UAE Corporate Tax Guide 2025 – What Every Business Must Know Before Filing

The UAE’s 9% Corporate Tax has changed how businesses plan their finances. Whether you’re a new entity or already operating, understanding the updated rules is essential to avoid penalties and ensure compliance.

1. What Is Corporate Tax in the UAE?

Corporate Tax is a direct tax on business profits introduced to align the UAE with global tax standards.
The tax applies to:

• LLCs

• Free Zone companies (depending on qualifying income)

• Foreign entities with UAE-generated revenue

• Freelancers under commercial licenses

2. Corporate Tax Rates (Updated 2025)

• 0% on profits up to AED 375,000

• 9% on profits above AED 375,000

• 0% for qualifying Free Zone income (subject to conditions)

Understanding whether your income qualifies for 0% in Free Zones is crucial.

3. Who Must Register for Corporate Tax?

The following must register:

• Mainland companies

• Free Zone companies

• Foreign companies with permanent establishment

• Individuals earning business income

Late registration leads to financial penalties.

4. Key Corporate Tax Deductions You Should Know

Businesses can reduce taxable income through:

• Employee expenses

• Operational costs

• Marketing & advertising

• Depreciation of assets

• Bad debts (conditions apply)

A tax consultant ensures you maximize deductible expenses legally.

5. Mandatory Corporate Tax Records

Every registered entity must maintain:

• Financial statements

• Ledgers

• VAT records (if applicable)

• Invoices & expense receipts

• Bank statements

• Contract copies

Documents must be kept for at least seven years.

6. Why Businesses Need a Tax Consultant in UAE

Corporate Tax is still new, and many businesses misunderstand rules regarding:

• Free Zone qualifying income

• Transfer pricing

• Exempt income

• Deductions

• Filing deadlines

A certified expert ensures accurate filing and saves businesses from costly mistakes.

Conclusion

Corporate Tax is here to stay—and businesses must adapt early. A reliable advisor like FinAcc can help you stay compliant, save money, and avoid penalties.

Need Corporate Tax registration or filing?
FinAcc’s tax experts are ready to support you.