UAE Corporate Tax & VAT Accounting Services

The UAE Federal Corporate Tax (CT) introduced by Federal Decree-Law No. 47 of 2022 applies at 9% on taxable income exceeding AED 375,000. For income up to AED 375,000, the rate is 0%. CT applies to juridical persons incorporated in the UAE and foreign entities with a UAE permanent establishment. Financial years beginning on or after 1 June 2023 fall within scope. The Federal Tax Authority (FTA) administers CT, with annual returns due 9 months after year-end.

Qualifying Free Zone Persons (QFZPs) are taxed at 0% on qualifying income, which covers income from transactions with other free zone entities and qualifying international business activities. The 9% rate applies to non-qualifying income (e.g., UAE mainland-sourced revenue). To maintain QFZP status, a free zone entity must have adequate substance in the UAE, maintain qualifying activities, and not elect to apply the standard CT regime. Detailed substance and activity tests are defined in Ministerial Decision No. 139 of 2023.

VAT registration is mandatory when taxable supplies and imports exceed AED 375,000 in the preceding 12 months or are expected to exceed that threshold in the next 30 days. Voluntary registration is available above AED 187,500. VAT is charged at 5% on standard-rated supplies. Exports of goods and international services are zero-rated. Registration is done via EmaraTax, the FTA's digital platform. Penalties for late registration start at AED 10,000.

Under the Economic Substance Regulations (ESR, Cabinet Resolution No. 57 of 2020), UAE entities in certain "relevant activities" — banking, insurance, investment fund management, lease-finance, headquarters, shipping, holding companies, IP, and distribution and service centres — must demonstrate UAE substance. This means adequate UAE-based employees, management, and operating expenditure. ESR annual notifications are due within 6 months of the financial year-end; substance reports within 12 months.

The UAE adopted CRS (OECD Automatic Exchange of Information) in 2017. UAE financial institutions report account information of foreign tax residents to the UAE MoF, which exchanges data with 100+ partner jurisdictions. The introduction of 9% CT means the UAE is no longer considered a zero-tax jurisdiction by many CRS partner states. UAE resident companies must file an annual Economic Presence Return if they have foreign-source income, ensuring alignment with international transparency standards.