Navigating UAE Corporate Tax: Deadlines, Exemptions, and Penalties

Corporate Tax is here! Learn the key filing dates, who qualifies for relief, and how to avoid penalties under the UAE’s new tax regime.

September 17, 20250 min
UAE
Corporate Tax
compliance

With the first Corporate Tax deadline around the corner, we put together the most important points to keep in mind. Reach out if you have any questions!

Navigating UAE Corporate Tax: Deadlines, Exemptions, and Penalties

With the first Corporate Tax fast approaching, we wanted to share some key details to help you stay compliant.

Implementation Date: June 1, 2023

Tax Rate: 9% on profits above AED 375,000

Filing Deadline: Within 9 months of financial year-end (e.g. September 30, 2025 for companies with Dec. 31 year-end)

  • Companies with their first operational year in 2024 will likely need to file both 2024 and 2025 taxes together in 2026. If you're unsure, the filing deadline will be visible upon registration.

Exceptions:

  • Qualifying free zone companies: Companies that already have a 0% tax rate on qualifying income. Key industries include: manufacturing, logistics/warehousing, fund/wealth management services, headquarters services, natural resource businesses.
  • Small businesses that qualify under Small Business Relief.

Small Business Relief (SBR)

  • Businesses with under AED 3,000,000 in revenue pay no tax until Dec. 31, 2026.
  • Even if a company’s net profit exceeds the AED 375,000 limit, if revenue is not above AED 3,000,000, then no tax is owed.
  • Cash accounting is accepted under this, and the submission process is significantly simpler.
  • Claiming SBR is straightforward and can be done during the tax submission process on the FTA’s EmaraTax Portal.

Requirements:

  • Audited financial statements are required for companies with AED 50M+ in revenue. All qualifying free zone companies regardless of revenue must also have audited financials.
  • All businesses must maintain detailed financial records for at least 7 years — even those electing SBR. This includes documents like: trade licenses, financial statements, general ledgers, and bank statements.

Penalties:

Late registration for Corporate Tax

  • AED 10,000 penalty (deadline was Dec. 31, 2024 for companies active in 2024 or earlier)
  • New companies must register within 3 months of incorporation

Late filing of Corporate Tax Returns

  • AED 500 for every late month (first 12 months)
  • AED 1000 for every late month (after the initial 12 months)

Unpaid/Underpaid Corporate Tax Amounts

  • Monthly penalty of ~1.1% on outstanding amounts (14% annually, applied monthly)

Lack of accurate financial and tax records

  • First offense: AED 10,000
  • Repeat offense within 24 months: AED 20,000
  • All companies, regardless of size, should keep accurate records for the last seven years

If you’re a UAE-registered company and have questions, please reach out!

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