Here’s a detailed breakdown of the UAE Corporate Tax filing requirement, including who must file, timelines, exemptions, steps to comply, and consequences of non-compliance:
🏛️ Background: Introduction of UAE Corporate Tax
The UAE introduced Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, which came into effect on 1 June 2023. This marks a major shift, transitioning the UAE from a no-corporate-tax jurisdiction to one with a formalized corporate tax regime.
✅ Who Must File Corporate Tax in the UAE?
- UAE-Resident Businesses:
- Mainland companies
- Free zone companies (even if claiming 0% under “Qualifying Free Zone Person” status — still must file)
- Branch offices of foreign companies
- Partnerships and sole establishments engaged in business activities under a license
- Foreign Companies:
- If they have a Permanent Establishment (PE) in the UAE
- Natural Persons / Individuals:
- If they earn more than AED 1 million annually through a licensed business or commercial activity, they are subject to corporate tax and must file.
❌ Who May Be Exempt (But Still Must Register):
Even if a business is exempt from paying tax, they must still register and submit a return unless explicitly excluded.
Common exempt entities:
- Government entities
- Wholly government-owned companies
- Qualifying Public Benefit Entities (charities, etc.)
- Qualifying Investment Funds
- Pension and social security funds
- Qualifying Free Zone Persons (still must file at 0%)
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💸 Tax Rate Structure:
- 0% on taxable income up to AED 375,000
- 9% on income above AED 375,000
- 15% (or higher) for multinationals under OECD Pillar Two (typically with global revenue above EUR 750 million)
📅 Deadlines for Filing Corporate Tax
| Financial Year End | Filing Deadline |
|---|---|
| 31 December 2024 | 30 September 2025 |
| 31 March 2025 | 31 December 2025 |
| 30 June 2025 | 31 March 2026 |
| 31 December 2025 | 30 September 2026 |
- Returns are due within 9 months from the end of the relevant financial year.
- Payment of any tax due must also be made by the same deadline.
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🧾 How to File: Step-by-Step
- Register for Corporate Tax:
- Use the EmaraTax portal (https://eservices.tax.gov.ae)
- Ensure your business has a Tax Registration Number (TRN)
- Prepare Financial Records:
- Maintain audited financial statements (mandatory in most cases)
- Ensure proper bookkeeping and segregation of income types (e.g., qualifying vs. non-qualifying for free zones)
- File the Return Online:
- Log in to EmaraTax
- Fill in relevant details (income, exemptions, adjustments)
- Upload any required documentation
- Submit before the due date
- Pay Any Tax Due
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⚠️ Penalties for Non-Compliance
Failing to register, file, or pay on time can result in significant fines:
| Violation | Penalty |
|---|---|
| Failure to register | AED 10,000 |
| Late filing of return | AED 500 – AED 20,000 |
| Late payment of tax due | Monthly interest on unpaid tax |
| Inaccurate returns or fraud | Heavy fines or criminal charges |
🧮 Important Notes for Free Zone Companies:
- To claim 0% tax as a “Qualifying Free Zone Person”, you must:
- Maintain adequate substance in the UAE
- Derive only qualifying income
- Not elect to be subject to 9% tax
- Comply with transfer pricing and documentation requirements
- File your return on time
🧠 Conclusion:
Filing corporate tax is now mandatory in the UAE for most businesses. Even if you’re not liable to pay tax (e.g., income is under the threshold or you’re a qualifying free zone entity), you must still register and file.