Common deductions:

• Qualifying charitable donations
• R&D expenditure
• Pension contributions

Transfer Pricing

Related party transactions must be conducted at arm’s length. You must maintain a Master File and Local File if thresholds are met. This is a major compliance area — and a common audit trigger.

Filing and Payment

• CT return due: 9 months after your financial year end
• Tax payment: Same deadline as return
• Year end 31 Dec 2024: Return due 30 September 2025
• Year end 31 Dec 2025: Return due 30 September 2026

Key Actions for 2026

• Register if you haven’t already (penalties are accumulating)
• Confirm your free zone status and qualifying income breakdown
• Review related party transactions for arm’s length compliance
• Prepare audited financials if required
• File your return on time

Need help with UAE Corporate Tax registration, structuring, or filing? Contact FSH Financial Consultants at info@fshconsultants.com