Federal corporate tax applies in the UAE for financial years starting on or after 1 June 2023. For newly formed companies, the practical priorities are straightforward: register on time, understand how the rules apply to your structure and keep proper records from day one.
Who needs to register?
Most UAE companies — including free zone companies — are required to register with the Federal Tax Authority, even if they expect to have no tax to pay. Registration deadlines are set by the authority, and late registration can attract penalties, so it should be part of your post-incorporation checklist.
The headline rates
- 0% on taxable income up to AED 375,000
- 9% on taxable income above AED 375,000
- A 0% rate may apply to qualifying income of a Qualifying Free Zone Person that meets the required conditions
Free zone companies
Free zone companies are within the corporate tax regime. The 0% rate on qualifying income depends on meeting specific conditions, including maintaining adequate substance and the nature of the income earned. It is not automatic, and the position should be reviewed each year.
Records matter from the start
Tax returns are built on accounting records. Setting up reliable bookkeeping early — with clear separation of business and personal transactions — makes filing far simpler and supports banking relationships too.
