This is the most common and most expensive misunderstanding we see. Corporate Tax applies to financial years beginning on or after 1 June 2023, and the obligation to register is separate from the question of how much tax you actually pay.
Who has to register
Every taxable person. That includes free zone companies and businesses whose taxable income falls below AED 375,000. Registering is not optional because your rate happens to be zero, and administrative penalties have been applied for late registration.
How the rate works
- Zero per cent on taxable income up to AED 375,000
- Nine per cent on the amount above it
- Taxable income starts from accounting profit, then adjusts for items the legislation treats differently
The deadline is earlier than it looks
The return and any payment are due within nine months of the end of your tax period. For a 31 December year end that means 30 September the following year. Where your licence or free zone requires audited financial statements, the audit generally has to be finished first, so the practical deadline sits well before the filing date.
Key points
- Register regardless of your expected rate
- Nine months after year end to file and pay
- Small Business Relief may apply below AED 3 million of revenue, but it must be elected
- Free zone zero per cent depends on substance, and is tested each year
What to do if you have not registered
Register now rather than waiting. Correcting your own position is treated differently from having it found for you, and the cost of late registration only grows. If past returns were filed incorrectly, a voluntary disclosure is usually the right route.
General information, not tax advice. Rates, thresholds and deadlines are set out in UAE legislation and may be amended. Confirm your position with Finaxil or the Federal Tax Authority before acting.
