Every UAE general trading company, mainland or free zone, must register for Corporate Tax and file a return even if it traded nothing. Tax is 9% on taxable income above AED 375,000, and a 31 December 2025 year end must be filed by 30 September 2026. Free zone traders pay 0% only on qualifying income and lose it if mainland and other non-qualifying sales pass the lower of AED 5M or 5% of revenue.
- You import and resell goods through a mainland general trading LLC
- You trade from JAFZA, DMCC, SAIF Zone or another free zone and sell into the mainland
- You buy from a parent, sister or family-owned company at prices you set between you
- You pay suppliers in USD, EUR or CNY and hold stock at year end
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Does a general trading company have to register for Corporate Tax?
Yes: registration and an annual return are compulsory for every trading company in the UAE, including a newly licensed free zone LLC with no shipments yet. The route you take through the return is what differs, depending on where you are licensed and who you sell to.
Here is how common trading setups line up, as of September 2026.
Trading edge cases worth checking
- Import VAT counts: imports are added to taxable supplies for the AED 375,000 VAT test, so a new importer can need VAT registration before its first local sale.
- Back-to-back trades: goods bought in China and shipped straight to a buyer in Africa still create revenue, cost and profit in the UAE company’s books.
- Dormant licence: a trading company that bought nothing all year still files, usually a zero-revenue return.
| Trading setup | Corporate Tax position | VAT position |
|---|---|---|
| Mainland general trading LLC | Register and file; 0% to AED 375,000 of taxable income, 9% above | Register once taxable supplies and imports pass AED 375,000; voluntary from AED 187,500 |
| Free zone trader selling abroad or to other free zone companies | May be a Qualifying Free Zone Person on qualifying income if every condition is met | Goods inside a designated zone can be outside VAT; services never are |
| Free zone trader with substantial mainland sales | Non-qualifying income above the lower of AED 5,000,000 or 5% of revenue means 9% for that period and the next four | Same thresholds |
| Trading company with revenue up to AED 3,000,000 | Small Business Relief can be elected, but not by a Qualifying Free Zone Person | Same thresholds |
| Trading as an individual’s sole establishment | Only once business turnover passes AED 1,000,000 in a calendar year | Same thresholds |
For the VAT side of free zone trading, see VAT for companies trading from free zones and our guide to designated zones under UAE VAT.
How landed cost and stock valuation drive a trader's taxable profit
For a trader, gross margin is only as accurate as the cost sitting in closing stock. Landed cost is the supplier price plus every cost of bringing goods into saleable condition: freight, insurance, customs duty, clearing and inbound handling. If those are expensed when paid instead of added to stock, profit is understated in the year of import and overstated when the goods sell.
Stock held at year end is normally carried at the lower of cost and net realisable value, so slow-moving or obsolete lines need writing down with evidence.
Building landed cost for one container
| Cost element | Illustrative amount | In stock cost? |
|---|---|---|
| Supplier invoice (converted to AED) | AED 184,000 | Yes |
| Ocean freight and insurance | AED 9,500 | Yes |
| Customs duty | AED 9,200 | Yes |
| Clearing agent and port handling | AED 3,300 | Yes |
| Import VAT, where recoverable | Recovered through the VAT return | No |
| Landed cost of the container | AED 206,000 | Spread over units received |
Obsolete and slow-moving stock
Electronics that lose value when a new model lands, spare parts for discontinued machines and seasonal goods left after the season all need a year-end review. Write them down to what they can realistically be sold for, and keep the ageing report, recent selling prices or clearance offers that justify the figure. A round-number provision with no workings is difficult to support if the FTA asks.
The methods are explained in UAE inventory accounting: valuation, VAT and Corporate Tax.
FX differences, related-party purchases and free zone status for traders
Three trading-specific issues move taxable income without a single extra sale: currency movements on supplier balances, the prices agreed with connected companies, and whether free zone income is qualifying.
Foreign exchange gains and losses
Because the dirham is pegged to the US dollar, USD invoices move very little, but EUR, GBP, CNY and INR balances can swing sharply between invoice date and payment. Realised differences on settled invoices, and revaluation of open supplier and customer balances at year end, both flow into accounting profit. Ignoring them leaves the books out of line with the bank and makes the return harder to support.
| Situation | Result in the books |
|---|---|
| EUR supplier invoice paid when the euro is stronger than on the invoice date | Realised FX loss |
| EUR payable still open at year end, euro weaker than on invoice date | Unrealised FX gain on revaluation |
| INR receivable from an Indian buyer, rupee weakens before collection | Realised FX loss |
| USD invoices only | Small or no differences |
Buying from group or family companies
Purchases from a parent abroad, a sister company in another emirate or a relative’s business must be priced as if the parties were independent. The Corporate Tax return carries a transfer pricing disclosure for connected and related party transactions, while a full master file and local file are required only at AED 200,000,000 of entity revenue or AED 3.15 billion of group revenue.
Over-paying a family supplier moves profit out of the UAE company and is exactly what arm’s length rules correct. Keep price lists, third-party quotes or margin comparisons on file; our transfer pricing documentation guide sets out what to prepare.
Free zone trading: qualifying or non-qualifying?
A free zone trader can pay 0% as a Qualifying Free Zone Person, but it needs adequate substance, audited financial statements, arm’s length pricing, no election for the standard rate and non-qualifying revenue within the lower of AED 5,000,000 or 5% of total revenue. Sales to mainland customers and to individuals are generally non-qualifying.
One failed test puts the company on 9% for that period and the following four. Our QFZP guide covers the conditions, and JAFZA-based traders can read Corporate Tax and VAT for JAFZA companies.
Commission agents and trade finance
Commissions paid to sales agents who introduce buyers are deductible business costs when backed by an agency agreement, an invoice and a traceable payment; cash handed over with no paperwork is not easy to defend. Letter of credit charges, performance bond fees and trade finance interest are also costs of the business, and the general interest limitation rules in the Corporate Tax Law are mainly a concern for traders with large net interest costs. See bank and trade finance for SMEs for how facilities are structured.
How a trading company prepares and files its Corporate Tax return
Most of the work is closing stock and supplier balances properly; the EmaraTax return itself is the last hour.
Count and value closing stock
Physically count every warehouse and any goods in transit at year end. Value them at landed cost and write down obsolete or damaged lines to realisable value.
Complete landed cost for the year's imports
Match bills of entry, freight and clearing invoices to each shipment so duty and freight sit in stock or cost of sales, not in general expenses.
Revalue foreign currency balances
Record realised FX differences on settled invoices and revalue open EUR, CNY and other balances at year-end rates.
Schedule related-party transactions
List every purchase, sale, loan or fee with connected persons, with the prices used and the evidence that they are arm’s length.
Split qualifying and non-qualifying income if in a free zone
Separate sales to foreign and free zone buyers from mainland and individual customers, and test the lower of AED 5,000,000 or 5% cap.
Prepare financial statements and choose the tax route
Finalise the accounts, get them audited where required, and decide between QFZP, Small Business Relief (revenue up to AED 3,000,000) and the standard 9% calculation.
File and pay on EmaraTax by 30 September 2026
Enter the figures and transfer pricing disclosure in the Corporate Tax return, submit, pay any tax and save the acknowledgement.
Documents a trading company needs for its return
Traders are judged on their paper trail from supplier to customer. Keep all of this for 7 years.
- Supplier invoices, purchase orders and packing lists for every shipment
- Bills of entry, customs duty receipts, freight and clearing invoices
- Year-end stock count sheets, stock ageing report and valuation workings
- Sales invoices, delivery notes and export or re-export documents
- Bank statements in every currency and FX revaluation workings
- Related-party agreements, price comparisons and a list of connected persons
- Commission agent agreements, invoices and payment records
- Letters of credit, trade finance statements and loan agreements
- Free zone licence, lease, staff list and audited financial statements if claiming QFZP status
Corporate Tax, VAT and e-invoicing dates for traders
The next date with a penalty attached is 30 September 2026 for traders with a December year end. The rest of the calendar, as of September 2026:
| Date | Obligation | Traders affected |
|---|---|---|
| 30 September 2026 | 2025 Corporate Tax return and payment | 31 December 2025 year ends |
| 30 October 2026 | Appoint an e-invoicing Accredited Service Provider | Traders with revenue of AED 50,000,000 or more |
| 28th of the month after each VAT period | VAT 201 return and payment | VAT-registered traders |
| 31 December 2026 | Year-end stock count and FX revaluation | December year ends |
| 1 January 2027 | E-invoicing go-live | Traders with revenue of AED 50,000,000 or more |
| 31 March 2027 | Appoint an Accredited Service Provider | Traders under AED 50,000,000 revenue |
| 1 July 2027 | E-invoicing go-live | Traders under AED 50,000,000 revenue |
Corporate Tax penalties for trading companies in 2026
Trading companies face the Corporate Tax penalties in Cabinet Decision 75/2023 as amended, and the incorrect return penalty is the one stock and related-party errors most often trigger.
How a trader's penalties compound
Take a free zone trader that treated all income as qualifying, filed five months late and later finds mainland sales broke the cap. Late filing costs AED 2,500. Tax at 9% on the recalculated income then carries 14% a year from the due date, and the corrected return brings AED 500 or more plus 1% a month on the difference. The 9% rate also applies for the next four periods.
| Penalty | Amount | How traders trigger it |
|---|---|---|
| Late registration | AED 10,000, waived if the first return is filed within 7 months of the first period end | A free zone LLC with no trade yet that never registered |
| Late return | AED 500 a month for the first 12 months, then AED 1,000 a month | Stock count or audit not finished in time |
| Late payment | 14% a year, calculated monthly | Cash tied up in inventory at the deadline |
| Incorrect return | AED 500 or more, plus 1% a month on the tax difference | Overstated stock write-downs or non-arm’s length purchases |
| Records not kept | AED 10,000; AED 20,000 for a repeat within 24 months | Missing bills of entry or supplier invoices |
| Late deregistration | AED 1,000 a month, up to AED 10,000 | Cancelling a trading licence without deregistering |
All penalties are explained in our UAE Corporate Tax penalties guide.
Stock, FX or related-party pricing not settled before 30 September?
We will check your trading company's position and tell you which penalties are already running and what can still be fixed.
7 Corporate Tax mistakes general trading companies make
These come up again and again when we review trading company books.
- Stock never counted. Closing stock rolled forward from the software, with no physical count, cannot support cost of sales and leaves profit wrong in both directions.
- Related-party prices not at arm’s length. Buying from a family company above market shifts profit out of the UAE company; the FTA can adjust it and treat the return as incorrect.
- FX differences ignored. Leaving EUR and CNY balances at invoice rates means supplier ledgers never reconcile and profit is misstated.
- Freight and duty expensed instead of added to stock. Profit swings between years, and the year-end figures do not match landed cost records.
- Assuming a free zone licence covers mainland sales. Non-qualifying revenue above the cap means 9% for five periods.
- Paying commission agents in cash with no agreement. The cost is hard to prove and may be disallowed.
- Missing bills of entry. Without customs documents, imports and import VAT recovery are difficult to support.
How trading companies keep their Corporate Tax clean
A trading company’s routine should follow the goods: shipment, stock, sale, cash.
- Per shipment: file the bill of entry, freight and clearing invoices with the supplier invoice
- Monthly: reconcile supplier statements and bank accounts in every currency
- Monthly: post landed cost and review gross margin by product line
- Quarterly: cycle-count fast-moving and high-value stock
- Quarterly: review mainland versus qualifying sales if in a free zone
- Quarterly: file VAT 201 by the 28th
- Annually: full stock count, ageing review, FX revaluation and related-party price check
- By 30 September 2026: submit the return and pay, with the transfer pricing disclosure completed
Trading company late with its return or facing an FTA query?
Submit the return as soon as the stock figure is defensible, because the AED 500 monthly penalty keeps adding while you perfect it. Pay the tax you calculate to stop interest at 14% a year.
If you discover non-arm’s length purchases, omitted FX differences or a QFZP breach in a return already filed, a voluntary disclosure lets you correct it on your terms. A penalty decision can be challenged by reconsideration within 40 business days, then at the Tax Disputes Resolution Committee.
Our guides on acting after a missed Corporate Tax deadline and requesting FTA reconsideration or a waiver set out each step.
FTA query on your trading company?
Send us the notice and your last return, and a qualified accountant will set out the options within the 40 business day window.
Worked example: a Deira trading company with AED 2.4M revenue
Consider an illustrative Deira general trading LLC importing kitchen equipment from Italy and China, with AED 2,400,000 revenue in 2025 and a 31 December year end. Its draft accounts show AED 590,000 profit before two year-end adjustments.
| Item | Amount | Working |
|---|---|---|
| Draft profit | AED 590,000 | Before year-end review |
| Less: obsolete stock written down to realisable value | AED 52,000 | Discontinued models, supported by clearance price quotes |
| Less: FX loss on EUR supplier balances | AED 18,000 | Realised and year-end revaluation |
| Accounting profit | AED 520,000 | 590,000 minus 52,000 minus 18,000 |
| Option A: Small Business Relief (revenue within AED 3,000,000) | AED 0 tax | Return still due 30 September 2026 |
| Option B: 9% x (520,000 minus 375,000) | AED 13,050 | Taxable income above the band: AED 145,000 |
| Filed 4 months late | AED 2,000 | AED 500 x 4, on top of any tax |
Had the write-down been a round AED 150,000 with no support, the FTA could reverse it and treat the return as incorrect. Relief applies here because revenue is AED 2,400,000; Ministerial Decision 131 of August 2026 extended it to tax periods ending on or before 31 December 2029, as explained in our Small Business Relief guide.
DIY, freelance accountant or firm: who should file a trader's return?
The deciding factor for traders is whether someone checks stock, FX and related-party pricing before the numbers go in.
| Option | Cost | Owner time | Risk | Right for |
|---|---|---|---|---|
| Owner or in-house clerk | No external fee | High at year end | Unsupported stock, FX ignored | Small mainland traders with few currencies |
| Freelance accountant | Typical market range, often per hour or per return | Medium | Transfer pricing and QFZP tests may be skipped | Single-entity traders with simple supply chains |
| Accounting firm such as Paci | Fixed quote within 24 hours; bookkeeping from AED 599 a month | Low | Qualified accountant reviews stock, FX, related parties and free zone status | Importers, free zone traders, family groups |
Traders who want their year-end stock, FX and disclosure prepared and filed for an agreed fee can use our Corporate Tax filing service. Day-to-day books for importers are covered in accounting for trading companies.
What trading company owners actually ask us
Now that Corporate Tax is here, can a free zone trading company still sell B2B and B2C inside the UAE?
It can sell, but the tax result changes. Income from mainland customers and individuals is generally non-qualifying, and it must stay within the lower of AED 5,000,000 or 5% of revenue for the company to keep 0% on its qualifying income. Beyond that, the company pays 9% for that period and the next four.
Our Jebel Ali company buys goods from European manufacturers and sells them to a mainland UAE company. How is that taxed?
Sales to a mainland customer are generally non-qualifying income for a Qualifying Free Zone Person, so this flow counts toward the cap and can push the company onto 9%. Where goods move and how they are delivered can matter, so have the actual supply chain reviewed before relying on 0%.
We have Corporate Tax registration but no VAT registration, and our supplier wants to ship DDP to Dubai under their own importer code. Is that a problem?
Remember that imports count toward the AED 375,000 VAT threshold together with taxable supplies. Whose name appears as importer affects the VAT and customs record for those goods, so review the DDP terms with your accountant before the first shipment rather than after.
Will e-invoicing expose the invoice problems we fix by hand, and when do we need to be ready?
Traders under AED 50,000,000 revenue must appoint an Accredited Service Provider by 31 March 2027 and go live on 1 July 2027; those at AED 50,000,000 or more appoint by 30 October 2026 and go live on 1 January 2027. Tax invoices are already due within 14 days of supply, so clean customer data now. See e-invoicing for SMEs.
I have just set up a free zone LLC as sole manager with no trading yet. How do I register it for Corporate Tax?
Register it on EmaraTax as a legal person, even with no activity, because every UAE company must register whatever its revenue. It then files a return every year, including zero-revenue years. Our EmaraTax registration walkthrough shows the screens.
Frequently asked questions
What Corporate Tax rate does a general trading company in Dubai pay?+
0% on taxable income up to AED 375,000 and 9% on the rest. A free zone trader that meets every Qualifying Free Zone Person condition pays 0% on qualifying income, and a trader with revenue up to AED 3,000,000 can elect Small Business Relief instead.
Do import and export companies in the UAE file a Corporate Tax return?+
Yes, every year, whether they import, export or re-export, and even in a year with no shipments. For VAT on the export side, see zero-rating rules for exports, and for imports VAT on imports and customs.
Is customs duty part of inventory cost for Corporate Tax?+
Customs duty paid to bring goods into the UAE is normally part of landed cost, so it sits in stock until the goods are sold and then becomes cost of sales. Recoverable import VAT is not added to stock cost.
Does a small trading company need transfer pricing documentation?+
A full master file and local file apply only at AED 200,000,000 entity revenue or AED 3.15 billion group revenue. Smaller traders still need arm’s length prices with connected persons and the disclosure form with the return, backed by evidence.
Which VAT return boxes cause problems for trading companies?+
Imports under reverse charge, re-exports and designated zone movements are the usual errors. Our guide to VAT return filing for general trading companies walks through the boxes that trigger penalties.
Are phone and electronics traders treated differently for Corporate Tax?+
The Corporate Tax rules are the same, but electronics traders add fast stock obsolescence and VAT reverse charge on phones for resale. See our guide on Corporate Tax for mobile phone and electronics traders.
When is the Corporate Tax return due for a trading company?+
Nine months after its financial year ends, so 30 September 2026 for a 31 December 2025 year end. Late filing costs AED 500 a month for the first year. More in our Corporate Tax return filing guide.
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- FTA: Registration for VAT
- FTA: Waiver of penalties
- FTA: Small Business Relief Corporate Tax Guide (CTGSBR1)
- Ministry of Finance: Decision on Small Business Relief
Checked against these sources on 15 September 2026. This guide is general information for UAE businesses, not advice on your specific facts.