UAE Corporate Tax FAQ: 20 most-asked questions answered.

Basics: rate, scope, and registration

These are the questions every UAE business owner asks first.

• Q1: What is the UAE Corporate Tax rate? — 9% on taxable income above AED 375,000. The first AED 375,000 is taxed at 0%. Free zone QFZPs pay 0% on qualifying income and 9% on non-qualifying income.
• Q2: When did UAE CT start? — Financial years starting on or after 1 June 2023. A calendar-year business (1 Jan–31 Dec) had its first CT year from 1 January 2024 to 31 December 2024.
• Q3: Does my business need to register even if it makes no profit? — Yes. CT registration on EmaraTax is mandatory for all UAE taxable persons regardless of revenue or profit. Penalty for not registering: AED 10,000.
• Q4: I have a VAT TRN — am I already registered for CT? — No. VAT and CT are separate registrations on EmaraTax. You need to initiate a new CT registration and receive a separate CT TRN.
• Q5: Does CT apply to sole traders and freelancers? — Only if their total annual business income exceeds AED 1 million. Below AED 1 million, natural persons are not in scope. Employment income, dividends, and personal rental income are excluded.

Small Business Relief and free zones

• Q6: What is Small Business Relief? — A 0% CT election available to businesses with revenue ≤ AED 3 million. The election is made annually on the CT 300 return. Transfer pricing rules still apply.
• Q7: When does SBR end? — The last eligible period must end on or before 31 December 2026. A calendar-year business can elect SBR for FY 2026 (due 30 September 2027), but not FY 2027.
• Q8: Does SBR exempt me from filing a CT return? — No. You must still register, file the CT 300 annually, and elect SBR on that return. The filing obligation remains — SBR just makes the CT liability nil.
• Q9: My company is in a free zone — do I pay CT? — If you meet QFZP conditions (substance, de minimis, audited accounts, qualifying income), 0% on qualifying income. Non-qualifying income (including mainland UAE sales) is taxed at 9%. Being in a free zone is not a blanket exemption.
• Q10: What is the de minimis test for QFZPs? — Non-qualifying income must not exceed AED 5 million or 5% of total revenue (whichever is lower). Breaching this for one dirham forfeits QFZP status for the entire period.

Filing, computation, and deadlines

• Q11: When is the CT return due? — 9 months after the financial year end. Calendar-year FY ending 31 Dec 2024 → due 30 September 2025. FY ending 31 March 2025 → due 31 December 2025.
• Q12: What financial statements do I need? — IFRS or IFRS for SMEs. Revenue > AED 50 million: audited financial statements required. Below AED 50 million: reviewed statements acceptable. All QFZPs: audited required.
• Q13: Are entertainment expenses deductible? — 50% deductible. Business meals, client hospitality, and events are subject to a 50% cap. Employee-only events may qualify for 100% if properly documented.
• Q14: Can I carry forward a CT loss? — Yes, indefinitely. But in any future profitable year, carried-forward losses can only offset up to 75% of that year’s taxable income — the remaining 25% is always taxed.
• Q15: Are dividends from my subsidiary taxable? — Dividends from qualifying shareholdings (≥5%, held ≥12 months, subsidiary taxed ≥9%) are exempt under the participation exemption. You must claim the exemption on the CT 300.

Transfer pricing and groups

• Q16: Do I need transfer pricing documentation? — If you have any related-party transactions, you must file the TP Disclosure Form with your CT return. Local File documentation is required if related-party transactions exceed AED 40 million.
• Q17: Our parent charges us a management fee — is it deductible? — Only at arm’s length. If FTA determines the fee exceeds what an independent party would charge, the excess is added back to taxable income.
• Q18: Can group companies share losses? — Only within a CT Tax Group (95% ownership). Members of the group file one consolidated CT return and losses automatically offset profits across members.
• Q19: Does Pillar Two apply to my business? — Only if your MNE group has consolidated global revenue ≥ €750 million. UAE is implementing a QDMTT (15% minimum) for in-scope groups from FY 2025.
• Q20: What is the penalty for late CT return filing? — AED 500 per month for the first 12 months, then AED 1,000 per month. Plus 14% per annum on any unpaid CT (from 14 April 2026).