UAE corporate tax: registration, relief and penalties in 2026
Every company registers, returns are due within nine months, Small Business Relief ends after 2026 and a new penalty framework applies from April 2026. Here is the compliance cycle and how to stay out of trouble.
Everyone, including those who pay nothing
Corporate tax under Federal Decree-Law No. 47 of 2022 applies to financial years starting on or after 1 June 2023. Every juridical person incorporated or effectively managed in the UAE is a taxable person and must register with the Federal Tax Authority (FTA) through the EmaraTax platform, whether it is a mainland company, a free zone company claiming 0%, a dormant company or a company electing Small Business Relief. Foreign companies with a permanent establishment or a nexus in the UAE, and individuals whose UAE business turnover exceeds AED 1 million, must also register.
Registration deadlines were set by FTA decision and depend on when the company was licensed and on its financial year. For new companies, the practical rule is to register as soon as the licence is issued and the first financial year is known. Late registration carries a fixed penalty of AED 10,000, regardless of whether any tax is due.
Rates, relief and the main adjustments
| Item | Position |
|---|---|
| Rate on taxable income up to AED 375,000 | 0% |
| Rate on taxable income above AED 375,000 | 9% |
| Qualifying Free Zone Person | 0% on qualifying income, 9% on other taxable income |
| Groups with EUR 750m+ revenue | 15% domestic minimum top-up tax from 2025 |
| Small Business Relief | Revenue up to AED 3 million can be treated as having no taxable income, for tax periods ending on or before 31 December 2026 |
| Exempt income | Qualifying dividends and capital gains on qualifying participations, subject to conditions |
| Interest | Net interest expense deductible up to 30% of adjusted EBITDA, with a de minimis threshold |
| Losses | Carried forward and set against up to 75% of taxable income in later periods, subject to ownership continuity |
The relief is available only for tax periods ending by 31 December 2026, and not to QFZPs or members of large multinational groups. Companies that have relied on it should plan for ordinary taxation, and for the compliance that comes with it, from 2027.
Returns, payment and records
Tax period
Usually the financial year, typically 12 months, aligned with the accounts.
Return and payment
The corporate tax return is filed and the tax paid within nine months of the end of the tax period: for a December 2025 year-end, by 30 September 2026.
Financial statements
Accounts prepared under IFRS; audited accounts are required for companies with revenue above AED 50 million and for every QFZP.
Transfer pricing
Related-party transactions at arm's length; a disclosure form with the return, and a Master File and Local File where the company's revenue is AED 200 million or more or its group's AED 3.15 billion or more, under Ministerial Decision No. 97 of 2023.
Records
Books and supporting documents kept for at least seven years after the end of the tax period.
Deregistration
A company that ceases business must apply to deregister within the set period after cessation, after filing final returns.
Two Cabinet Decisions to know
Penalties for corporate tax sit in Cabinet Decision No. 75 of 2023, which introduced the corporate tax penalty table: AED 10,000 for late registration, monthly penalties for late filing of returns that rise after the first year of delay, and penalties for failures in record-keeping, notifications and transfer pricing disclosure. Alongside it, Cabinet Decision No. 129 of 2025, issued on 9 October 2025 and in force since 14 April 2026, rewrote the general administrative penalty framework under the tax procedures rules, which covers VAT and excise and the procedural side of tax administration. Its main changes are a time-based late payment charge in place of the old fixed percentages, and a clearer distinction between errors corrected by voluntary disclosure and errors found in an FTA audit, with lower penalties for those who correct first.
Advisers differ on exactly how far the 2026 framework reaches into corporate tax-specific penalties, so for any live case the current FTA position should be checked. Two points are not in doubt. Registration and filing deadlines are enforced automatically through EmaraTax. And voluntary disclosure, made before the FTA opens an audit, is consistently cheaper than waiting.
The FTA has run a waiver initiative under which the AED 10,000 late registration penalty can be waived or refunded for taxpayers that file their first return within seven months of the end of their first tax period. Availability has been time-limited, so confirm whether it applies to you before relying on it.
Reconsideration, committee, court
A taxpayer who disagrees with an FTA decision or penalty first applies to the FTA for reconsideration within the set period, with reasons and evidence. If the outcome is unsatisfactory, the taxpayer can object to the Tax Disputes Resolution Committee, and then appeal to the competent federal court. Some stages require the disputed tax or penalty to be paid before the case proceeds, so the cash consequences of a dispute should be planned from the start.
As elsewhere in the Gulf, the strongest position is built before any dispute: a return that reconciles to audited accounts, a transfer pricing file that supports related-party pricing, and a clear record of how QFZP or relief positions were assessed.
A small consultancy, before and after 2026
A mainland consultancy with revenue of AED 2.4 million and profit of AED 700,000 elects Small Business Relief for its 2025 tax period. It registers, files a return by 30 September 2026 and pays no corporate tax, because the relief treats it as having no taxable income. From 2027, the relief is no longer available. On the same profit, it will pay 0% on the first AED 375,000 and 9% on AED 325,000: about AED 29,250 a year, plus the cost of preparing a full computation.
The tax is modest. The risk is procedural: a company that has never prepared a full computation, never reviewed its related-party transactions and never kept records with corporate tax in mind will find 2027 harder than it needs to be. The time to set up proper bookkeeping, a chart of accounts aligned with the tax return and a related-party register is during 2026, while the relief still applies.
One set of books, three regimes
Corporate tax, VAT and the coming e-invoicing mandate draw on the same accounting data, and the FTA increasingly compares them. VAT registration is required once taxable supplies exceed AED 375,000, and the VAT law was amended from January 2026. E-invoicing begins in phases: companies with revenue of AED 50 million or more must appoint an accredited service provider by 31 July 2026 and go live by 1 January 2027; others by 31 March 2027 and 1 July 2027 respectively.
A company whose VAT returns, e-invoices and corporate tax return all come from one clean ledger is easy to audit. One that prepares each from a different spreadsheet is not, and that is where most penalties now come from.
Effective management, permanent establishment and nexus
UAE corporate tax reaches beyond companies incorporated in the UAE. A foreign company is treated as a UAE resident if it is effectively managed and controlled in the UAE, meaning the key management and commercial decisions are in substance made there, typically where the board meets and decides. A foreign group that runs its business from Dubai through directors living there, while the company is incorporated abroad, should test this carefully, because residence brings full UAE taxation of worldwide income, subject to treaties.
A non-resident company is taxable on income attributable to a permanent establishment in the UAE, such as a fixed place of business or a dependent agent who habitually concludes contracts on its behalf, and on income from UAE immovable property, which creates a nexus. The practical risks mirror those in Saudi Arabia and Qatar: staff based in the UAE selling for a foreign entity, or projects carried out on site for extended periods. A foreign company that crosses these lines must register with the FTA, and failing to do so carries the same AED 10,000 late registration penalty as for a UAE company, plus the tax itself. The cleaner answer for a sustained UAE presence is usually a UAE entity.
Questions we get asked first
Does every UAE company need to register for corporate tax?
Yes. Every company incorporated or effectively managed in the UAE must register with the FTA, including free zone companies claiming 0%, dormant companies and companies claiming Small Business Relief.
What is the UAE corporate tax rate?
0% on taxable income up to AED 375,000 and 9% above, with 0% on qualifying income for Qualifying Free Zone Persons and a 15% minimum for groups with EUR 750m+ revenue.
When does Small Business Relief end?
It applies only to tax periods ending on or before 31 December 2026, for resident companies with revenue up to AED 3 million that are not QFZPs or members of large multinational groups.
When is the UAE corporate tax return due?
Within nine months of the end of the tax period, together with payment: for a December year-end, by 30 September of the following year.
What is the penalty for late corporate tax registration?
AED 10,000, under Cabinet Decision No. 75 of 2023, regardless of whether tax is due. A waiver has been available in some cases for first-time filers who file on time.
What changed on 14 April 2026?
Cabinet Decision No. 129 of 2025 came into force, rewriting the general administrative penalty framework, including a time-based late payment charge and lower penalties for voluntary disclosure.
Register, file on time, and prepare for 2027
UAE corporate tax is modest in rate and strict in procedure. Register even if you owe nothing, file within nine months, keep audited accounts and transfer pricing files where required, correct errors by voluntary disclosure, and use 2026 to prepare for the end of Small Business Relief and the start of e-invoicing.
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This article is general information, current as of 2026, and is not advice for any specific situation. Confirm current rules with the MOIC, the NBR or the relevant authority before acting.