UAE corporate tax and VAT for new companies: rates, registration and deadlines

The UAE Government portal states that the Corporate Tax Law was issued on 9 December 2022 and applies to financial years beginning on or after 1 June 2023. Scope covers all businesses and individuals conducting business under a commercial licence, free zone businesses, foreign entities with an ongoing UAE business, banking and real estate activities. The Ministry of Finance adds that juridical persons established in a free zone are within scope as taxable persons.

The FTA's Small Business Relief page illustrates the relief with a revenue threshold of AED 3,000,000: a resident taxable person whose revenue does not exceed that figure in the current and all previous tax periods may elect to be treated as having no taxable income for the period. The conditions text on the page did not extract in our check, and the relief has an end date that we could not verify from the page. Read the FTA page for the full conditions and the final tax period before electing, and note that electing the relief interacts with other elections and with loss carry-forward in ways an adviser should review.

A free zone company is a taxable person. It can pay 0% on qualifying income only as a Qualifying Free Zone Person (QFZP), and the FTA's Free Zone Persons guide lists the conditions. Missing any of them means the company is taxed under the standard rules "from the beginning of the Tax Period" and for the four subsequent tax periods.

• Be a free zone person (a juridical person incorporated or registered in a free zone).
• Maintain adequate substance in a free zone.
• Derive qualifying income, as defined in the relevant Cabinet and Ministerial decisions.
• Not have elected to be subject to the standard corporate tax rules.
• Comply with the arm's length principle and keep transfer pricing documentation.
• Maintain audited financial statements.
• Keep non-qualifying revenue within the de minimis limit: the lower of AED 5,000,000 or 5% of total revenue.

Whether a particular zone counts for these purposes is a separate question. DMCC states on its own site that it is a qualified free zone; for other zones, including IFZA, Meydan and RAKEZ, the status is not stated on the pages we read and should be checked against the Cabinet and Ministry of Finance lists. A QFZP is not entitled to the AED 375,000 0% band, so a small free zone company with mostly non-qualifying income can end up paying more than a mainland company with the same profit.

VAT was introduced on 1 January 2018 at 5%. The FTA states that a business must register if the total value of its taxable supplies and imports exceeded the mandatory registration threshold of AED 375,000 over the previous 12 months, or is expected to exceed it in the next 30 days. That threshold does not apply to foreign businesses. Voluntary registration is available above AED 187,500. Non-resident businesses making taxable supplies in the UAE must register even below the threshold unless another party in the UAE is responsible for the VAT.

Two practical points from the FTA's service card: branches of one entity register under a single tax registration number, as do sole establishments belonging to one natural person; and businesses in designated zones are assessed case by case, because designated-zone treatment depends on the nature of the activities. Excise tax is a separate regime and is not covered here.

The UAE Government portal states that the Economic Substance Regulations require companies on the mainland and in free zones that carry out relevant activities to maintain an adequate economic presence and to file an annual notification and an economic substance report within 12 months from the end of the financial year. The Ministry of Finance page lists Cabinet Resolution No. 98 of 2024 among the instruments; its effect on current filing duties is not stated on the pages we read, so check before relying on any statement that filings have ended. Beneficial-ownership records are required by registries and zones; DMCC, as an example, records individuals with 25% or more ownership or control. The anti-money-laundering framework is Federal Decree-Law No. 10 of 2025, with the Ministry of Economy and Tourism supervising designated non-financial businesses.

This page tells you what the FTA and the Ministry of Finance require; it does not compute your tax. If you are choosing between a mainland and free zone structure partly for tax reasons, read the comparison page, then have a registered tax agent review the qualifying-income question before you commit. We can coordinate that review alongside the formation.