A practical guide to managing tax obligations in the UAE

The UAE corporate tax regime applies to businesses operating in the UAE, subject to the relevant legislation and exemptions.

Corporate tax currently applies at:

• 0% on taxable income up to AED375,000
• 9% on taxable income exceeding AED375,000

Certain free zone entities may benefit from a 0% rate on qualifying income, subject to meeting the applicable conditions and requirements. Businesses should assess their corporate tax position based on their activities, legal structure, income and other relevant circumstances. 

The corporate tax regime can apply to a range of businesses and entities, including:

• UAE-incorporated companies and other legal entities
• UAE branches of foreign companies
• Certain individuals conducting business activities in the UAE
• Foreign entities with a taxable presence in the UAE

The applicability of corporate tax depends on the nature and circumstances of the business.

Businesses that fall within the scope of UAE corporate tax may have registration, filing and record-keeping obligations.

Key considerations include:

• Determining whether the business is subject to corporate tax
• Corporate tax registration
• Assessing taxable income
• Maintaining appropriate accounting and tax records
• Preparing and submitting corporate tax returns
• Meeting payment deadlines
• Assessing available exemptions, reliefs and incentives
• Maintaining supporting documentation

Effective tax compliance requires businesses to understand their obligations and maintain appropriate processes and records from the outset.

Free zones remain an important part of the UAE business landscape. However, establishing a business in a free zone does not automatically mean that all income will benefit from a 0% corporate tax rate.

Businesses should assess whether they meet the applicable requirements for qualifying income and other conditions under the UAE corporate tax regime. The tax treatment of a free zone entity depends on its activities, income, structure and compliance with the relevant requirements.

VAT applies at the standard rate of 5% on most goods and services in the UAE. Businesses that meet the applicable registration threshold may be required to register for VAT and comply with ongoing reporting obligations.

Key VAT considerations:

• VAT registration
• Mandatory and voluntary registration
• Tax invoices
• VAT treatment of goods and services
• Input VAT recovery
• VAT returns and payments
• Record keeping
• Imports and exports
• Cross-border transactions 

Understanding the VAT treatment of transactions can help businesses manage cash flow, pricing and compliance requirements effectively.

Businesses that are part of a multinational group or have transactions with related parties should consider the UAE transfer pricing requirements.

Key areas may include:

• Identifying related-party transactions
• Applying the arm's length principle
• Transfer pricing documentation
• Intercompany agreements
• Transfer pricing disclosures
• Supporting the pricing of related-party transactions

Businesses should consider transfer pricing requirements when establishing their operating and intercompany structures.

Businesses operating across multiple jurisdictions may need to consider the UAE's international tax framework alongside the tax rules of other countries.

Areas that may require consideration include:

• Double tax treaties
• Cross-border transactions
• Permanent establishment
• Withholding taxes in other jurisdictions
• International group structures
• Tax residency
• Global minimum tax considerations, where applicable

Understanding the interaction between UAE tax rules and overseas requirements can help businesses manage cross-border tax risks and support effective planning.

Tax compliance is an ongoing responsibility. Businesses should establish appropriate processes to identify, monitor and meet their tax obligations.

Our specialists can support businesses with:

• Tax registrations
• Tax return preparation and filing
• Tax compliance reviews
• Tax health checks
• Tax accounting
• Transfer pricing compliance
• Tax documentation
• Tax authority correspondence
• Tax risk management

Tax considerations can influence decisions throughout the business lifecycle, from choosing a business structure and entering the UAE market to expanding operations or restructuring.

Businesses may benefit from considering tax implications when:

• Establishing a new business
• Selecting a mainland or free zone structure
• Expanding operations
• Entering into related-party arrangements
• Undertaking transactions across borders
• Restructuring the business
• Acquiring or disposing of assets or businesses
• Planning for future growth 

Tax planning should be aligned with the commercial objectives and substance of the business and comply with applicable legislation.

The UAE Domestic Minimum Top-up Tax applies for financial years beginning on or after 1 January 2025 to UAE Constituent Entities of multinational enterprise groups with annual consolidated global revenue of EUR 750 million or more in at least two of the four financial years immediately preceding the relevant financial year.

In-scope groups should assess the impact of the UAE DMTT, including registration, compliance and potential top-up tax exposure when establishing or restructuring UAE operations.

The UAE is introducing eInvoicing as part of its ongoing digitalisation of the tax and business environment. Businesses will need to consider how the requirements affect their invoicing processes, accounting systems, data flows and tax compliance procedures.

Preparing early can help businesses assess technology requirements, identify process changes and support a smoother transition to the new eInvoicing framework.

Our tax advisory team supports businesses with practical advice across the UAE tax landscape, helping them understand their obligations, manage compliance requirements and address tax considerations as their business evolves.

Our services include:

• Corporate tax advisory and compliance
• VAT advisory and compliance
• Transfer pricing
• International tax
• Tax registrations
• Tax health checks
• Tax reporting and compliance
• Tax planning
• Tax risk management
• Tax authority support
• Transaction and restructuring tax advice

Through our multidisciplinary approach, our tax advisory team can also work alongside corporate services, accounting & outsourcing, audit & assurance, risk consulting and business advisory specialists to provide coordinated support across the business lifecycle.