UAE Corporate Tax FAQs

UAE corporate tax is still new for many owners, yet it already shapes deals and salaries in Dubai. This FAQ explains key points about corporate tax in Dubai to understand it thoroughly. 

This guide shows who pays corporate tax in Dubai and how free zones are treated. Also, know the exact main rates. Use it as a quick first map before reading the FTA guides or advisers.

Corporate Tax Basics

Q1. What exactly is corporate tax in the UAE and who pays it?

The standard corporate tax rate in UAE is 0 percent on taxable profits up to AED 375,000 and 9 percent on profits above that level, subject to special regimes and reliefs. It applies to most companies registered in the UAE and to some licensed individual businesses.

Q2. How does corporate tax in Dubai link to the wider UAE system?

Dubai does not have its own separate corporate tax. The same federal rules apply in all Emirates. So a group based in Dubai follows one corporate tax law and one set of FTA procedures for its UAE entities. 

Q3. Which income is usually exempt or kept outside the tax base?

The law excludes some items such as qualifying dividends. It can also exclude certain gains on qualifying UAE corporate tax excludes qualifying dividends and some profits on approved share sales. Certain foreign branch profits can be exempt when specific conditions in the law and guidance are met.

Registration, Returns And Deadlines

Q4. When must a business register for corporate tax?

Most resident companies need to register once they are incorporated or recognised, even if they expect low profits in the early years. The FTA sets specific registration windows by legal form and incorporation date, and late registration can attract penalties. So, boards should treat corporate tax registration UAE as a core launch step rather than a side task. 

Q5. When are returns and payments due?

Most UAE corporate tax returns are due within nine months after the end of the tax period. Tax payments are due by the same deadline so firms file and pay.

Q6. How does corporate tax link to bookkeeping and financial reporting?

The law expects proper books, supporting documents and financial statements that follow recognised standards such as IFRS. In practice, weak ledgers create risk because the FTA can challenge adjustments, deny reliefs or raise assessments when numbers do not tie back to evidence.

Free Zones And Qualifying Free Zone Person

Q7. Do Dubai free zones still offer a 0 percent corporate tax rate?

Free zone companies are taxable persons under the law. Some can apply a 0 percent rate on qualifying income if they meet the tests to be a Qualifying Free Zone Person, or QFZP. These can be cited under Cabinet Decision No. 55 of 2023 and related decisions.

Q8. What are the main QFZP conditions?

A QFZP needs enough substance in an eligible free zone, must earn mainly qualifying income, must not choose to pay the normal 9 percent rate and must meet transfer pricing and record-keeping standards. If a condition fails in a period, the entity can lose QFZP status and face 9 percent on all taxable income for that period and future periods, subject to any relief in new guidance. 

Q9. How does this affect free zone corporate tax UAE planning?

Free zone structures now sit inside the corporate tax system with a different rate pattern and extra conditions, not outside the system. Boards need clear maps of activities, related-party flows and contracts so they can protect 0 percent income, price non-qualifying lines correctly and prepare for FTA reviews. 

Reliefs, Small Business And Groups

Q10. What is Small Business Relief?

Small Business Relief lets eligible resident taxpayers with revenue up to AED 3 million treat themselves as having no taxable income in a period, for tax periods between 1 June 2023 and 31 December 2026. They must still register, file returns and meet anti-abuse rules, yet the relief cuts cash tax outgo and some compliance load for smaller firms.

Q11. Who cannot use Small Business Relief?

The relief is not available to large multinational group entities that are in scope of global minimum tax rules and it is not available to Qualifying Free Zone Persons. This keeps the measure focused on local small and mid-size businesses instead of global groups that already sit in wider 15 percent frameworks.

Q12. How does tax grouping work?

Tax grouping in the UAE lets related companies file a single corporate tax return. One parent and eligible subsidiaries share profits and losses when they meet ownership and legal tests. 

Foreign Groups, DMTT And Cross-Border Points

Q13. What should foreign-owned groups know about UAE corporate tax?

Foreign parents with UAE subsidiaries or branches need to check permanent establishment rules, source of income and the effect on home-country tax. The UAE system now interacts with global minimum tax rules. So, low taxed profits in the UAE can trigger top-up tax in other countries or under the UAE’s own planned domestic minimum tax once those rules go live. 

Q14. How do global minimum tax rules change planning?

For large multinational groups, the old idea of parking mobile profits in a low-tax hub is fading. Even if a UAE entity keeps a headline rate of 0 percent on some income, Pillar Two style rules can allow other jurisdictions or the UAE itself to collect a top-up until the 15 percent level is reached at group-jurisdiction level.

Records, Audits And Practical Controls

Q15. What records must a company keep for corporate tax?

Businesses must keep records that support the tax return along with working papers for key adjustments. These records need safe storage inside or accessible in the UAE, often for at least seven years. So, the FTA can review numbers during audits or desk checks. 

Q16. How does transfer pricing fit into everyday compliance?

Related-party dealings must follow arm’s-length pricing and many taxpayers must prepare transfer pricing documentation such as a disclosure form and, in larger groups, master and local files. Even smaller entities should log simple support for margins and interest rates on intra-group flows, because the FTA can use transfer pricing tools to challenge both QFZP status and main-law returns.

Q17. What common mistakes are already visible in early audits?

Market feedback points to missed registration deadlines, weak grouping choices, unclear free zone profiles and poor linkage between corporate tax returns and VAT or ESR filings. Many errors trace back to light planning and manual spreadsheets instead of structured accounting data that feeds into EmaraTax in a repeatable way. 

How Arnifi Helps With Corporate Tax In Dubai

Arnifi works with UAE businesses that want corporate tax to sit inside normal control, not as a yearly fire drill. The team reviews structures, licences and ledgers, then maps how the rules land on each entity, including free zone positions and small business relief tests. 

Support covers registration choices, QFZP reviews, draft return packs and training for internal staff. This helps management see one clear corporate tax picture for Dubai and the wider UAE instead of scattered notes.

Final Takeaway

Corporate tax is now a fixed part of doing business in the Emirates. Clear maps, clean records and early design decisions help companies use reliefs properly while staying ready for audits and future changes. Handled in that way, corporate tax becomes a stable backdrop for growth rather than a last-minute worry each time filings are due.