Corporate Tax and VAT compliance for UAE businesses
What the UAE's tax rules ask of mainland and free zone businesses, and of UK founders with a company there: who must register, what is due and when, and the books and working papers behind each return.
The main deadlines
These are the rules in force on 28 October 2026. Both taxes are administered by the Federal Tax Authority (FTA), and registrations, returns and payments go through EmaraTax, its online platform.
| Obligation | Deadline |
|---|---|
| Corporate Tax registration, UAE company formed on or after 1 March 2024 | Three months from incorporation |
| Corporate Tax registration, resident individual | 31 March after the year turnover passes AED 1 million |
| Corporate Tax return and payment | Nine months after the tax period ends |
| VAT registration, once mandatory | Within 30 days |
| VAT return and payment | 28th day after the tax period ends |
| Transfer pricing documents on request | 30 days, unless the FTA allows longer |
| E-invoicing, revenue AED 50 million or more | Provider by 30 October 2026; live by 1 January 2027 |
| E-invoicing, revenue below AED 50 million | Provider by 31 March 2027; live by 1 July 2027 |
Corporate Tax: who it applies to
Corporate Tax is charged under Federal Decree-Law No. 47 of 2022. A company incorporated in the UAE is within it, and that includes a free zone company. So is a foreign company that is effectively managed and controlled in the UAE, and a non-resident with a permanent establishment or a nexus here.
An individual comes within Corporate Tax only if turnover from business activity exceeds AED 1 million in a calendar year. Wages, personal investment income and real estate investment income do not count, whatever the amount.
Registration
Every taxable person must register, within the timeline the FTA sets. Under FTA Decision No. 3 of 2024, a UAE company formed on or after 1 March 2024 has three months from incorporation. A resident individual who crosses the AED 1 million threshold registers by 31 March of the next year.
Registering late carries an administrative penalty of AED 10,000. Under a waiver initiative the FTA has announced, that penalty is waived automatically where the first Corporate Tax return is filed within seven months of the end of the first tax period, instead of the usual nine.
Rates, returns and payment
The tax period is normally the financial year. Taxable income up to AED 375,000 is taxed at 0%, and income above it at 9%. The return must be filed, and the tax paid, within nine months of the end of the tax period: for a year ending 31 December, by 30 September of the next year.
Small Business Relief
A resident business can elect to be treated as having no taxable income for a tax period if its revenue was AED 3 million or less in that period and in every earlier one. One period above the line rules the relief out for every later period. The election is made in the return, so a business claiming it still registers and still files.
The relief is time-limited. Under Ministerial Decision No. 131 of 2026, issued on 29 July 2026, it applies to tax periods starting on or after 1 June 2023 and ending on or before 31 December 2029. It previously ran only to periods ending on or before 31 December 2026. Qualifying Free Zone Persons cannot claim it, and nor can members of multinational groups with consolidated revenue above AED 3.15 billion. A tax loss made in a period the relief is claimed cannot be carried forward.
Qualifying Free Zone Persons
A free zone company that is a Qualifying Free Zone Person pays 0% on qualifying income and 9% on other taxable income. The conditions must hold throughout the period: adequate substance in the UAE, qualifying income, no election to be taxed at the standard rates, compliance with the transfer pricing rules, non-qualifying revenue within the lower of 5% of total revenue and AED 5 million, and audited financial statements. Failing one loses the status from the start of that period and for the next four.
Audited financial statements
For tax periods starting on or after 1 January 2025, Ministerial Decision No. 84 of 2025 requires audited financial statements from any taxable person, other than a tax group, whose revenue in the period exceeds AED 50 million, and from every Qualifying Free Zone Person. Tax groups prepare audited special purpose statements.
Transfer pricing, in brief
Dealings between related parties must be priced at arm’s length, as independent parties would have priced them. The FTA can require a disclosure of transactions with related parties and connected persons to be filed with the return. A business with revenue of AED 200 million or more, or in a multinational group with consolidated revenue of AED 3.15 billion or more, must also keep a master file and a local file. Those files, and other support for the pricing, are due within 30 days of the FTA asking.
VAT
VAT is charged at a standard rate of 5% under Federal Decree-Law No. 8 of 2017.
- Mandatory registration. A business resident in the UAE must register when its taxable supplies and imports over the previous 12 months exceeded AED 375,000, or are expected to exceed it in the next 30 days. The application is due within 30 days.
- Voluntary registration. A business may register once its supplies, or its taxable expenses, pass AED 187,500.
- Returns. The standard tax period is three calendar months, and the FTA can assign a shorter or longer one. The return, and any VAT payable, must reach the FTA by the 28th day after the period ends.
Records: how long to keep them
- Corporate Tax: seven years after the end of the tax period, for every record that supports the return.
- VAT: five years after the end of the tax period, under the Executive Regulation of the Tax Procedures Law, and 15 years for records relating to real estate.
- Longer where something is open: the regulation adds four years for an audit under way or notified in time, four years or until settlement for a dispute, one year after a fifth-year voluntary disclosure and, since 1 April 2026, two years while a refund application awaits a decision.
E-invoicing: the timeline
The e-invoicing system is set by Ministerial Decisions No. 243 and 244 of 2025, as amended in 2026. It covers every business transaction of a person doing business in the UAE, subject to listed exclusions, and each business within it must appoint an accredited service provider. Transactions with consumers stay outside the system until a ministerial decision brings them in.
- Pilot and voluntary use: from 1 July 2026.
- Revenue of AED 50 million or more: appoint a service provider by 30 October 2026, and implement by 1 January 2027.
- Revenue below AED 50 million: appoint by 31 March 2027, and implement by 1 July 2027.
- Government entities: appoint by 31 March 2027, and implement by 1 October 2027.
Revenue means gross income in the latest financial statements. E-invoices and their data are kept for the same period as other tax records.
What we do
Our part is the work and the papers behind each return.
- Bookkeeping, kept so the ledgers support both the Corporate Tax and the VAT returns.
- Financial statements, prepared from the books. Where a statutory audit is needed, it is carried out by a UAE-licensed auditor, not by us; we prepare the statements and the schedules the auditor works from.
- Corporate Tax computations and working papers: the adjustments from accounting profit to taxable income, and the tests behind any Small Business Relief or free zone claim.
- VAT return workings and reconciliations: the figures for each return, reconciled to the ledgers and to the Corporate Tax revenue.
- Registration-readiness reviews: whether and when the business must register for Corporate Tax or VAT, from its licence dates and turnover, and the information the application will need.
- Explaining the rules, in writing, so the owners know what applies and when.
Registrations and returns are submitted by the business itself through EmaraTax, or by its registered tax agent.
If the FTA has written to you
If an FTA audit notice, assessment or penalty has arrived, that is work for our sister practice. Linx Tax Defence’s UAE section covers FTA audits, penalties and disputes.
If you have UK ties as well
If you also have UK property, a UK pension or a question about UK residence, that is HMRC work. Linx Tax Defence’s page for UK expats in the UAE covers it.
One practice works across both countries. The principal, Abu Bakar Khalid FCCA, CFA, works on the UK and the UAE sides.
Common questions
Does a free zone company need to register for Corporate Tax?
Yes. A company set up in a UAE free zone is a resident taxable person and must register with the Federal Tax Authority: within three months of incorporation, for a company formed on or after 1 March 2024. It files a return for every tax period. If it is a Qualifying Free Zone Person, qualifying income is taxed at 0% and other taxable income at 9%. If it is not, the ordinary rates apply.
Is Small Business Relief still available, and until when?
Yes. Ministerial Decision No. 131 of 2026 extended it to tax periods ending on or before 31 December 2029. Revenue must be AED 3 million or less in the period claimed and in every earlier period. The relief is elected in the Corporate Tax return, so the business must be registered and must file. Qualifying Free Zone Persons and members of multinational groups with consolidated revenue above AED 3.15 billion cannot claim it.
When does a UAE business need audited financial statements for Corporate Tax?
For tax periods starting on or after 1 January 2025, audited statements are required where revenue in the period exceeds AED 50 million, and from every Qualifying Free Zone Person whatever its size. A tax group prepares audited special purpose statements instead. The audit is carried out by a UAE-licensed auditor; we can prepare the financial statements and the schedules the auditor works from.
At what turnover must a business register for VAT?
Registration is mandatory once taxable supplies and imports over the previous 12 months exceed AED 375,000, or are expected to exceed it in the next 30 days, and the application is due within 30 days. A business can register voluntarily from AED 187,500 of supplies or taxable expenses. If registration is late, the FTA registers the business from the date it became liable, and VAT on sales made in between is still payable.
How long do Corporate Tax and VAT records have to be kept?
Corporate Tax records: seven years after the end of the tax period they relate to. VAT records: five years after the end of the tax period, or 15 years for records relating to real estate. The Tax Procedures rules add further time where an audit is under way or has been notified, a dispute is open, a voluntary disclosure was made in the fifth year, or, since 1 April 2026, a refund application is undecided.
Does e-invoicing apply to a smaller business?
In time, unless all its sales are to consumers or its transactions are otherwise excluded. A business with revenue below AED 50 million must appoint an accredited service provider by 31 March 2027 and implement e-invoicing by 1 July 2027. Revenue is measured on the financial statements for the most recent accounting period. Transactions with consumers stay outside the system until a ministerial decision brings them in.
If you prepare the papers, who submits the return?
The business itself, through EmaraTax, or a tax agent registered with the FTA whom it appoints. We prepare the books, the accounts, the Corporate Tax computation and the VAT workings, and explain what they show. The figures then go into the return that the business or its agent submits. If an FTA audit notice, assessment or penalty has arrived, Linx Tax Defence covers that in its UAE section.
Talk to us about what you need
Tell us what you have to do and by when. We will explain what is involved and send you a fixed-fee quote, agreed in writing before any work starts.