The UAE’s shift toward a structured corporate tax regime marks a major milestone in its economic journey. While the country has long been a tax haven, the new corporate tax introduced in 2023—fully taking shape in 2025—brings with it clarity, compliance, and global alignment. Whether you’re running a mainland company, a free zone enterprise, or a foreign-owned business, understanding how corporate tax works in Dubai is essential for staying compliant and competitive.
What Is the Corporate Tax in the UAE?
Corporate tax in the UAE is a direct tax levied on the net income or profit of corporations and other business entities. Introduced in June 2023, the UAE corporate tax framework is designed to align with global tax standards and diversify national revenue beyond oil and tourism.
Corporate Tax Rate (9%) – Who It Applies To
The standard corporate tax rate in the UAE is 9%, applicable to businesses with net profits exceeding AED 375,000. Here’s a quick breakdown:
- 0%: For profits up to AED 375,000 (benefiting small businesses and startups)
- 9%: For profits above AED 375,000
- 15%: For large multinational companies falling under OECD’s Pillar Two framework
This tiered approach ensures fairness while encouraging entrepreneurship and foreign investment.
Wondering if your business needs to register? Here’s a detailed guide on who must register and the deadlines.
Key Exemptions and Special Cases
Some entities are fully or partially exempt from corporate tax in the UAE:
- Government and government-controlled entities
- Charities and public benefit organizations
- Free zone businesses (meeting substance requirements)
- Businesses engaged in natural resource extraction (taxed at the emirate level)
For a full breakdown of UAE’s small business tax exemption scheme, check out our blog on UAE Corporate Tax Exemption for Small Businesses.
Corporate Tax for Free Zones and Mainland Companies
Dubai accommodates two primary types of business jurisdictions: mainland and free zones. Each follows distinct rules under the new corporate tax law.
Still choosing between free zone and mainland business setup? Explore our comparison guide: Free Zone vs Mainland Business Setup in UAE.
Are Free Zone Companies Taxed?
Free zone companies can continue to benefit from 0% corporate tax—but only if they meet qualifying criteria, such as:
- Maintaining adequate economic substance in the UAE
- Deriving income from eligible activities (like trading with foreign markets)
- Not conducting business with the mainland unless properly registered and taxed
Failure to meet these criteria may subject free zone entities to the standard 9% tax rate.
Substance Requirements for Free Zone Tax Exemptions
To retain their tax-free status, free zone companies must:
- Maintain physical offices in the UAE
- Incur sufficient operating expenditures locally
- Employ qualified staff in the UAE
- Submit annual reports to demonstrate economic substance
How to Register and File Corporate Tax in Dubai
Staying compliant begins with proper registration and timely filing.
Steps to Apply for Corporate Tax Certificate
- Determine your eligibility based on profit thresholds and business structure.
- Collect essential documents:
- Trade license
- MOA/AOA
- Emirates ID & passport copies
- Financial statements
- Register through the EmaraTax portal, the FTA’s digital platform.
- Receive your Corporate Tax Registration Certificate.
Filing Deadlines and Documentation
Corporate tax returns must be filed within nine months after the end of the relevant financial year.
- For FY Jan 1 – Dec 31, 2024: Filing deadline is September 30, 2025
- For FY June 1, 2023 – May 31, 2024: Deadline is February 28, 2025
Late registration or filing can lead to penalties of AED 10,000 or more.
Need help filing on time? Contact us today and avoid penalties.
Corporate Tax for Foreigners and Freelancers
Even those not traditionally considered corporate entities may fall under the tax net.
Do Freelancers Need to Pay Corporate Tax?
Yes—freelancers and sole proprietors with a UAE trade license who earn over AED 1 million per year must register for corporate tax.
Failure to register by March 31 of the following year may result in penalties.
Not sure if your freelance income qualifies? Speak to our tax experts for clarity.
Foreign-Owned Businesses and Tax Rules
Foreign companies earning income in the UAE must comply with corporate tax if they:
- Operate through a permanent establishment in the UAE
- Derive income from UAE sources (even without physical presence)
- Are juridical persons effectively managed in the UAE
2025 Corporate Tax Compliance Tips
Avoiding errors and staying organized are key to managing this new tax landscape.
Avoiding Penalties and Missed Deadlines
To stay penalty-free:
- Track your revenue regularly
- Register for tax on time
- Maintain proper bookkeeping
- File your returns by the applicable deadline
Proactive compliance can save you from fines and reputational risk.
Stay compliant without the stress — let us handle your filings.
Choosing the Right Corporate Tax Consultant
Navigating UAE’s new tax regulations requires local expertise. A certified corporate tax consultant in Dubai can:
- Advise on exemptions and deductions
- Help structure your business for tax efficiency
- Ensure accurate filings and documentation
Hiring a tax expert can make all the difference. Here’s why your small business should consider one: Benefits of Hiring a Tax Accountant in the UAE.
Need Help with Corporate Tax Registration?
At Raes Associates, we simplify the complex. Whether you’re a freelancer, SME, or multinational, our tax consultants ensure accurate registration, optimized filings, and strategic tax planning. Let us help you comply with confidence in 2025 and beyond.
Start your corporate tax journey with confidence. Book a consultation with Raes Associates today.
Common FAQs About Corporate Tax in Dubai
- Is corporate tax applicable to all businesses in the UAE?
Not all. Businesses under AED 375,000 profit, certain free zone entities, and qualifying government entities may be exempt. - What happens if I miss the registration deadline?
You may incur a AED 10,000 penalty, plus further fines for non-filing. - Are free zone businesses 100% exempt from tax?
Only if they meet qualifying activity and substance criteria. - Can individuals be taxed under corporate tax?
Yes, if they conduct business activities and exceed the AED 1 million turnover threshold. - What are deductible expenses under the UAE corporate tax?
Most operating costs are deductible, but some may have partial or no deduction depending on the category.
