The United Arab Emirates introduced Corporate Tax (CT) effective from June 1, 2023, marking a significant shift in the country's tax landscape. With a standard rate of 9% on taxable income exceeding AED 375,000, businesses across the UAE must now navigate new compliance obligations, tax planning opportunities, and strategic considerations.
Ashfaq and Associates provides comprehensive Corporate Tax services to help businesses understand their obligations, optimize their tax positions, and maintain full compliance with Federal Tax Authority (FTA) regulations. Whether you're a mainland company, free zone entity, or multinational corporation, our expertise ensures you're prepared for this new era of taxation in the UAE.
Corporate Tax affects diverse aspects of business operations—from accounting policies and transfer pricing to group structuring and free zone benefits. Our team stays current with all FTA guidance, ministerial decisions, and cabinet resolutions to provide you with accurate, timely advice that protects your interests while ensuring compliance.
Understanding UAE Corporate Tax
Key Features of UAE Corporate Tax:
- •9% standard rate on taxable income above AED 375,000
- •0% rate on taxable income up to AED 375,000 (small business relief)
- •Qualifying Free Zone Persons may benefit from 0% tax on qualifying income
- •Financial year alignment — tax periods based on your financial year
- •Transfer pricing rules for related party transactions
- •Loss carry-forward provisions and group relief mechanisms
Our Corporate Tax Services
1. Corporate Tax Registration
Mandatory registration with the Federal Tax Authority is required for all UAE businesses subject to Corporate Tax. We handle the entire registration process, ensuring timely compliance and accurate submission of required information.
- CT registration for mainland and free zone companies
- Tax group registration for related entities
- Determination of tax residency status
- Permanent establishment analysis for foreign companies
- Registration timeline planning and execution
2. Corporate Tax Compliance & Return Filing
Annual Corporate Tax returns must be filed within 9 months of your financial year-end. We prepare comprehensive tax computations, ensure proper documentation, and submit returns that withstand FTA scrutiny.
- Tax computation and taxable income calculation
- Annual CT return preparation and filing
- Reconciliation between accounting profit and taxable profit
- Tax payment planning and installment arrangements
- Advance tax planning and estimated tax payments
3. Tax Planning & Optimization
Strategic tax planning can legally minimize your Corporate Tax liability while ensuring compliance. We analyze your business structure, transactions, and operations to identify optimization opportunities.
- Business restructuring for tax efficiency
- Small business relief eligibility assessment
- Deduction and relief optimization
- Capital vs. revenue expenditure classification
- Timing strategies for income and expenses
- Loss utilization and carry-forward planning
4. Free Zone Tax Optimization
Qualifying Free Zone Persons can benefit from 0% Corporate Tax on qualifying income, provided specific conditions are met. We help you understand and maintain compliance with these beneficial regimes.
- Qualifying Free Zone Person status assessment
- Qualifying income vs. excluded income analysis
- De minimis requirements and safe harbor tests
- Substance and economic activity requirements
- Free zone election and annual confirmations
- Mainland income segregation and tracking
5. Transfer Pricing Documentation
Related party transactions must comply with arm's length principles. We prepare comprehensive transfer pricing documentation to defend your pricing policies and ensure compliance with UAE transfer pricing regulations.
- Transfer pricing policy development
- Master file and local file preparation
- Functional and economic analysis
- Benchmarking studies and comparability analysis
- Intercompany agreements and documentation
- Country-by-Country Reporting (CbCR) compliance
6. Group Relief & Tax Consolidation
UAE Corporate Tax law allows group relief mechanisms where taxable profits and losses can be transferred between qualifying group companies. We structure these arrangements for maximum benefit.
- Qualifying group assessment
- Tax group formation and registration
- Loss transfer and profit allocation strategies
- Intra-group transaction planning
- Joint filing elections where applicable
7. Corporate Tax Advisory & Strategy
Beyond compliance, we provide strategic advisory on how Corporate Tax impacts your business decisions—from M&A and investments to expansion and restructuring.
- Impact assessment for new business ventures
- M&A tax due diligence and structuring
- Withholding tax obligations and treaty planning
- Nexus and permanent establishment analysis
- Tax impact of debt vs. equity financing
- Exit planning and business sale tax considerations
Why Choose Our Corporate Tax Services?
Early Adopters & Experts
We've been preparing clients for Corporate Tax since its announcement, with deep knowledge of all FTA guidance and updates.
Practical Solutions
We provide actionable, business-friendly advice—not just theoretical compliance. Our goal is optimization, not just obligation.
Integrated Approach
Corporate Tax doesn't exist in isolation. We coordinate with your accounting, VAT, and business operations for holistic tax management.
Future-Proof Strategy
As regulations evolve, we keep you ahead with proactive planning and continuous monitoring of FTA updates.
Who Needs Corporate Tax Services?
Corporate Tax applies to:
- ✓UAE Mainland Companies — LLCs, branches, and other business entities
- ✓Free Zone Companies — subject to conditions (qualifying vs. non-qualifying income)
- ✓Foreign Companies — with UAE permanent establishments or UAE-sourced income
- ✓Natural Persons — conducting business activities in the UAE (with certain exemptions)
Exemptions include government entities, qualifying public benefit organizations, and certain natural resource extraction businesses.
Frequently Asked Questions
When did Corporate Tax become effective in UAE?
Corporate Tax became effective on June 1, 2023, for financial years starting on or after this date. If your financial year began before June 1, 2023, Corporate Tax applies from your next financial year. For calendar year companies, this means tax applies from January 1, 2024.
What is the small business relief?
Businesses with revenue not exceeding AED 3 million can elect for small business relief, which provides a 0% tax rate on taxable income up to AED 375,000. This significantly benefits small enterprises and startups. We help determine eligibility and make the election.
Are free zone companies exempt from Corporate Tax?
Not automatically. Free zone companies can be "Qualifying Free Zone Persons" and benefit from 0% tax on qualifying income if they meet specific conditions including adequate substance, separate accounting, and compliance with transfer pricing. Non-qualifying income (e.g., from UAE mainland) is taxed at 9%.
When do I need to file my first Corporate Tax return?
Tax returns must be filed within 9 months of your financial year-end. For a December 31 year-end with CT starting January 1, 2024, your first return is due by September 30, 2025. We recommend starting preparation early to ensure accuracy and timely filing.
What are the penalties for non-compliance?
Penalties include fines for late registration (AED 10,000), late filing (AED 500-5,000 depending on delay), and late payment (varying penalties). Additionally, incorrect returns can attract significant penalties. Proactive compliance is essential to avoid these costs.
Ready for Corporate Tax Compliance?
Let's ensure your business is fully prepared for UAE's Corporate Tax regime.
Schedule a CT Consultation