Understanding Corporate Tax in the UAE: What Every Business Owner Should Know
June 28, 2025
Since the introduction of corporate tax in the UAE, business owners have been seeking clarity on their obligations and how to stay compliant. Whether you’re running a Free Zone company or a Mainland entity, understanding how corporate tax affects your business is now essential.
In this article, Vision Plus Management Consultancies LLC provides a concise, up-to-date guide to help you navigate the new tax landscape with confidence.
What Is Corporate Tax in the UAE?
Corporate tax is a direct tax imposed on the net profit of businesses. Introduced in June 2023, the UAE’s corporate tax aims to align with international tax standards and ensure economic transparency.
Key Corporate Tax Highlights (as of 2025):
Standard Rate: 9% on annual taxable profits above AED 375,000
Tax-Free Threshold: Profits below AED 375,000 are taxed at 0%
Applicable To: Mainland and certain Free Zone entities
Exemptions: Government bodies, certain investment funds, and qualifying Free Zone companies
Who Needs to Register for Corporate Tax?
The following businesses must register and file corporate tax returns:
Mainland companies operating in the UAE
Free Zone companies that do not meet “qualifying” criteria
Foreign entities with a permanent establishment in the UAE
Freelancers or individuals earning above the threshold under a license
✅ Vision Plus Tip: Even if your business falls under 0% tax, registration is mandatory to remain compliant.
When and How to File Corporate Tax?
Corporate tax filing is typically done once per financial year. Businesses must:
Register with the Federal Tax Authority (FTA)
Maintain accurate financial records
Submit the tax return within 9 months of the end of the financial year
Pay any taxes due before the deadline to avoid penalties
✅ At Vision Plus, we help clients handle the registration, financial reporting, and filing — all under one roof.
⚠️ Penalties for Non-Compliance
Failure to register, file, or pay corporate tax can result in:
Fines ranging from AED 10,000 to AED 50,000
Suspension of business licenses
Legal and reputational risk
Frequently Asked Questions
Are Free Zone companies exempt?
Only if they meet the “qualifying Free Zone person” criteria — such as conducting business within the zone or outside the UAE. Many still need to register.
Can I register myself?
Yes, but mistakes in classification or reporting can lead to penalties. We recommend working with a professional like Vision Plus.
How Vision Plus Can Help
Corporate tax registration
Compliance audit and advisory
Yearly filing and financial reporting
Risk management & exemption consultation
📞 Book a Free Tax Consultation
Stay compliant, avoid penalties, and protect your business.
👉 Schedule Now with Vision Plus.
