Yes. From 1 June 2023, the UAE introduced Federal Corporate Tax at the rate of 9%. It applies to most businesses registered in the UAE, including those in the mainland and certain free zones. Exemptions exist for government entities, qualifying public benefit entities, natural resource businesses, and qualifying free zone entities that meet specific conditions.

The UAE Corporate Tax is designed to support SMEs and maintain the country’s competitiveness. Businesses pay 0% on taxable profits up to AED 375,000, and 9% on taxable profits above this threshold. Certain multinational companies with global profits above a specific threshold may also be subject to a different rate under the OECD’s Pillar Two rules.

Free zone businesses can still benefit from the 0% corporate tax rate if they qualify under FTA rules. To do so, they must maintain adequate substance in the UAE, comply with transfer pricing rules, and earn qualifying income. If these conditions are not met, the standard 9% rate applies.

Most expenses that are incurred wholly and exclusively for the purpose of generating taxable income are deductible. These include rent, salaries, utilities, and operating costs. However, certain expenses, such as fines, personal or non-business-related expenses, and specific entertainment costs, are either partially deductible or fully disallowed.

Corporate tax returns must be filed annually with the Federal Tax Authority (FTA). Businesses are required to prepare and maintain proper financial statements, and submit returns within 9 months of the end of their financial year. No advance or provisional tax payments are required, making compliance straightforward but highly dependent on accurate recordkeeping.

Corporate tax in the UAE is new, and compliance requirements can be complex. Expert advisors help ensure accurate filings, interpret FTA guidelines, minimize risk of penalties, and optimize your tax position through effective planning. Beyond compliance, professional support provides valuable insights into how tax impacts your overall business strategy, giving you confidence to grow sustainably.