The United Arab Emirates (UAE) has long been celebrated as a tax-free haven for businesses and
entrepreneurs. However, with the introduction of the Federal Decree-Law No. 47 on the Taxation of
Corporations and Businesses, the business landscape has fundamentally transformed.
Whether you are a startup in a Dubai free zone, a mainland enterprise, or an international holding
company, understanding and adapting to the UAE Corporate Tax (CT) is no longer optional—it is
critical for survival and growth.
In this comprehensive guide, we break down what the new corporate tax landscape means for your
business, key compliance requirements, and how strategic partners like GITPAC can help you
navigate these changes seamlessly.
1. The Core of UAE Corporate Tax: The Basics
Effective for financial years starting on or after June 1, 2023, the UAE implements a federal corporate
tax on business profits. The framework is designed to be globally competitive while supporting the
country’s strategic economic goals.
0% Tax Rate: Applied to taxable income not exceeding AED 375,000 to support small businesses and
startups.
9% Tax Rate: Applied to taxable income exceeding AED 375,000.
Large Multinational Corporations: Subject to a different rate aligned with the OECD Pillar Two rules
(for MNEs with global revenues exceeding €750 million).
One of the most common questions businesses ask is: “Do Free Zone companies have to pay
corporate tax?”
The short answer is yes, under certain conditions, though Free Zone Persons can still benefit from a
0% tax rate on Qualifying Income, provided they meet specific substance requirements:
Maintain Adequate Substance: The business must have adequate assets, qualified employees, and
incur operating expenditures in the UAE.
Earn Qualifying Income: Income must come from activities permitted within the Free Zone and
transactions with non-Free Zone entities (or specific qualifying activities).
Comply with Transfer Pricing Rules: Transactions with related parties must adhere to arm’s length
principles.
Not Opt-Out: A Free Zone Person can elect to be subject to the standard 9% corporate tax rate instead.
Failing to meet these conditions means the Free Zone entity will lose its tax-free status and be taxed at
the standard 9% rate on all its income.
Navigating the new tax landscape isn’t just about calculating what you owe; it’s about rigorous
administrative compliance. Here is what every business owner must do:
Tax Registration: All taxable persons (including exempt persons and Free Zone entities) must register
with the Federal Tax Authority (FTA) and obtain a Corporate Tax Registration Number within the
specified deadlines set by the FTA.
Maintain Financial Records: Businesses are legally required to maintain audited financial statements
prepared in accordance with internationally accepted accounting standards (IFRS) for a minimum of 7
years.
Filing Tax Returns: Taxable persons must file a Corporate Tax return and settle any payable tax
within 9 months following the end of the relevant tax period.
Transfer Pricing Documentation: Businesses engaging in transactions with related parties must
maintain Local and Master Files to demonstrate that transactions are priced fairly.
Navigating tax laws, managing accounting standards, and filing returns accurately can drain valuable
internal resources. This is where GITPAC steps in as your trusted corporate partner.
At GITPAC, we specialize in helping businesses establish, structure, and manage their operations in
the UAE. Our suite of corporate tax services includes:
Corporate Tax Registration & Advisory: Ensuring your business is registered on time and correctly
classified under mainland or free zone rules.
Tax Health Checks & Impact Assessments: Analyzing your current business model to identify tax
exposures, optimize your structure, and maximize exemptions (such as Qualifying Income in Free
Zones).
Bookkeeping & Financial Statement Preparation: Ensuring your accounts are IFRS-compliant and
ready for audit.
Ongoing Compliance & Filing: Handling your FTA filings accurately and punctually so you can
focus on growing your business.
Don’t let tax complexities slow you down. Contact Gitpac today to schedule a consultation with our
tax experts and secure your business’s financial future.
Frequently Asked Questions on CFO Services in Dubai
Who is subject to UAE Corporate Tax?
UAE Corporate Tax applies to all UAE businesses and commercial activities, including mainland
companies, free zone companies (unless they meet specific qualifying criteria), and foreign entities
that have a Permanent Establishment (PE) in the UAE. Individuals are generally exempt unless they
conduct business activities requiring a commercial license.
What is the threshold for paying the 9% corporate tax?
Taxable income up to AED 375,000 is subject to a 0% tax rate. Any taxable income exceeding
AED 375,000 is taxed at the standard rate of 9%.
Are Free Zone companies completely exempt from Corporate Tax?
Not automatically. While Free Zone entities can benefit from a 0% tax rate on Qualifying Income,
they must meet strict economic substance requirements, comply with transfer pricing rules, and avoid
earning non-qualifying income above certain thresholds
When is the deadline to register for UAE Corporate Tax?
The FTA has issued specific timelines for corporate tax registration based on the month of
incorporation or issuance of the license. Failing to register within the stipulated deadline can result in
significant administrative penalties.
Do I need to maintain audited financial statements
Yes. All taxable persons—and all Free Zone Persons regardless of their income level—are
required to prepare and maintain audited financial statements for corporate tax purposes
How can GITPAC help my business with corporate tax compliance?
GITPAC provides end-to-end corporate services, including FTA registration, corporate tax impact
assessments, bookkeeping, transfer pricing documentation, and tax return filing. We ensure your
business remains fully compliant while optimizing your tax position
