Understanding UAE Corporate Tax in 2025
H&H Legal & Corporate Services | UAE Tax Advisory Experts
Introduction: Corporate Tax Is Now a Business Essential in the UAE
As of 2025, corporate tax in the UAE is fully in effect—marking a major shift in the region’s business landscape. If you’re a business owner, entrepreneur, or investor, understanding how this tax system works is crucial for compliance and smart financial planning.
In this guide, H&H Legal & Corporate Services breaks down the UAE Corporate Tax Law, what it means for your business, and how you can prepare.
1. What Is Corporate Tax in the UAE?
Corporate tax is a direct tax levied on the net profit of businesses. This aligns the UAE with global tax standards and supports the country’s long-term economic vision.
Effective Date: Corporate Tax came into effect for financial years starting on or after June 1, 2023.
Tax Authority: Federal Tax Authority (FTA)
2. Corporate Tax Rates in 2025
The UAE offers one of the most competitive corporate tax regimes in the world:
0% on taxable income up to AED 375,000 (to support small businesses and startups)
9% on income above AED 375,000
15% for certain large multinational companies under the OECD’s Pillar Two framework (revenue over €750 million)
3. Who Needs to Pay Corporate Tax in the UAE?
Corporate tax applies to:
Mainland companies
Freezone companies (unless they meet exemption conditions)
Foreign companies earning UAE-sourced income
Individuals running licensed business activities
Exempt Entities:
Government entities and funds
Extractive businesses
Qualifying freezone companies (if they meet specific conditions)
4. What Income Is Taxable?
Taxable income includes:
Operating profits
Investment income (unless exempt)
Capital gains
Income from UAE and foreign sources (if not specifically exempt)
Note: Businesses must maintain accurate financial statements and file corporate tax returns annually.
5. Key Deadlines for UAE Corporate Tax in 2025
First Tax Return Filing: Within 9 months from the end of the relevant financial year
Registration Deadline: As specified by the FTA (subject to penalties if delayed)
Record Keeping: Minimum of 7 years of audited records
6. How to Stay Compliant with UAE Corporate Tax Law
To ensure compliance and avoid penalties:
Register your business with the FTA
Maintain proper accounting records
File returns accurately and on time
Seek professional guidance to structure your finances and claim exemptions legally
At H&H Legal & Corporate Services, we provide:
Corporate tax registration
Annual return filing support
Tax advisory and restructuring
Ongoing compliance monitoring
Conclusion: Stay Ahead with Expert Tax Support
The introduction of corporate tax in the UAE is a big shift—but with the right strategy, it can be navigated smoothly and even used to your advantage. Whether you’re a startup or a multinational, early preparation is key.
Other Blogs
5 Things to Know Before Starting a Freezone Company in the UAE | H&H Legal
Why Your UAE Startup Needs Legal Support | H&H Legal & Corporate Services
Frequently Asked Questions (FAQs)
Is corporate tax applicable to freezone companies in the UAE?
Freezone companies may still be subject to corporate tax if they conduct business with the mainland or do not meet qualifying criteria.
What happens if I don’t register for corporate tax?
Late registration may lead to administrative penalties. It’s crucial to register your business on time.
Do I need an accountant for corporate tax in the UAE?
While not legally required, working with a tax advisor ensures accurate filing, maximized deductions, and peace of mind.
Let’s Make Your Business Tax-Ready
Our tax consultants are ready to help you register, file, and stay compliant—without stress.
- info@handhdxb.com
- Call/WhatsApp: +971501011145
- www.handhdxb.com
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