UAE corporate tax and VAT for new companies: what you must register for

The UAE is still one of the world's most tax efficient places to run a business. But since corporate tax arrived in 2023, every company has registration and filing duties, even if it makes no profit. Missing corporate tax registration in the UAE can cost AED 10,000 or more in penalties.

Corporate tax at a glance

• 0% on taxable profit up to AED 375,000
• 9% on taxable profit above AED 375,000
• 0% on qualifying income for Qualifying Free Zone Persons that meet the FTA conditions
• Registration is mandatory for every company, whether or not it makes a profit

The deadline new companies miss

Companies incorporated on or after 1 March 2024 must register for corporate tax within 3 months of incorporation. Late registration carries a fixed AED 10,000 penalty. The FTA has offered a waiver for eligible businesses that file their first return early, but the simplest approach is to register on time.

VAT registration

• Mandatory when taxable supplies or imports exceed AED 375,000 in 12 months, or are expected to in the next 30 days
• Voluntary from AED 187,500, which can help you recover VAT on startup costs
• The standard VAT rate is 5%, and returns are usually filed quarterly

Free zone companies and tax

A free zone company can benefit from 0% corporate tax on qualifying income if it meets the Qualifying Free Zone Person conditions, including adequate substance in the zone and audited financial statements. Income that does not qualify is taxed at 9%. Structure matters, so plan it at setup.

What you need in place

• Corporate tax registration on EmaraTax
• Accounting records kept for at least 7 years
• Audited financial statements, where required
• Annual corporate tax return filed within 9 months of the financial year end

Ask about VAT and corporate tax registration