Corporate Tax UAE 2025 – Rates, Rules & Compliance Guide
The UAE has long been known for its tax-friendly business environment. However, with the introduction of Federal Corporate Tax in June 2023, companies operating in the Emirates now have to comply with a structured tax framework.
For businesses in 2025, understanding UAE corporate tax rules is critical—not only to remain compliant but also to avoid unnecessary penalties. At Taxoryx Accounting, we help businesses navigate these regulations with ease, ensuring accurate filings and timely submissions.
What is Corporate Tax in the UAE?
Corporate Tax (CT) is a federal tax levied on the profits of businesses operating in the UAE. It is governed by Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
The law applies to most businesses, including those in mainland UAE, free zones, and foreign entities with a permanent establishment in the country.
Corporate Tax Rates in the UAE (2025)
As of 2025, the rates are:
– 0% – For taxable income up to AED 375,000 (to support small businesses and startups).
– 9% – For taxable income exceeding AED 375,000.
– Different rates may apply for large multinational companies meeting the OECD Pillar Two criteria (minimum 15% tax for certain global entities).
Who Needs to Pay Corporate Tax in the UAE?
You must register for corporate tax if your business falls under any of these categories:
– Mainland Companies – All UAE-registered companies except for those exempt under the law.
– Free Zone Companies – Must comply with corporate tax rules but can benefit from 0% rate on qualifying income if they meet specific conditions.
– Foreign Companies – If they have a permanent establishment in the UAE.
– Freelancers/Sole Proprietors – If earning above the taxable threshold and registered with a trade license.
Exemptions from UAE Corporate Tax
Certain entities are exempt from corporate tax, including:
– Government entities and wholly-owned government companies.
– Businesses engaged in natural resource extraction (still subject to emirate-level tax).
– Charities and public benefit organizations (approved by the Ministry of Finance).
– Certain pension and investment funds.
Filing & Payment Deadlines
– Businesses must file one corporate tax return per financial year.
– Filing is done electronically through the Federal Tax Authority (FTA) portal.
– The deadline is nine months from the end of the relevant financial year.
– Payments must be made in full by the same deadline to avoid fines.
Penalties for Non-Compliance
Failure to register, file, or pay corporate tax on time can result in:
– Administrative penalties (AED 500 to AED 20,000+).
– Interest charges on late payments.
– Legal consequences for repeated violations.
How Taxoryx Accounting Helps You with Corporate Tax
At Taxoryx Accounting, we provide end-to-end corporate tax services tailored to UAE regulations:
– Corporate Tax Registration – Ensuring your business is registered with the FTA on time.
– Tax Calculation & Filing – Accurately determining your taxable income and submitting returns.
– Free Zone Compliance – Helping you maintain qualifying status to enjoy 0% tax on eligible income.
– Advisory & Planning – Structuring your business to optimize tax efficiency.
– Record Keeping & Audit Support – Maintaining proper documentation to meet FTA requirements.
Our goal is to make corporate tax compliance simple, accurate, and stress-free for your business.
Conclusion
Corporate tax is now a permanent part of the UAE’s business landscape. Understanding the law, staying compliant, and planning strategically can help your company minimize liabilities and avoid penalties.
With Taxoryx Accounting as your partner, you can focus on growing your business while we handle the complexities of corporate tax.
FAQs – Cloud Accounting in the UAE
Is corporate tax the same as VAT in the UAE?
No. VAT is a tax on goods and services, while corporate tax is on business profits.
Do free zone companies pay corporate tax?
They must register and file returns, but qualifying income may be taxed at 0% if conditions are met.
What happens if I don’t register for corporate tax?
You may face administrative penalties and interest charges.
How do I know if my income is taxable?
Our experts at Taxoryx can review your financials and determine your taxable income.
Can corporate tax be reduced?
Yes, through legitimate tax planning, expense optimization, and proper structuring.
