The UAE’s federal Corporate Tax regime, introduced under Federal Decree-Law No. 47 of 2022 and effective for financial years starting on or after 1 June 2023, requires every UAE-registered business to register with the Federal Tax Authority and file an annual Corporate Tax return — regardless of profit level, jurisdiction, or applicable tax rate. Al Arabiya Group manages the full CT compliance cycle for mainland and free zone entities: from initial EmaraTax registration and entity classification through to annual return preparation, QFZP qualification assessment, and related-party documentation.
Corporate Tax (CT) compliance in the UAE refers to the set of registration, filing, and record-keeping obligations every UAE-registered entity must fulfil under Federal Decree-Law No. 47 of 2022. The law introduced a federal tax on business profits for the first time in UAE history, applying to financial years commencing on or after 1 June 2023. Compliance is not limited to companies that owe tax — the registration and annual filing obligations apply universally, including to entities paying 0% tax and those that are loss-making.
The regulatory landscape has evolved rapidly since the law came into force. Cabinet Decision No. 75 of 2023 established the conditions for Small Business Relief. Ministerial Decision No. 139 of 2023 defined the Qualifying Free Zone Person (QFZP) framework. Cabinet Decision No. 129 of 2025 introduced a revised administrative penalty regime effective across CT, VAT, and Excise Tax. And the Domestic Minimum Top-Up Tax, established under a separate instrument effective 1 January 2026, introduced a new compliance layer for large multinational groups with global revenue above EUR 750 million.
The Federal Tax Authority (FTA) administers CT compliance through the EmaraTax portal. All registration, filing, and payment obligations are fulfilled through this platform. The FTA cross-references EmaraTax submissions with trade licence data held by DET, DMCC, IFZA, and other licensing authorities — discrepancies in registered entity details trigger compliance flags and may delay licence renewals and banking relationships.
Corporate Tax registration is mandatory for every UAE-registered entity — this obligation applies regardless of the entity’s profit level, applicable tax rate, or jurisdiction of incorporation. There are no exemptions from registration based on size, activity, or free zone status.
The following entities are within scope and must register:
A common and costly misconception is that free zone companies qualifying for the 0% QFZP rate do not need to register because they pay no tax. This is incorrect. All free zone entities must obtain a Corporate Tax Registration Number (CTRN) from the FTA. The 0% rate affects the tax calculation only — not the registration obligation or the annual filing requirement.
Key financial thresholds for 2026:
Threshold / Category | Tax Treatment | Applies To |
Taxable income up to AED 375,000 | 0% — standard first-band rate for all entities | All registered taxable persons |
Taxable income above AED 375,000 | 9% standard rate | Mainland and standard free zone entities |
Qualifying Free Zone income | 0% on qualifying income only; 9% on non-qualifying income | Entities meeting all QFZP conditions — not automatic |
Revenue below AED 3 million | 0% via Small Business Relief election — must be claimed annually | Eligible entities electing relief on their CT return |
Consolidated group revenue above EUR 750 million | Domestic Minimum Top-Up Tax (DMTT) — effective 1 January 2026 | Large multinational groups with UAE presence |
Al Arabiya Group provides end-to-end Corporate Tax compliance support for UAE mainland and free zone entities. Our services cover every stage of the CT lifecycle — from initial registration through to annual return filing, audit defence, and ongoing advisory.
We manage the complete Corporate Tax registration process on behalf of your entity — including entity classification, financial year election, and CTRN issuance. Incorrect elections at registration are difficult and time-consuming to correct after the first filing. Our registration service covers:
We prepare and file the annual Corporate Tax return for your entity, ensuring the return accurately reflects the entity’s taxable income, available reliefs, and applicable rate. Our annual return service includes:
Operating in a free zone does not automatically qualify an entity for the 0% Corporate Tax rate. QFZP eligibility must be assessed each tax period against the substance and income conditions set out in Ministerial Decision No. 139 of 2023. If conditions are not met, the standard 9% rate applies — and the entity loses QFZP status for a minimum of 5 subsequent years.
Qualifying Free Zone Person status entitles a free zone entity to a 0% tax rate on qualifying income — but this status must be earned and maintained each tax period. We assess your entity’s QFZP eligibility and prepare the documentation required to support the 0% rate election:
For entities with transactions with related parties or connected persons, UAE Corporate Tax law requires those transactions to be priced on arm’s length terms and documented in accordance with OECD Transfer Pricing Guidelines. We prepare the required documentation in line with Ministerial Decision No. 97 of 2023:
The following deadlines apply to UAE entities for the 2025–2026 CT compliance cycle. Missing registration or filing deadlines attracts administrative penalties under Cabinet Decision No. 129 of 2025.
Obligation | Who It Applies To | Deadline | Penalty for Late Compliance |
CT Registration | All UAE entities — mandatory regardless of tax rate or profit level | Within 3 months of incorporation for new entities from 1 March 2024. Existing entities: deadline set by FTA based on licence month — check EmaraTax | AED 10,000 per late registration |
Annual CT Return — FY ending 31 December 2025 | All registered taxable persons | 30 September 2026 (9 months after financial year-end) | AED 10,000 first offence; AED 20,000 repeat under Cabinet Decision 129 of 2025 |
CT Return — First Period (waiver window) | Entities filing their very first CT return | 7 months after first tax period end — AED 10,000 late penalty automatically waived if filed within this window | No penalty if filed before 7-month waiver deadline |
EmaraTax profile updates | All registered entities with ownership, management, or address changes | Within 20 business days of any change | Compliance flag; may affect licence renewal and banking relationships |
Financial records retention | All entities | 7 years from end of relevant tax period | Penalties for unavailable records during FTA audit |
The Federal Tax Authority enforces Corporate Tax compliance through the EmaraTax platform and periodic audits. Cabinet Decision No. 129 of 2025 revised and consolidated the administrative penalty framework across CT, VAT, and Excise Tax — introducing higher penalties for repeat offences and a structured escalation path for continued non-compliance.
Violation | Penalty | Additional Consequence |
Late or missed CT registration | AED 10,000 | Regulatory flag on EmaraTax; potential impact on licence renewal and bank account maintenance |
Late CT return filing (first offence) | AED 10,000 | Interest on unpaid tax from the original due date |
Late CT return filing (repeat offence) | AED 20,000 | FTA audit risk increases; escalation to investigation for persistent non-filers |
Underpayment or non-payment of CT due | Monthly penalty on unpaid amount | Accumulates until paid; blocks clearance certificates required for government transactions |
Failure to maintain required records | Administrative penalty; amount determined by audit outcome | FTA may assess tax on a best-estimate basis where records are unavailable |
Submission of inaccurate CT return | Penalty on the understated tax amount | Voluntary disclosure within specified window reduces or eliminates penalty |
Failure to update EmaraTax profile within 20 days | Administrative penalty | Creates discrepancy between FTA and licensing authority records; triggers compliance flags |
Beyond direct financial penalties, CT non-compliance creates significant secondary consequences. FTA clearance certificates — required for government contract bids, property transactions, and some visa renewals — are unavailable to entities with outstanding CT obligations. Banks increasingly verify EmaraTax registration status during account opening and annual reviews. For related compliance obligations, see our Corporate Compliance hub and the ESR Compliance page.
Al Arabiya Group delivers documented, audit-ready outputs for every CT compliance engagement. At the conclusion of our service, your entity will hold:
Deliverable | Description |
CT Registration Confirmation | Written confirmation of successful EmaraTax registration, your Corporate Tax Registration Number (CTRN), and confirmed financial year and tax period elections |
Annual CT Return | Completed and filed CT return for the relevant tax period, with full supporting tax computation and documentation pack |
QFZP Assessment Report | A written assessment of your entity’s QFZP eligibility for the current tax period, with substance documentation supporting the 0% rate election (where applicable) |
Transfer Pricing Documentation | Master File and/or Local File for related-party transactions, prepared in accordance with Ministerial Decision No. 97 of 2023 and OECD guidelines (where applicable) |
Disclosure Form | Completed Disclosure Form filed alongside the CT return, covering all required elections, positions, and related-party transaction disclosures |
Records Retention Schedule | A structured schedule of CT-related records to be maintained, with retention periods and responsible persons identified |
The FTA does not issue reminders. The 30 September 2026 filing deadline for FY 2025 applies to every UAE-registered entity — and late filing penalties begin automatically from day one. For entities filing their first-ever CT return, the 7-month waiver window closes on 31 July 2026.
Al Arabiya Group manages the complete Corporate Tax compliance cycle for mainland and free zone entities: EmaraTax registration, QFZP qualification, annual return preparation, transfer pricing documentation, and ongoing advisory. Our tax specialists know every step of the EmaraTax process and file well ahead of the deadline.
FAQ's
Yes. All UAE-registered entities, including free zone companies, must register for Corporate Tax with the Federal Tax Authority via EmaraTax and obtain a Corporate Tax Registration Number (CTRN). There is no exemption from registration, even for entities that pay 0% tax on qualifying income. Registration is what allows the FTA to verify your Qualifying Free Zone Person eligibility and process your annual return.
For companies with a financial year ending 31 December 2025, the Corporate Tax return must be filed by 30 September 2026 via the EmaraTax portal. The filing deadline is 9 months after the end of the tax period. Companies with non-calendar financial years have different deadlines calculated on the same 9-month basis. Late filing penalties start at AED 10,000 under Cabinet Decision No. 129 of 2025.
The standard rate is 9% on taxable profits above AED 375,000. The first AED 375,000 of taxable income is subject to a 0% rate for all entities. Qualifying Free Zone Persons may access a 0% rate on qualifying income, subject to substance conditions — this is not automatic. Small businesses with revenue below AED 3 million may elect Small Business Relief. Large multinational groups may be subject to the Domestic Minimum Top-Up Tax from 1 January 2026.
A Qualifying Free Zone Person (QFZP) is a free zone entity that meets the conditions set out in Ministerial Decision No. 139 of 2023 to access a 0% Corporate Tax rate on qualifying income. To qualify, the entity must: maintain adequate substance in the UAE (appropriate employees, expenditure, and physical presence); derive income from qualifying activities only; have audited financial statements; not have elected to be treated as a standard taxable person; and not have made a mainland branch election. QFZP eligibility is assessed on each annual CT return — if conditions are not met in a given period, the 9% rate applies and QFZP status is lost for a minimum of 5 years.
Small Business Relief is an election available to UAE resident persons whose revenue does not exceed AED 3 million in the relevant tax period and all prior tax periods since 1 June 2023. An entity electing relief is treated as having no taxable income for that period — effectively paying 0% CT. The relief must be elected on each CT return where it is to apply; it is not automatic and does not carry forward without an active election. Entities that are members of a multinational group, or that are Qualifying Free Zone Persons, are not eligible.
A late filing penalty of AED 10,000 applies for a first offence, rising to AED 20,000 for a repeat under Cabinet Decision No. 129 of 2025. Entities filing their very first CT return may have the AED 10,000 penalty waived if the return is submitted within 7 months of the first tax period end. For a company with a first tax period ending 31 December 2025, the waiver deadline is 31 July 2026. Interest on any unpaid tax accrues from the original filing deadline, independent of the late filing penalty.
UAE offshore companies, including RAK ICC entities, are within the scope of UAE Corporate Tax to the extent they have a permanent establishment in the UAE or derive UAE-sourced income. An offshore entity with no UAE permanent establishment and no UAE-sourced income will generally have a taxable income of zero for CT purposes — but the registration and annual filing obligations still apply. The specific position depends on the entity’s activities, income sources, and whether any UAE nexus exists. We recommend a formal CT classification assessment for all offshore entities.
